Richmond company must pay back wages to foreign workers
Published: October 21, 2009
A Richmond-based technology company has been ordered to pay $147,433 in back wages to 56 employees working in the United States under a foreign-worker visa program, the U.S. Labor Department said yesterday.
The agency said an investigation by its wage and hour division found that Materials Software System Inc., a software-development and IT consulting company, failed to pay proper wages and equal benefits to workers hired as computer programmers under the federal H-1B program.
Lakshmi Challa, a Richmond immigration lawyer who represented Materials Software System, said yesterday that the problem arose because the company received incorrect advice from its previous legal counsel on compliance with the H-1B program. No penalties or sanctions were assessed against the company.
The H-1B program allows employers to temporarily hire foreign workers in professional occupations, such as computer programmers, engineers, physicians and teachers. To prevent employers from hiring foreign workers at lower wages and benefits than for similarly qualified U.S. citizens, federal law requires that the foreign workers be paid the same wage rates and benefits as the employer's U.S. workers who perform the same type of work, or the prevailing wage rate in their profession, whichever is higher.
Challa said the company's employees are paid above prevailing wages, but the company had agreed to an alternative wage and benefit plan with higher bill rates in lieu of certain benefits. That was done "not to circumvent the H-1B wage regulations but to foster employee goodwill," he said in a statement.
"Once [Materials Software System] was correctly educated about H-1B compliance, [the company] immediately corrected their actions to comply with the H-1B regulations," Challa said.
Bruce Clark, director of the wage and hour division's Richmond office, said the investigation covered a two-year period from May 2005 to May 2007. The employees involved were mainly program analysts and software designers from India, whom the company had placed at client businesses in several states.
Contact John Reid Blackwell at (804) 775-8123 or
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Reader Reactions
That’s what you get for hiring foreign workers——and hire local “LEGALS”! I don’t care what Obama and the Pope want.
So, the workers had wages withheld due to “bad advice”.
When caught, there was no penalty to the employer. The remedy was an order by Wage & Hour to pay back the missing money.
This is like a bank that goes “broke” on bad investments. When they get caught, citing faulty legal advice, the bank regulators do not prosecute. Instead the bank is told to return the money to the depositors (they get more from the federal reserve).
Both parties have no incentive to avoid the same outcome again. The same intent remains, the same harm remains.
Such violations are seen as merely a cost of doing business, and then only when discovered. When not discovered (is that possible ?))such practices are extremely profitable.
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