California has a migrant worker problem. Reading that statement you’d likely picture a farmworker from Mexico or Central America. But you’d be wrong. It’s migrant tech workers, holders of H-1B visas, mostly from India, who are being abused.
The Center for Investigative Reporting (CIR) together with NBC Bay Area have been looking at tech immigrants to Silicon Valley—and elsewhere in the U.S.—for a year. And what they have found isn’t pretty.
The system, on the surface, doesn’t seem like a bad thing. Consulting firms (a.k.a. labor brokers, a.k.a. body shops) recruit skilled tech workers, mostly engineers and computer programmers. The firms handle the paperwork required to get these workers H-1B visas, a category reserved for those with highly specialized knowledge. Then tech companies contract with the consulting firms to use the workers. This allows the tech companies to quickly build up their work forces as needed, without having to deal with all the immigration paperwork. As stated in the NBC Bay Area report on the investigation, it’s a “flexible labor regime…placing skilled people with needy firms.” And the process, if it works properly, could smooth a path for tech workers looking to move to the U.S.—if they sign on with a consulting firm, the firm finds them a job; they don’t have to interview with multiple companies.
But beneath the surface, the investigation found, many of these arrangements have problems. By looking at court records covering 600 H-1B visa abuse cases, the investigators found that contracts are often draconian, allowing the body shops to withhold wages and force workers to pay large fees if they quit. Some hold visas hostage to enforce these contracts, or threaten lawsuits.
Others bring in workers even though no jobs await. You can’t legally get an H1-B visa unless there’s a job to fill, so body shops purport to offer engineers open positions, and the engineers hired by a body shop should collect salaries from day one. But the body shops typically don’t pay workers until they place them at companies. And the body shops stockpile, or “bench,” workers so they have them on hand when jobs come up, sometimes sticking them in guesthouses and forbidding them to leave the property, the investigation determined.
That’s how the system hurts the workers. But it’s also hurting companies who want to bring in expert engineers and computer programmers the old-fashioned way—that is, by applying directly for an H-1B visa. Why? Because there’s a national cap of just 65,000 of these visas per year, and when the body shops scoop up visas to stockpile workers, the visas are not available for companies who really have tech jobs they can’t fill from within the U.S.
The investigators interviewed workers, keeping their identities confidential. One worker from India, for example, reported that he was told to stay in a guesthouse, a small apartment or home housing eight to ten workers, until he got assigned to a job. He wasn’t allowed to leave for several months, not even to go for a walk. Once he got a job, at a salary of $60 an hour, the body shop took an estimated 30 percent, or $35,000 a year, for “expenses.” Sometimes, the abuse is caught, and a labor broker is shut down—then pops right up again with a different name, often at the same address.
Companies who use workers from suspect body shops named in the investigation included Cisco, Google, eBay, Verizon, and Apple. But these companies are not alone. Even the U.S. Government, the investigation showed, uses workers from body shops. But not every company does. Facebook also was named in the investigation—as a company that doesn’t use labor brokers.
Tekla S. Perry is a senior editor based in Palo Alto, Calif., where she’s been covering the people, companies, and technology that make Silicon Valley a special place for more than 30 years. Perry started reporting on California tech companies from IEEE Spectrum’s New York office in the early 1980s, before relocating to the Bay Area full time in 1986. She has the privilege of having a front-row seat as tech history is being made, including the early days of video games, the growth of the personal computer industry, the rise and fall of Xerox PARC, and the incredible startup boom in Silicon Valley today. She has conducted in-depth interviews with a host of tech pioneers, including Gordon Moore, Andy Grove, Robert Noyce, David Packard, Irwin Jacobs, Andrew Viterbi, Jim Clark, Ray Dolby, Alan Kay, Adam Osborne, Gene Amdhal, Gary Kildall, Gordon Bell, Steve Wozniak, Marissa Mayer, Elon Musk, and Nolan Bushnell.
Besides covering Silicon Valley and startups in print and in her blog, View From the Valley, Perry follows trends in consumer electronics technology around the world. An IEEE member, she holds a bachelor’s degree in journalism from Michigan State University.