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H-1B workers at San Francisco tech company underpaid

The minimum salary for H-1B visa holders is US$60,000 annually. Source: Shutterstock

A technology firm in East Bay, San Francisco has been accused of violating H-1B visa rules by not paying their foreign workers according to the wage levels required.

The federal government alleged that a dozen workers from India were paid as low as US$800 per month when Cloudwick Technologies of Newark had promised monthly wages up to US$8,300, Silicon Valley reported.

“Investigators found that the company paid impacted employees well below the wage levels required under the H-1B program based on job skill level, and also made illegal deductions from workers’ salaries,” the department said in a news release.

“As a result, some of the H-1B employees that Cloudwick brought from India with promised salaries of up to US$8,300 per month instead received as little as US$800 net per month.”

For violating the visa rules, Cloudwick now has to pay around US$175,000 to the 12 employees for as back wages, a common remedy whereby the employer makes up the difference between what the employee was paid and the amount he or she should have been paid.

American employers use the H-1B temporary visa program to hire foreigners with at least a bachelor’s degree in “specialty occupations” where there aren’t enough high-skilled American workers to fill available jobs. Many work in the technology sector, including Cloudwick, which is a data analytics company whose client base include Apple, Cisco, Comcast, American Express, Bank of America, Safeway, Verizon and Visa.

Successful applicants can then work legally in the US for three years.

It’s a controversial visa program. Some parties blame it for displacing American workers with cheaper foreign labour, though supporters say it is vital for companies to have access to the world’s best talents.

This alleged wage violation appears likely to fuel the former misconception even though the actual situation is far more complex.

Cloudwick disputes some of the claims by the government. The labour department had “misrepresented” some facts about how Cloudwick used the H-1B visa program, according to the company’s founder and CEO Mani Chhabra.

“Cloudwick has never brought resources from India,” Chhabra said on Tuesday. “All the resources are Master’s students that have educated in U.S. and then we hired and trained them.”

Chhabra said the workers were paid US$800 during training and the issue of back-wages only arose because the labour department had made changes to the visa categories.

“This is not allowed for H-1B and we paid them back wages,” Chhabra said.

The company agreed in writing to hire an independent monitor to make sure Cloudwick complies with H-1B rules in future, the labour department said.

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