US based IT firm fined for underpaying Indian workers
New Delhi (Oct 24, 2014): A Silicon Valley company has been fined by the US Department of Labor for paying just $1.21 an hour to eight Indian employees it had flown in from its Bangalore office to install computer systems at its Fremont headquarters, the San Jose Mercury News reported on October 22.
The employees will get over $40,000 as owed wages which is the difference between what they were paid and the the Californian minimum wage of $8 per hour. The company has been fined $3500 for the violation.
"We are not going to tolerate this kind of behavior from employers," Susana Blanco, district director of the US Labor Department was quoted as saying by the Mercury.
The eight Indians worked from September 8 till Dec 21 2013. Some of the workers worked for up to 122 hours per week or over 17 hours a day. They were paid in Indian rupees, Mercury reported. The Labor Dept. came into picture after their San Jose office received an anonymous tip.
"This was discovered through an anonymous tip, and we need that kind of information to discover these sorts of illegal situations," Blanco was reported as saying by the Mercury.
The company is called Electronics for Imaging (EFI). It earned nearly $200 million in the third quarter this year, reportedly up 11 percent from the same period last year.
The company said it brought some IT employees from India temporarily to help its local IT team with the relocation of its headquarters from Foster City to Fremont.
"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 EFI, quoted by the San Jose Mercury. "During this process we unintentionally overlooked laws that require even foreign employees to be paid based on local US standards."
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. The company will ensure that this sort of "administrative error" won't occur again, Rubin said.
The $1.21 an hour was the lowest wage paid to workers that Blanco said she was aware of in the Northern California district, according to the Mercury. In 2012, Sunnyvale-based Bloom Energy was ordered to pay owed wages to 12 workers from Mexico who were being paid $2.66 an hour in Mexican pesos. The workers were repairing power generators.
"It is appalling that foreign labor is being brought in under these circumstances," Blanco said, the Mercury reported.