Workers paid $1.21 an hour to install Fremont tech company's computers

http://www.mercurynews.com/business/ci_26778017/tech-company-paid-employees-from-india-little-1

by velik_m • 12 years ago

52 42 12 years ago

boards2x3• 12 years ago

Must say, as an Israeli myself, I'm embarrassed. I've never heard of the company before but knew they were Israelies when I saw the names involved.

Just goes to show that exploitation, not (jewish) "genius", is behind most of what we mistake for success. So much for the Israeli "startup nation" and its offshoots.

darkstar9995• 12 years ago

What? This has nothing to do with Israel or Jews. It was a California company flying in Indians for cheap labor.

boards2x3• 12 years ago

CEO and founder, are both Israelis.

dreamweapon5• 12 years ago

Perfectly relevant, given the background of company's principals.

coldcode• 12 years ago

Electronics for Imaging's executive team should be publicly branded with some kind of colorful letter for doing this. Yet the punishment is a fine they likely found in an old couch.

Zikes• 12 years ago

Why not just call them interns and not pay them at all?

induscreep• 12 years ago

One of the most sensible questions in this thread...

gohrt2• 12 years ago

Because that's also clearly illegal.

ugh123• 12 years ago

Its not actually, if you define the work done in a specific way.

dominotw• 12 years ago

You can't get a visa for an intern.

anigbrowl5• 12 years ago

It's quite aggravating that the DoL can only fine them $3500. I think that at the very least there ought to be punitive as well as economic damages in cases of blatant abuse like this. The problem with our politics is that as soon as someone proposes putting muscular penalties in place for egregious misbehavior some lobbyist or PR flack will pop up with a story like 'Joe Schmoe made a simple math error in distributing tip income among his restaurant staff...under a proposed new law, he could face ruin and even jail time at the hands of heartless government bureaucrats.'

Beverly Rubin, vice president of HR Shared Services with Electronics for Imaging [said:] "During this process we unintentionally overlooked laws that require even foreign employees to be paid based on local U.S. standards."

That's a bit like your VP of accounting expressing surprise at discovering a requirement to file annual tax returns.

The company said it cooperated fully with the U.S. Labor Department once it became aware of the problem, and paid the back wages of the employees.

And why wouldn't they when the costs of noncompliance are so low? Despite being caught, they still only paid CA minimum wage of $8/hour to make up the difference - good luck finding anyone competent to install computers at that price on the open market.

Hopefully the firm will be held to account for immigration fraud as well as labor violations, because there is no way they applied for work visas for these employees - doing so requires making declarations about wage/salary equivalence. Most likely they told their Indian employees to apply for tourist visas and say they were staying with relatives.

x0x0• 12 years ago

I read that and wondered if it was a joke. $3500? Well that done showed 'em. Steal $40k, get busted, and get fined less than 10%.

jmathai• 12 years ago

We are not going to tolerate this kind of behavior from employers

then

resulted in more than $40,000 in back wages paid to the eight employees and a fine of $3,500

Show no mercy!

anigbrowl5• 12 years ago

The DoL can bring suit for back wages and an equal amount in liquidated damages - which is still not a very aggressive penalty, but would have been more impressive than this. I don't understand it.

http://www.dol.gov/dol/topic/wages/backpay.htm

darkstar9995• 12 years ago

a fine of $3,500

Are you fucking kidding me? Sounds like it's worth the risk in case you don't get caught. Cost of doing business, baby!

anigbrowl5• 12 years ago

How true. So they paid $40k in back wages - also trivial.

Per the story, there were 8 technicians and some worked up to 122 hours a week. Let's assume they worked an average of 60 hours a week (extremely generous to the employer). Let's also assume that their work was minimally technically demanding, just requiring reasonable care to break down, transport and set up computers from one location to another; I think $15/hour would be a cheap wage for that sort of work in the Bay Area.

8 staff x $15/hour x 60 hrs/week (no overtime) x 14 weeks is still around $100,000, far more than what the firm has had to pay out. If one were to include all applicable taxes and follow laws on overtime etc., I guess a realistic bill for that amount of work would be double that amount. So far it has cost them maybe $50-60,000 including legal fees - a bargain >:-(

jerf2• 12 years ago

"How true. So they paid $40k in back wages - also trivial."

I think the "triviality" of paying the back wages and the "triviality" of the fine are directly related to each other. $40K / (7.25-1.21) = 662 underpaid hours [1], or put into probably an even better unit for comprehension, 16.5 man-weeks or 4.25 man-months.

This is bad, and in particularly bad in a very revealing way. However, it's not like this was a sweatshop employing hundreds for months without detection, which I suspect the mental model people are reading into this story. While I suspect 3.5K is a bit low, the millions upon millions that I suspect many people are emotionally calling for would also be inappropriate.

[1] Forgive me if I don't fully spell out the units here.

michael_michael• 12 years ago

I hope they paid their attorneys a LOT more than that to get the fees down to $3,500. California's labor board is notoriously pro-employee and punitive towards employers who do not honor labor laws.

alexqgb2• 12 years ago

Treble damages is par for the course, from what I understand. And that goes directly to the worker, not the state.

anigbrowl5• 12 years ago

First, this is federal and not state, because they were foreign workers. It even says in the first paragraph of the article that it was the US Department of Labor rather than the California one.

Second, I hope you're wrong since a hearty income for the law firm would not benefit the underpaid employees, who I think still got a shitty deal even including the back wages.

pessimizer• 12 years ago

More importantly than the $1.21 is the fact that there's absolutely no reason for them not to continue doing it, and for other companies not to join in. If you don't get caught, you save $41K. If you do get caught, you pay $3.5K. You will rarely get caught.

jedanbik• 12 years ago

Who are these people that exploit their workers in this way? What do they look like? Where is their shame?

potatolicious• 12 years ago

They look like you and me. They may in fact, under different circumstances, be you and me.

It's IMO dangerous to think about this sort of thing as being only possible by a certain "type" of person. The road to hell is paved with good intentions, and human beings are very, very good at rationalizing their own behavior, particularly when the descent is gradual.

"If I don't pay them [unfair wage] they'd be out of work anyways. I'm the least of the evils."

"They're earning they would be at home with this bonus, this is good for them."

etc etc. The number of rationalizations is practically infinite.

All of us are susceptible to it. I've seen people better than me fall to frog-boiling rationalizations and I'm not insane enough to think I'm immune. There's a lot to be said for reality checking yourself frequently.

dreamweapon5• 12 years ago

And hey, just for fun: next time you're in some work situation and you get wind of behavior like this, or even something far less egregious (such as blackhat web scraping or other blatant IP abuse -- very common out in start-up land, btw), try confronting those responsible on it. It usually doesn't end well.

beachstartup• 12 years ago

well, in my experience, in the tech industry, generally they look just like the workers they are exploiting.

gohrt2• 12 years ago

The people who make the stuff that you buy, how much do they get paid?

Or do you just assume that works itself out?

ancap• 12 years ago

What is all this talk about exploiting? Were the workers forced to work? If so, why pay them at all?

dreamweapon5• 12 years ago

"During this assignment, they continued to be paid their regular pay in India, as well as a special bonus for their efforts on this project," said Beverly Rubin, vice president of HR Shared Services with Electronics for Imaging. "During this process we unintentionally overlooked laws that require even foreign employees to be paid based on local U.S. standards."

For someone at the senior management level (directly responsible for cross-border staffing, no less) to say that they "overlooked" such laws is either a sign that they are either utterly incompetent -- or plainly lying.

eyeareque• 12 years ago

After going to India a couple of times I could see people from there not caring about the low wages just so that they could go to California.

With that said the fines should be MUCH higher.

Also, this is a dupe of: https://news.ycombinator.com/item?id=8498341

jessaustin• 12 years ago

It would be nice if the legions who decry "illegal immigration" at every opportunity could get upset about this, but unfortunately many of them only criticize in circumstances of a racially-precise nature. Actually even if I got my wish and most of our racist immigration laws were repealed I would still support new regs to lower the boom, in remaining-in-business-threatening fashion, on companies that pull this shit.

EDIT: If you don't want me to be referring to you, then I'm not.

api• 12 years ago

This is doubly insane given that it's in the Bay Area. I don't know how anyone can live there for under $100k/year.

ams6110• 12 years ago

They aren't living there.

pyrophane• 12 years ago

Does anyone know how they would have been able to bring in the foreign workers to do that job in the first place? Is there a short-term work visa for this sort of thing?

Workers paid $1.21 an hour to install Fremont tech company's computers

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