News/US: Indentured servants for high-tech trade Labor

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Subject: News/US: Indentured servants for high-tech trade Labor
From: Center for Immigration Studies ( )
Date: Fri Feb 25 2000 - 09:52:53 EST

Are these going to be the next wave of trafficking victims?


The following is an article from an excellent
series by the Baltimore Sun -- this story is on H-1B visas, and Sunday's
package was on the investor visa program. This story and links to other
articles in this series are located at the following URL:

If you have problems with this link, go instead to
and click on "The Visa Vendors" under the "Special Coverage" section at the
bottom left.

Indentured servants for high-tech trade Labor
For a rich fee, companies called "body shops" supply waves of unwitting
immigrants to the nation's computer industry.
By Gary Cohn and Walter F. Roche Jr.
Baltimore Sun, February 21, 2000

Second of two parts

When Kumar Rajesh was rushed to Shady Grove Adventist Hospital in
Rockville, doubled over by kidney stones, he might have expected a fruit
basket or a get-well wish from his boss.

Instead, he got a lecture about how the time lost reflected badly on his
work record.

Rajesh, then 24, was a systems analyst employed by Tata Consultancy
Services, an Indian firm that contracts with U.S. companies to provide
computer experts.

He and more than a half-million other immigrants, many from India, are at
the crest of a wave of high-tech foreign workers who have surged into the
United States over the past decade at the urging of the computer industry
and its lobbyists under a program created by Congress in 1990.

It's an effort that has given birth to a multimillion-dollar industry,
shuttling high-tech workers for a lucrative fee from continent to
continent. Critics call the companies that find the workers "body shops."
They say the program, known as H-1B, stems from a patchwork of immigration
laws and policies triggered by special interests and fueled by a vast pool
of unwitting immigrants in pursuit of the American dream.

"Since I was treated like a bonded slave, I didn't have any other
alternative except leaving the company," Narayanasamy Sekar wrote in a
personal plea to a Montgomery County Circuit Court judge to explain why he
left the company that brought him here.

An investigation by The Sun, in which hundreds of court records and
government documents were reviewed and dozens of recruits interviewed,
shows that for many foreigners, the promises they hear on the streets of
Bombay and New Delhi soon give way to harsh reality. Many who came in
pursuit of a dream now find themselves indentured servants.

The investigation found:

In violation of federal law, visa holders often collect a small fraction of
the salaries they've been promised while doing make-work projects and
refining computer skills.

If workers quit, they are frequently sued by employers claiming damages of
$30,000 or more.

Workers who challenge employers are routinely threatened with being sent
back to their homeland.

Body shop operators regularly bill U.S. companies at rates three to four
times the salary being paid to their foreign workers.

U.S. workers have been displaced by less costly foreign labor contracted
out to H-1B visa holders.

Court records show the visa holders are recruited by contractors, then
brought to the United States for assignment. If no job is waiting, the
worker may be placed by another body shop, which gets a percentage of the fee.

Revenues have soared for visa vending companies created to bring in
temporary foreign workers. Mastech Corp. and Syntel Inc. reported combined
revenue of well over a half-billion dollars in 1998, according to filings
with the Securities and Exchange Commission.

Immigration lawyers collect fees of $2,000 to $2,500 for each H-1B
application. With a limit of 115,000 H-1B visas per year, that represents
some $230 million a year in potential legal fees. "It's the bread and
butter for a lot of people," said Kenneth Rinzler, an immigration lawyer in
Washington, who said he advises his clients against using H-1B visas.

The program that brought these workers to the United States was created by
Congress in 1990 in response to pleas that there weren't enough American
workers to fill certain high-skill jobs. The category was included in the
1990 law that reshaped the country's immigration policies.

Despite repeated warnings of a critical shortage of high-tech workers, some
immigration experts say that there is no crisis and never was one.

"The evidence is just not there," said Mark Krikorian, executive director
of the Center for Immigration Studies in Washington. He said the program
lets employers short-circuit the usual rules of a free-market economy, in
which wages are driven by demand.

Krikorian said the program enables companies to obtain high-tech workers at
a discount. Companies are willing to pay fees and lawyers, he said, because
in the long term, foreign workers save them money on salaries and benefits.

In effect, Krikorian said, the U.S. government provides a subsidy in the
form of visas.

Responding to industry warnings of an impending high-tech crisis, Congress
voted in 1998 to temporarily double the number of skilled workers allowed
into the country on visas. Moves are under way to allow in even more
workers and to make the increase permanent.

"Once again, the cap on H-1B visas is preventing American companies from
hiring the best and the brightest workers from throughout the world,"
William T. Archey of the American Electronics Association told a
congressional committee late last year.

Behind the H-1B movement are AEA and another industry group, the
Information Technology Association of America, headed by Harris Miller, who
once served on the staff of the House committee again being asked to raise
the ceiling on the program.

Under the 1990 law that created the program, a limit of 65,000 a year was
set on the number of H-1B visas that could be issued. But lobbyists from
Silicon Valley soon warned that 65,000 a year was not enough, due in part
to the need to debug computers of problems associated with the year 2000.

Under U.S. immigration law, workers with H-1B visas can stay in the United
States for up to six years. After that, they can apply for permanent
resident status but cannot remain in the H-1B program unless they leave the
United States for at least a year. Under the law, foreign workers are to be
paid salaries comparable to those of American workers in the same jobs.

INS officials say many of those temporary workers become permanent U.S.
citizens under other immigration programs.

As a result of the lobbying effort, the immigration law was amended in 1998
to raise the annual cap on H-1B visas to 115,000. It will remain at 115,000
in 2000, then drop to 107,500 in 2001 and to 65,000 in 2002.

Powerful allies

The industry groups and the companies employing H-1B workers have a
powerful ally in the American Immigration Lawyers Association. AILA members
have thrown their financial muscle and support behind the congressmen who
play a key role in determining the fate of the program.

Sen. Spencer Abraham, chairman of the Senate Immigration Committee, has
been a speaker at AILA's national conferences and held a series of
fund-raisers in tandem with AILA events.

When AILA met last summer in Seattle, the Michigan Republican held a
$500-a-plate breakfast at the hotel where most of the conventioneers were
staying. He held a similar fund-raiser during an earlier AILA conference.

Campaign finance reports show AILA members donated $11,450 to Abraham in
1998, the year his committee voted to double the H-1B program. Abraham's
campaign committee also reaped donations from executives of Mastech and
Syntel, two of the biggest H-1B companies. His committee reported
contributions of more than $17,000 from executives of Microsoft Corp., a
major user and supporter of the H-1B program.

Serving on Abraham's staff is Stuart B. Anderson, a former official at the
Cato Institute, a conservative Washington think tank, who while there wrote
a controversial study frequently cited by supporters of the H-1B program as
justification of the need for foreign high-tech workers.

Abraham's role in boosting the H-1B program earned him the Cyber Champion
Award last year from the Business Software Alliance, a group representing
some of the nation's largest software firms. The annual award is given to a
member of Congress "for tireless efforts" on issues critical to the
high-tech industry.

Records at the Securities and Exchange Commission show how big the program
has become.

With revenue of nearly $400 million per year, Mastech Systems Corp., based
in Oakdale, Pa., has reported that about 35 percent of its work force comes
>from the H-1B program. INS records show Mastech near the top of the annual
list of companies taking part in the program.

Mastech's customers include some of the country's largest corporations,
including GE Capital, which announced in August that it was buying a $30
million stake in Mastech and that it would buy $122 million in services
>from the firm over the next three years. Mastech once had a contract to do
work on the White House computer system. GE Capital also has used H-1Bs
>from Tata Consultancy. Tata now has 29 such workers assigned to GE units.

'It was my dream'

"USA or your money back," reads one ad in a Bombay paper. "State of the art
facility," reads another. Others guarantee top salaries, medical insurance
and challenging assignments.

Recruiters for the body shops "promise you everything under the sun," said
a 27-year-old computer programmer who answered an ad in a Bombay newspaper
three years ago.

When he spotted the advertisement promising a challenging assignment and a
top salary, he saw the chance he had been waiting for -- a chance for the
American dream.

"I was learning things in India but there was no way I could use them.
There's too much talent there. For me there was no possibility of growth. I
was earning $250 a month," he said. "In India, that's real good money."

After a 10-minute interview at a Bombay hotel, he was told that he had the
job with an American high-technology consulting firm.

By going to work for the New Jersey firm, he could get a job in the United
States and, just as important, the visa to make it legal. Eventually, he
hoped, he could become an American citizen.

"I always wanted to come here," he said. "I don't know why, but it was my

The programmer, who asked that neither his name nor his company be given
for fear of being sued, soon discovered that the reality was far different
>from the promises.

On arrival in November 1997, he found himself in cramped quarters in a
single-family home with 14 other programmers. He found that his initial
salary would be $500 a month -- not the $1,000 a week he was promised --
and that $200 would be paid as rent.

He learned that his resume, the one officially submitted to U.S. officials
as part of his visa application, listed training in several areas that he
never had received.

"I saw this resume only after coming to the United States. When I saw it I
was shocked for a minute, as it contained stuff that I never worked on. I
was told not to worry about it, he said, "as it was done 'to get me here.' "

'On the bench'

Later, he complained to his boss about being "put on the bench," when a
project in the Midwest came to a sudden end. A worker on the bench gets a
reduced salary or none at all. Instead of performing a challenging job, the
worker spends the day doing busy work, honing programming skills or trying
to find a new assignment.

When the programmer complained, his boss was not happy.

"He said, 'I'll send you back to India. If you talk about this, I'll send
you back,' " the worker said in a recent interview.

Though federal officials say benching is illegal, H-1B visa holders say the
practice is common.

After months on the bench, the programmer began the complicated process of
finding another job and the even more tedious task of getting a new company
to sponsor him for a visa.

By summer he succeeded, moving on to a similar job in the Midwest. But the
fight over his benching and unpaid salary, which he estimates at $10,000,
goes on. He filed a complaint with the Department of Labor, but has been
warned that the investigation could be lengthy.

"The alien software professional is viewed by the body shop owner as the
goose that lays golden eggs," the programmer said, "and you don't have to
feed the goose."

Another H-1B visa holder arrived from India last year after being promised
a job in California. Instead, he spent months reporting to the office
trying to line up work.

"We go to the company office every day and try to line up business. We get
$500 a month plus the apartment, but no other money," he said. "They told
me,'You don't want health insurance. It's just a pain in the neck.' "

He also was required to sign a contract. "They don't give it to you till
the last minute. They tell you your flight is leaving in a half-hour. You
don't even have a chance to read it.

"They put an advertisement in the paper. They'll promise to pay you, no
matter what. It's all lies. You really don't know who you are going to work

Asked why he didn't hire a lawyer, he replied: "How can you hire a lawyer
when you can't even pay for basic living expenses."

More than three months after arriving in the United States, he was sent on
a paying assignment in New Jersey.

In fact, many H-1Bs live in fear of being sued. It is a fear that is

Court records show that Mastech has sued dozens of former workers who tried
to leave for other jobs. The lawsuits accuse workers of failing to comply
with an agreement to stay with the firm for pe-

riods of one to two years. The lawsuits seek damages ranging from $10,000
to three months' salary.

John Brendel, Mastech's general counsel, declined to discuss the lawsuits.

'No big deal'

Among those Mastech sued was Roy Mani, who came to the United States in
late 1997 after being recruited in India.

"They made me an offer but then kept me waiting for six months," he said.
When he got the call that a job was waiting, he was told he had to leave
immediately. He was handed a document to sign, but had no time to read it.

The document was an employment contract under which he agreed to pay
Mastech $10,000 in damages if he failed to stay with the company for at
least 18 months and to give the firm at least six weeks' notice of quitting.

He was surprised by the agreement, he said, because in India, there are no
restrictions on leaving a job. "They never said that if you sign this and
leave, then we will sue you. They just told us we had to sign it. They said
it was 'no big deal.' "

Mani said recruits have no idea what they are agreeing to, and that a
disclosure requirement is needed.

Mani said he hired a lawyer, but the attorney told him it would be best to
settle the lawsuit. He expects to have to pay $10,000 and the lawyer fees.

"It has happened to a lot of people. They [Mastech] don't care what your
experience is."

He said H-1Bs feel helpless. "We cannot do anything."

Mani said his assignment for Mastech was in Omaha, Neb., where he worked
for a communications firm at an annual salary of $48,000. He said he earned
a little over $20 an hour, while Mastech was charging the firm $70 to $80
an hour.

He said he left because they kept playing games with his pay.

"I'd send them a time slip and they'd pretend they didn't get it. I'd send
it again and they still wouldn't pay," he said. "I faxed it again and I
still didn't get paid. I got angry and they started threatening me."

It was only after moving to Milwaukee and settling into his new job that he
found out that he had been sued and that Mastech had obtained a default
judgment for $10,000 against him in Pittsburgh, though he had never lived
or worked there.

"I never got any notice" of the lawsuit or a hearing, he said. "I don't
know how they can do this."

Mastech officials declined to discuss the Mani case or those of any other
former employees.

Records at the Allegheny Court of Common Pleas in Pittsburgh show that Mani
is one of dozens of former Mastech employees being sued for $10,000 in
damages and travel and training expenses the firm says it incurred. In one
such case, Mastech sought nearly $50,000, including $28,200 in training fees.

Gap in billing and pay

In a case heard in June, a Mastech official testified that the company was
billing a Nebraska firm $110 an hour for the services of an employee being
paid $26 an hour. Mastech sued the employee, Som Partha Pratim, when he
left for another firm.

Mastech sought about $50,000 to recover what it said it had spent on
Pratim, and income lost because of his departure.

Pratim's attorney, Kimberly J. Kisner, filed a counterclaim against
Mastech, seeking back wages. The case was settled out of court. Terms were
not disclosed.

In another Mastech lawsuit, a former employee said company officials
"tailored and tampered" with his resume to get him an assignment at an
accounting firm. Srinath Nagabhirava said he was placed in "a totally new
environment in which I haven't had any skills or experience."

Nagabhirava said he and other H-1B visa holders were threatened and
discriminated against when they initiated efforts to become permanent U.S.

Mastech denied both charges.

Another Mastech employee, Guromurthy Thanukunoori, said he was forced to
work 50 to 55 hours a week, sometimes 13 or 14 hours a day while on an
assignment with Wal-Mart.

"I had a supervisor who was always harassing and threatening us. He said,
'If you don't work the 12 hours, I'll throw you out of this country,' "
Thanukunoori said. "I had just gotten married, and I didn't want to work
those hours."

He said Mastech, after promising to underwrite the cost of health
insurance, later began charging him $95 a month for it.

Thanukunoori said he waited until the Wal-Mart project ended, then
submitted his resignation in May 1997, so the company could not claim it
had lost revenue because of his departure.

Weeks later, Mastech filed suit, alleging that Thanukunoori breached the
contract he had signed in India in 1996. The company sought $10,000 in
damages, repayment for training and travel expenses, and $15,000 for lost

Unlike most, he hired a lawyer. The company did not deny that he was
required to work extra hours, but said it never promised he would work a
40-hour week.

The case was eventually settled for $1,000, Thanukunoori said.

Asked in a recent interview whether employees were routinely forced to work
50 to 55 hours per week, Brendel, the Mastech attorney, said: "We're
project based. The clients have deadlines. And when they come, everyone
at the project site is working those hours. That wouldn't be typical day in
and day out."

Brendel acknowledged that the firm requires employees to sign contracts.
Asked if American workers were required to sign the same contracts, he said
theirs were "similar but not identical."

Brendel said that in the lawsuits Mastech has filed, no judge has found the
company agreements "unreasonable."

Tata Consultancy Services, or TCS, which is based in India and has U.S.
operations in Rockville, ships workers worldwide. Its parent firm is
India's largest conglomerate. In 1998, Tata had 2,000 workers with H-1B
visas on assignment in the United States. The firm had 490 H-1Bs approved
in 1997. Records at Tata's Rockville office show that their largest
customer in the region is the National Association of Securities Dealers,
which has 32 H-1B visa holders assigned to its headquarters.

Like Mastech, Tata has sued dozens of workers who left the firm for other
American jobs. Many lawsuits were filed in Montgomery County Circuit Court.
Tata, according to its records and those on file in the court, assigns
dozens of its H-1B workers to area businesses, including the Nasdaq stock
exchange, USF&G Corp. and the Maryland offices of IBM.

Maternity discouraged

For women who have signed with Tata, having a family can be a problem.

Court records show that part of Tata's agreement with former employee Veena
Achar states: "Tata Consultancy Services will not incur any expenses
arising due to pregnancy. Maternity is not encouraged due to the high cost
of insurance and other related expenses."

Tata sued Achar, who had been assigned to work for IBM in Bethesda and
Gaithersburg. According to court records, the case was settled with Achar
agreeing to pay the firm $7,500 in damages for breaking her employment
agreement. Her attorneys had argued that she was "a person of limited
financial means whose limited income is needed to support her family in

Under the settlement, Achar, who now lives on the West Coast, made a $3,000
down payment and paid the rest in $200 monthly installments.

Thomas Patton, a Washington attorney whose firm represents Tata, declined
to discuss specific cases but said the provision discouraging pregnancy is
no longer included in employment agreements.

Patton also defended standard Tata contract provisions that entitle the
firm to collect up to $30,000 in damages if an employee leaves an
assignment before its completion.

Because of the "huge investment" Tata makes in training, Patton said,
workers are told when they are hired about the possibility of foreign
assignment and the provisions of the employment agreement.

"They tell them right up front they may be posted overseas," Patton said.
"They tell them before they are even hired. They also tell them that they
are expected to return to India at the end of their deputation." He said
recruits are told that Tata may sue if they leave assignments prematurely.

"No one is forced. No one makes them sign the agreement," said Patton. "If
they want to be hired by TCS, they do have to sign the agreement."

Like Mastech's attorney, Patton denied that Tata was a body shop. "We have
a close relationship with our employees," he said.

Asked why Tata employment contracts require workers to agree to return to
India on completion of their U.S. assignment, Patton said it was not
intended as a threat, "but because we want to be good corporate citizens.
TCS does not want to aid and abet any notion that it is engaged in
back-door immigration."

Booming revenues

Syntel, an H-1B firm based in Troy, Mich., has seen its revenues grow along
with the program. Annual revenue has climbed from $70 million in 1994 to
$92 million in 1995 to $124 million in 1997 and to $160 million in 1998.
Two-thirds of its workers hold H-1B visas.

Clients include Ford, DaimlerChrysler, Kmart and the state of New Mexico.

When Syntel took over data processing for American International Group, the
insurance giant fired the 250 U.S. workers who had been doing that job.

Allegations by foreign workers of widespread abuses in the H-1B program
come as no surprise to government officials who regulate it.

"Visa fraud is not inconsequential in this program," said John Fraser,
deputy administrator of the wage and hour division of the U.S. Department
of Labor. "Our ability to look into what is really going on is very limited
by the law. There's a lot of ambiguity about what the program is supposed
to do." Fraser said the program is often used to convert people from
student visas to temporary employment status. "Unfortunately, it is also
used by job shoppers in the people business to bring in large numbers of
entry-level folks."

Although the 1998 expansion of the program included provisions designed to
protect American workers from being displaced by cheaper foreign labor, the
federal government has yet to issue regulations to enable their
enforcement. Even when it does, the provisions will apply to only a tiny
percentage of the companies using H-1Bs.

Fraser said the restrictions apply only if H-1B holders comprise 15 percent
of a firm's work force.

'Within our borders'

The restrictions require so-called H-1B dependent firms to prove that they
first made efforts to fill jobs with American workers before turning to an

"Our view has been that these standards were inadequate," Fraser said.

Former Labor Secretary Robert B. Reich, who fought expansion of the H-1B
program, said that even if there were a proven need for high-tech workers,
the answer should be "within our own borders."

"You can teach people these skills," Reich said, adding that the H-1B
program should be limited to the extremely high-skilled, "like nuclear

"Even if there is a shortage," he said, "there are people within our
borders who can be trained. All we are doing is undercutting our own work

Reich said audits while he headed the agency showed that misgivings about
the program were well-founded.

"Our fear was that H-1B was being misused. The audits later showed it was.
A lot of people were being brought in with skills that Americans either
already had or could easily acquire. It may be good for the companies,
but not for the workers," said Reich, who now teaches at Brandeis
University in Massachusetts.

INS officials who share responsibilities for policing the H-1B program
acknowledge difficulties in enforcement of the law.

"There has been some fraud," said William Yates, a deputy executive
associate commissioner at INS.

"The real appeal" for employers, said Krikorian of the Center for
Immigration Studies, "is that the employee can't job hunt. It really is an
indentured servant program. In practice, the H-1Bs are indentured to that

"They are making decent money, but they can't go across the street. They
are stuck. If the employers really wanted more workers, they would just put
in for more green cards. They want folks who can't leave."

Referring to body shops, he added: "It's really just a gimmick. This whole
concept of renting out H-1Bs is outrageous. It's the equivalent of renting
out your slave to the next plantation."

Former Rep. Bruce A. Morrison, who chaired the House immigration
subcommittee in 1990 when H-1B was created is equally critical.

"Our system is based on the power of people to look out for themselves," he
said. "That's all destroyed by indenturing our workers."

Claim and counterclaim

Rajesh, the H-1B worker with kidney stones, couldn't just take time off to
see a doctor.

He worked as a systems analyst for GE Information Systems in Rockville, a
unit of General Electric Co., under assignment from Tata.

Though doctors urged him to seek medical care the next day, he reported to
work instead and again on Saturday to make up the time lost at the hospital.

He quit his job with Tata in August 1997. But his involvement with the firm
didn't end there. On May 28, 1998, Tata filed suit, accusing him of
violating an employment agreement, and seeking $30,000 in damages.

Rajesh filed a counterclaim, accusing Tata of violating the Family Medical
Leave Act in denying him time off for his illness and, later, his wife's.
He also alleged that Tata took his federal income tax refund.

According to the counterclaim, Tata filed Rajesh's federal tax return, then
cashed his refund check. "When employees complain about Tata retaining the
income tax refund checks, employees are immediately ordered returned to
India," the counterclaim states.

Tata did not deny that Rajesh asked for the time off, but said he did not
qualify for coverage under federal law because he had not worked for the
company for a full year in the United States. Tata's lawyers said Rajesh
should not receive credit for the year and a half he worked for the firm in

The company contended that the deductions from his paycheck and the
handling of the tax refund were legal.

The lawsuit was eventually settled, with Rajesh agreeing to pay the firm an
unspecified amount. Rajesh is barred under the settlement agreement from
discussing the case.

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