U.S. companies may be contributing unwittingly to the exploitation of workers imported from India and elsewhere by tech-services outfits October 1, 2009, 5:00PM EST
Vimal Patel was studying for a master's in business administration in London when he saw an advertisement for work in the U.S. The ad offered a job in the tech industry, as well as sponsorship for the kind of work visa that allows foreign nationals to take professional-level jobs in the country. So Patel applied and paid his prospective employer, Cygate Software & Consulting, in Edison, N.J., thousands of dollars in up-front fees. But when Patel arrived, Cygate had no tech job for him. He ended up working at a gas station, and Cygate nevertheless took a chunk of his wages for years, according to documents in a criminal case against Cygate.
After a federal investigation into Cygate, Patel and five other natives of India recruited by the company pled guilty to visa violations in June. They were sentenced to 12 to 18 months of probation, assessed fines of $2,000 each, and now face deportation. But at Patel's sentencing in the federal courthouse in Newark, N.J., his lawyer said the slim 36-year-old, with a mop of brown hair spilling over his forehead, was more victim than villain. Like many ambitious workers from abroad, he came to the country seeking his fortune, and he suffered for the effort. "It's a sad day," said Anthony Thomas, the public defender assigned to represent Patel. "He always dreamed of coming to the U.S."
Cygate, which changed its name to Sterling System after the lawsuit, is one of thousands of low-profile companies that have come to play a central role in the U.S. tech industry in recent years. These companies, many with just 10 to 50 employees, recruit workers from abroad and, when possible, place them at U.S. corporations to provide tech support, software programming, and other services. While many outfits operate legally and provide high-quality talent, there is growing evidence that others violate U.S. laws and mistreat their recruits.
Several types of fraud have become common, according to documents from recent lawsuits and interviews with foreign workers, employers, lawyers, and consultants. In some cases companies target young men and women hungry to get well-paid tech jobs in the U.S. and charge them exorbitant fees for visas, which is not allowed under American immigration laws. Even after paying, some workers never get a visa; those who do may find the company they paid has no job for them, as Patel did. This violates U.S. law because companies are supposed to have an open position before they apply for a work visa.
Workers who land tech jobs may face other kinds of trouble. Some companies place foreign workers at client sites and then siphon off part of their pay or charge ongoing fees, which violates U.S. law. Many workers allege they're not paid in between jobs at client sites, though such "benching" without pay isn't allowed either. In other cases, companies claim they're employing people in low-salary regions when they're actually working in high-wage areas, in violation of rules requiring payment of the region's prevailing wage.
Sterling President Nilesh Dasondi was charged with multiple counts of visa violations in the case filed by the U.S. attorney in New Jersey. The government says he collected fees of up to $15,000 from the six workers, left them to find jobs on their own, and extracted more fees to launder their pay through his company. The workers acquiesced because Dasondi, like all employers of visa recipients, held their visa documents and could have revoked the papers if they objected. "This is a microcosm of a big issue that's facing our country—visa fraud," said Sandra L. Moser, the assistant U.S. attorney prosecuting the case in an interview after Patel's sentencing.
Dasondi greeted a reporter at the doorway to his offices in Edison one summer day. From a glass door on the parking lot side of a beige one-story building, he led the way through a warren of cramped rooms, with half a dozen people pecking away at computer keyboards. "My life is such a mess right now," he confided once he was seated in a small conference room. He wouldn't discuss details of the cases against him or Patel, but he promised to talk after it is resolved. Dasondi's lawyer, Eric R. Breslin, says his client "has been an asset to his community" and that Sterling "performs legitimate services for its customers."
"BODY SHOPS"Tech service outfits such as Sterling have thrived in recent years because of shifts in the U.S. economy. As cost-cutting pressures have increased, companies turned over management of tech systems and other back-office operations to outsourcing firms, including many that bring workers from India and other countries into the U.S. on temporary visas such as the H-1B.
One important way outsourcers hold down costs is by keeping a lean workforce at each client site—then turning to smaller companies, such as Sterling, when they need to increase staff for specific projects, such as installing new software or building a new Web site. These companies are known as "body shops" because of their role, and often rely heavily on foreign workers who come into the country on H-1Bs and other visas. "This is where a lot of the shenanigans take place," says Ron Hira, an assistant professor of public policy at the Rochester Institute of Technology who has written extensively on work visas. A study by the federal government last year estimated that 54% of visa rule violations were committed by companies with fewer than 25 employees.
U.S. companies usually don't know—and don't press to find out—which body shops are tapped to support their tech operations. The result is that prominent American companies can easily end up doing business with tech service outfits that violate visa laws. Breslin wouldn't identify specific Sterling clients, but he says they include "significant companies." Dasondi named Computer Sciences (CSC) as one customer in a 2006 lawsuit: Dasondi wanted the technology giant to pay him for hiring away one of his employees. Computer Sciences would not comment on the case beyond saying it had been settled.
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