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Job brokers steal wages and entrap Indian tech workers in US

293 points| deepuj | 11 years ago |theguardian.com | reply

182 comments

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[+] kabdib|11 years ago|reply
At a couple of companies I was at, an Indian jobs shop had somehow gotten their mitts into our HR types and we were indundated with candidates who showed up with books like "Learn Java in 12 hours" or "Windows Device Drivers for N00bs" under their arms. Very junior types, without exception. Our interview questions were fed back, and I had to change them a fair amount. Not a problem.

"The guy at XYZZY will ask about hash tables, so..." and I'd ask them questions about something else, like concurrency, to very obvious consternation. Halfway through an interview, one candidate even asked when I was going to ask about hash tables.

"Fine. We can talk about concurrency and hash tables."

There was an undercurrent of expectation. Their handler / manager (the relationship was never really made clear) called me one day and said "We expect you to give a job to several of our people. You keep changing your questions. What is the problem?" And I would explain that I wasn't going to hire someone junior, who we would have to teach how to do engineering, for a senior wage.

Eventually they stopped coming, presumably having found better pastures.

[+] jerrytsai|11 years ago|reply
I had a similar experience 7 or 8 years ago, except that I was working for a small company and doing both the recruiting and the interviewing. I would screen a person by phone, and they would pass a basic screen. Then the person would come in and be completely incompetent, openly bringing a basic book in the language that he or she was expected to already know.

After this happened a couple of times I got wise to the strategy. The phone screen was useless. Someone would prompt the person with the right answer. The resume and references also useless, filled with unconfirmable or suspect information.

I gained a little appreciation for what HR professionals have to do and lost a bit of my naivete that people won't try to represent expertise to someone who actually has that expertise.

The language was SAS.

[+] aangjie|11 years ago|reply
Indian here and can confirm some of the agencies do this and is not exactly considered ethically/morally wrong,(am mentioning because some reddit Americans seemed to call it cheating).

In either case, I think this coaching for interview questions is not practical strategy in the long-run. It definitely works in the short-run if you play the numbers game and interview enough number of times.

[+] jackhammer|11 years ago|reply
My first thought was: I can't image how anyone could work for a place like that. That HR person should have been fired on the spot.

My tolerance for bullshit this is quite low and luckily I work for a start-up where I have to take very little of it. When stories like this come up, I keep shaking my head.

[+] xxcode|11 years ago|reply
I am not sure if your response is relevant to the article, but I felt that there is some level of superiority complex that you and many fellow humans posses (in this case, about your superior knowledge and intellect).

Perhaps the biggest difference between you and someone applying for the job through the h1b visa program was that they were born in a different set of circumstances than you were. They were likely born in India whereas you were born I the United States. As a result of being born in India, they went to a local school there which didn't teach them about hash tables and concurrency. Your school did, and you had a better education. This person from India is trying to make a better life for himself despite starting at a disadvantage in life(being born in a poor country with access to lesser educational opportunities than you). You are welcome to reject him for the job(you can do so at the resume screening state, especially if they don't have the relevant skills and experience) but I think it would be useful to remember that the other person is a human, likely disadvantaged, and express some human empathy.

[+] fadzlan|11 years ago|reply
Worked with one big Indian company here in Malaysia last time and I see intimidation as common means of dealing with employees. Unfortunately, it doesn't really work well here, since most of people have a lot of choices moving around.

I've been pushed to accept work that has a minimum wage in a different country, despite my experience and the fact I can't possibly survive with my family there. I've had my resume jacked up multiple times when they sent my resume to the client, up to the point that I had to deny I had never put certain things on my resume.

For fresh grad though, if they quit earlier than 18 months, they have to pay almost a year of their salary, which seems reasonable when there are trainings when they joined the company. Except for the fact that the first year salary of said fresh grad are being paid in full by the Malaysian government (in exchange of hiring certain number of locals per year). Some of the trainings are subsidized by the government too.

Which explained how they can force employees to take a much less pay than what they are getting in other countries, where the cost of living is higher, because they can intimidate.

Malaysia job market is much smaller than India, and such tactic didn't bode well, since there are not much replacement to come by when people are quitting, and smaller market means once you had bad reputation, new hires slowed to trickle.

Now, I am not generalizing all Indian companies, there bad apples around the world, but I am just sharing my experience on how intimidation come about. I just find it disgusting that such practices are being practice somewhere in the world.

[+] reduce|11 years ago|reply
"For fresh grad though, if they quit earlier than 18 months, they have to pay almost a year of their salary, which seems reasonable when there are trainings when they joined the company."

No, that is not ever reasonable anywhere in any situation. May be typical, but not reasonable.

[+] yen223|11 years ago|reply
> "For fresh grad though, if they quit earlier than 18 months, they have to pay almost a year of their salary, which seems reasonable when there are trainings when they joined the company."

Even by Malaysian standards this is just ridiculous. The tech scene in Malaysia is growing - people really shouldn't have to put up with this nonsense.

[+] Sven7|11 years ago|reply
How do they get them to pay a years worth of salary if they quit? I doubt this ever happens. Though I don't doubt fresh grads believing them and sticking it out.
[+] gxs|11 years ago|reply
When I graduated from colllege I started working at a top tech company on a contract to hire.

The company was paid 50/hr fore and I was paid 20 an hour. When I asked for more, the indian-born Indian CEO of the company went apeshit on me.

No real story only that almost everyone is scum. It's not just the companies. When I told the director of my org what I was getting paid she hired me full time right away at a competitive salary. And I was just lucky that she happened to like me. Other people who complained simply got let go.

I sense there is something else at play here IT work isn't that hard, yet for some reason instead of increasing awareness that there is huge demand for these jobs, we fly people in from india. We pay 150 bucks an hour for them, when an eager college kid can do and would do the same job with a bit of training for a fraction of the cost. Something else is going on here.

[+] usernamepc|11 years ago|reply
There are two reasons (both sort of hard to fix) for why contracting is screwed up.

1. Co-employment- Large companies like Google or Apple would love to hire contractors directly but are very scared of being sued by contractors that can claim they were actually employees-not contractors because of the unclear rules around who is/is not an employee. So they introduce a staffing agency in between to become the 'employer of record' and offset the risk.

Things like hiring and paying contractors directly, giving them laptops, keeping them for long terms, training them, etc. actually makes a stronger case for contractors that might want to sue them, which is why you see the weird ways these companies treat contractors (not allowing them into morale events, restricting how long they can work, etc.)

How to Fix- Labor laws would need to change, making it clear to companies how they can hire contractors without becoming liable to be held as employers. New labor marketplaces like Taskrabbit, Homejoy, Workmarket, etc. will push lawmakers into doing something soon, but this is going to be tough given how strongly labor unions are against this.

2. Non-transparency. Large companies don't like to advertise that they hire contractors. They instead give their open jobs to staffing agencies, who are not allowed to disclose the client name when they advertise the job on job boards. The staffing agencies are incentivized to provide the lowest cost engineer that meets the minimum bar and these are usually the engineers on visas that need to find a project soon or leave the country.

How to Fix- If large companies publicly share all their current contract job openings (reqs) just like they do their full-time jobs. If that happens, anyone can apply to those jobs and even nominate the staffing agencies they'd be willing to work through. They already have Vendor Management Systems (VMS) that they use to share their reqs with staffing agencies, so its just a matter of will.

In the meantime, we (http://www.oncontracting.com) are trying to solve this non-transparency by crowd-sourcing the list of preferred staffing agencies for the Fortune 1000 companies. Contractors can avoid bad labor brokers and instead discover who the preferred staffing agencies for any Fortune 1000 company are and approach them directly.

[+] rdtsc|11 years ago|reply
The college kid presumably could also keep looking for jobs and if bullied to work 60, 70 hours per week would go look for another one. Someone wrapped up in the H1B visa paperwork will be put up with a lot more abuse. So perhaps it is "pay same amount but get more guaranteed work out of it" deal?
[+] induscreep|11 years ago|reply
Isn't the "something else" just money? The employer gets an employee who is afraid to ask for a raise, since that might mean losing immigration status and returning to a (not as comfortable) life in their home country. With the green card process taking a few good years, the employer has an indentured servant. Indian born CEO or American born, money is money to them.

Immigration reform is essential. If someone on a temporary visa asks "for more" like you did, they might just get fired and replaced with another temporary visa worker. So, they don't end up asking for raises, which means that the labor rate is artificially depressed. If H1Bs were not tied to employers, then this would not happen. BUT this is not in the employer's interest, so I don't think this has a chance of changing.

[+] selmnoo|11 years ago|reply

    This bullying persists at the bottom of a complex system 
    that supplies workers to some of America’s richest and 
    most successful companies, such as Cisco Systems, Verizon 
    and Apple.
I find this extremely confusing, why companies like Facebook and Apple and others in SV, that're sitting on an unbelievable shitload of cash take filthy shortcuts like this, screw the very people that work for them so badly. I mean, seriously, I'm at a loss for words. Why? Why not just pay them a reasonable wage when you are more than capable enough to?
[+] here_you_go|11 years ago|reply
Why?

Because

a) it's profitable, and

b) they can. That's all, really.

Excessive money (== power == domination of your peers) corrupts everybody. We don't need any new studies to prove this.

That's the sick part of our economic culture - the "natural" tendency of concentration of money/power (instead of spreading it as equally as possible).

[+] rtpg|11 years ago|reply
There's some saying about rich people being cheap is what made them rich in the first place, but I'm not super convinced this carries over into business.

It is extremely frustrating that a lot of tech companies have ended up like so many other companies : caring only about that dollar metric, and not considering the human aspect. So what if it costs more? At least you can feel better about yourself for not treating people as slaves.

For a while I was naive enough to think that SV, being so awash with cash, would not feel the need to become filled with money-grubbers.

[+] eli_gottlieb|11 years ago|reply
Why on Earth would a for-profit, capitalist corporation not force down labor wages to maximize profits? Maximizing profits is their sole imperative. They do not love you, nor do they hate you, but your labor has a market value they can use for something else ;-).

If we don't like it, we can unionize.

[+] quanticle|11 years ago|reply
For the record, Facebook, at least, says that it does not use labor brokers:

    Some companies say they shun labor brokers; a Facebook official told CIR that 
    her company does not use them. Others who rely on them renounce the abuses but 
    are quick to deflect responsibility.
[+] liveoneggs|11 years ago|reply
this comment is hilarious, btw

All employers resent their employees and are seeking to exploit them as much as possible for as little money as possible. Always. Every single one of them. Every second of every day.

Make no mistake- that air hockey table is a ruse to steal your money.

[+] yalogin|11 years ago|reply
I don't the tech companies do this because they want to. They just try to get a contractor in and because the market is filled with these scum companies they inevitably get into all the companies.
[+] zaroth|11 years ago|reply
What actually happened in the story is Wipro Indian overpaid their employee and when they discovered the error the employee refused to return the money.

There are some bad actors here but I found that particular anecdote unconvincing.

[+] putlake|11 years ago|reply
As bad as some of these stories are, H1-B is way better than an L1 visa. Talk about indentured servitude. With an H1-B visa, an employee can at least change jobs and find another employer to work for. All the other employer has to do is transfer the H1 sponsorship, which is a few thousand dollars in fees but no legal hassles and not much delay. So with H1, you have decent job mobility. With the L-1 visa, which is almost never discussed in the media covering immigration, there is ZERO job mobility. You can only work for the company that got you to the United States from abroad where you were working for the same company. And for Indians who are here LEGALLY, the wait for a green card can be up to 9 years. A lot of companies make their employees wait before even applying for a green card. So they get a good 10 years of indentured servitude legally here in the United Sates.
[+] jedmeyers|11 years ago|reply
Some people choose L1 simply because their wife cannot work on H4 but can on L2 spouse visa.
[+] freshflowers|11 years ago|reply
This is neither unique for tech workers nor unique for the US. It has been happening in many professions for decades.

Tech is just specifically vulnerable, because despite all evidence to the contrary (wage suppression, the huge discrepancy between reported talent shortage and actual salaries) we drank the industry kool-aid and believe we don't need no stinkin' unions and government regulation, and that we techies are part of the lucky middle class that will remain. Most of this complacency is caused by the fact that we still have pretty decent salaries compared to most other workers, but of course that is also what makes us a nice big juicy target for dubious practices.

[+] houseofshards|11 years ago|reply
The worst part here is that H1B visas allocated to these scumbag companies end up starving genuine companies of these visas.
[+] manishsharan|11 years ago|reply
Most people coming on H1B are no less talented /skilled or hardworking that an average american techie. However, the H1B worker is not aware of his rights. The average H1b worker has no one to turn to for help as the people who are most vehemently against H1B have racist and xenophobic agendas. I speak from experience : while on a H1B VISA (and in middle of a unpleasant work situation), I sought help by seeking out the people behind anti-H1B VISA web pages. Not only did those people I asked for help had no assistance for me , they hounded me with hateful racist mails, phone calls and death threats.

The focus of this article and sadly HNers is to punish and prosecute the companies. Not one opinion has been offered to make the lives of H1B better. So let me offer one.

The US consulate can brief the H1B GRANTEE on his /her rights.Maybe include an DVD or training video on youtube along with a hotline or number of labour lawyers. Make the company sponsoring H1B agree to abide by labour laws of California or whichever state the the company is located in.

[+] danmaz74|11 years ago|reply
> Contracting with labor brokers also benefits US employers. They can staff up swiftly for temporary jobs and slim down just as fast, with workers paid below-market rates.

I really don't understand why H1B visas aren't tied to the worker's pay. Considering that they're intended for difficult to find specialists, it should be easy enough to weed out fake applications by tying the visa to an at least average salary for the sector.

[+] plicense|11 years ago|reply
I noted two things:

1. "Shackling workers to their jobs is such an entrenched business practice that it has even spread to US nationals" - such US arrogance.

2. Almost all names of people affected seem to be from the state of Tamil Nadu in India.

[+] starving_coder|11 years ago|reply
The Center for Investigative Reporting did approach me since i am victim of this scam too. I chose to settle out of court sheer out of fear and lack of ideas. As per settlement terms, i am not supposed to talk about this entire episode to anyone ever. But i am still talking here on HN. Back in 2008 I paid $330/hour (10 hours in advance as a retainer) to an attorney to file a response to the legal notice i received. I also paid other damages to my employer totaling $7500. I was literally forced to sign the "binding agreement" which was part of my joining formality after i landed in SF. Had i seen this doc earlier while still in India, chances are i wouldn't have taken that flight. I spent almost a month without pay, medical insurance (in spite of working for the client) but ultimately blinked and signed that document. Its evil. And this ritual is here to stay until the feds really are interested in solving this problem.
[+] gleenn|11 years ago|reply
I think it is terrible that companies are taking advantage of foreigners, but I also keep seeing this $20,000 number thrown around a lot. That's how much it costs for a company to apply for an H1B. The companies should not be using that to prevent people from quitting, but it is a very real, large expense to getting workers from out of the US.

The flip side of the argument isn't great either. If Softcorp or whatever pays a small fortune to get someone an H1B, that person shouldn't turn around and leave immediately either. It's just really sad that this means Softcorp, etc know they can use that as a leash and treat the worker like crap.

Someone tell me a solution to this problem given the H1B's cost so much. How do you prevent abuse? It seems like making the worker pay for the visa would fix it, but I have a feeling that is quite difficult as well. Also, it would be kind of crazy to have to pay a huge sum to take a job.

[+] klipt|11 years ago|reply
> It's just really sad that this means Softcorp, etc know they can use that as a leash and treat the worker like crap.

Legally they can't hold employees liable for H1-B legal fees. Companies have been sued for millions for doing this, even when they framed the fees as 'training': http://blog.laborlawcenter.com/news/virginia-company-pays-17...

"Investigators also found that the Virginia company charged new H-1 B workers fees for training ranging from $1.000 to $2,500. Such fees are in violation of the law."

> If Softcorp or whatever pays a small fortune to get someone an H1B, that person shouldn't turn around and leave immediately either.

Then Softcorp should make their compensation competitive.

[+] enraged_camel|11 years ago|reply
>>but I also keep seeing this $20,000 number thrown around a lot. That's how much it costs for a company to apply for an H1B.

To clarify, the actual application cost varies between $2500 and $5000[1]. The problem is that on most years, the visas are given only to a percentage of the applicants. For example, if someone is switching from OPT to H1B and they don't win the RNG game, the cost to the company can be enormous.

[1]http://redbus2us.com/h1b-visa-2014-filing-fees-uscis-fee-att...

[+] winter_blue|11 years ago|reply
There's no lease. An H1B worker can switch companies freely with little hassle. It's the L-1 visa that has a lease. Congress passed a law in 2000 called 'AC21' which brought job portability for H1B workers. I don't know why I keep hearing people on HN and elsewhere talk as though AC21 never happened over and over again. Please have the sense to do some basic research before forming your opinions. Lastly the cost to the company is actually around $4-5k.
[+] saurabhnanda|11 years ago|reply
Is penalising early exit through contractual terms illegal? If not, then isn't this just a case of who has more leverage when negotiating the employment contract? That, and the fact that Indians are so desperate to go to the US that they're willing to sign any contract.

PS: I'm an Indian working in India.

[+] induscreep|11 years ago|reply
Penalizing early exit with loss of immigration status could be illegal...penalizing with money is probably not.
[+] HaseebR7|11 years ago|reply
WOW, this is scary. I'm from India and thinking of getting my MS in CS next year. I hope i don't end up like this.
[+] abat|11 years ago|reply
The companies taking advantage rely on their marks/employees being naive, so you'll be fine once you know to be careful:

1) Get direct employment with a reputable US company instead of via a contracting company.

2) Don't sign any contracts that have any penalty for quitting. You may want to hire a lawyer to review any contracts.

3) If you are in a bad contract and your employer sues you, make sure you hire a decent lawyer. The biggest victims were those that ignored the suits or tried to represent themselves and lost their cases by default.

[+] praneshp|11 years ago|reply
You'll be fine. Most of the time, especially if you get a MS in CS, you'll be hired directly by the employer (Apple, MS, Yahoo et al). You'll probably get a higher salary than a contractor at your level (because the staffing company doesn't eat into it). You have all the problems that comes with a H1B (like a short grace period in case you're laid off, etc), but that will be all.

SOME of these people willingly get into these situations because living in the US for a while improves their social standing (for marriage, dowry, etc) a lot. Others believe in the American dream and come here at any cost and fall into that trap. There is a large group that just cares about getting to the US, and then thinks the salary plus Amway will make them rich.

I did a MS in CS, and got a few jobs (mostly big corps, one of them Cisco, all of which offered to sponsor H1B). I now hate the bay area and its really low quality of life and am tied here only because I love my job. Just keep aiming for excellence, instead of hook or crook, that will mostly help you. The US visa situation is screwed up though, you'll find a lot of articles about it here on HN.

[+] yxhuvud|11 years ago|reply
You can easily avoid that fate by avoiding USA. Most other countries don't pull that crap. I don't think Canada behave like this, and most or all of northern Europe is also pretty simple (or extremely simple, in some cases) to get into.
[+] bbarn|11 years ago|reply
I think this is going to continue in some shape, even if it doesn't necessarily look like this, because these companies are going to India to pay less money, bottom line. Add in a large pool of people wanting to make the move, and someone will always be willing to do it for the types of contracts we're talking about here.

As has been pointed out many times here on HN, there is no shortage of qualified dev/it talent in the US. There is a surplus of companies with bad jobs that don't want to pay market rate, and look at these brokers as risk mitigation strategies to fill the head count someone said they needed.

When cutting costs is your motivation, people have a strong tendency to get hurt.

[+] designml|11 years ago|reply
This actually happened to one of the people I know. That person had to go through a lot just to get out of the stranglehold of those people. Literally screwed. They were paying half of market and also not even paying it on time. Unfortunately its difficult to pursue a legal route against these people because of the cost to pay lawyers and also the fact that they do it in such a way that its borderline legal/illegal. The only thing you can do is to save other people who may fall into the same trap.
[+] ssiddharth|11 years ago|reply
This is disgusting on so many levels. Hopefully us Indians can now stop being so starry eyed over working abroad and see it for what it is.
[+] lotsofmangos|11 years ago|reply
If someone is paying you an airfare you cannot currently afford, rather than already paying you enough before you leave a country that any paid flights are merely a courtesy, then be very suspicious.
[+] sumedh|11 years ago|reply
You underestimate the desire to get out of India.
[+] coldcode|11 years ago|reply
If we have to have these visa programs, the law should be changed to only allow the actual hiring company to contract with the worker, and under no circumstances allow any intermediary to be a go-between. Then at least there can be some kind of tracking instead of everything being hidden behind closed doors.

Of course with our stupid politicians nothing will change except for the worse.