VI. B-1 WORKERS IN THE U.S. – ISSUES

Government studies and advocacy reports on B-1 workers are either nonexistent or hard to find.  Examining the extent of labor exploitation in the B-1 program is uncharted territory. Perhaps the most pressing issue is the fact that the U.S. government does not seem to track the use of the B-1 visa for work.  The lack of basic data makes it difficult to analyze the extent to which these subclasses are utilized by businesses to fill their labor needs, not to mention the issues faced by workers.  Indeed, transparency is needed to examine the potential for visa fraud as well as labor exploitation. This is especially troubling with regard to B-1 domestic workers, given documented abuse of domestic workers generally.  With B-1 in lieu of H-3 trainees, the primary concern is gross underpayment of wages.  With the B-1 in lieu of H-1B subclass, the primary concern stems from the fact that the workers are not paid at a level commensurate with their H-1B or American counterparts, because there are no wage requirements, and the possible misuse of the program to displace U.S. workers.  
 
 
A. Little-Known B-1 Domestic Workers Vulnerable to Abuse 
The fact that there is so little information available about the B-1 domestic worker program adds to their vulnerability.  Neither the number of B-1 domestic workers nor their nationality is published.  While there have been some accounts of B-1 domestic workers who have suffered as victims of human trafficking, the issue has not been widely studied.136   
 
B. Worker Exploitation 
The lack of any worker protections, government oversight, or transparency in the B-1 trainee program creates circumstances allowing for severe worker exploitation and even human trafficking.137 Even though B-1 visas were not designed to allow productive work in the U.S., and B-1 trainees are not supposed to be engaging in productive work for an employer, the reality is often starkly different.  Any program that potentially allows work but does not require a certain wage is problematic.  There is great potential for unchecked misrepresentations especially when international recruitment is involved.
 
1. Case example: John Pickle Co.
One case highlights the B-1 visa’s potential for severe worker abuse.138  In 2001 a U.S. company, John Pickle Co. (“Pickle”) recruited several dozen Indian workers to work in their Oklahoma manufacturing plant as B-1 trainees in anticipation of eventual employment at a newly created operation in Kuwait.139 Pickle contracted with an Indian company to recruit the workers, handle their visa applications, and pay the workers while they were being “trained” in the United States.140  The workers, however, were led to believe that they would be working only in the United States and paid large sums of money for the opportunity.141 The Indian recruiter promised the workers free room and board, medical insurance, at least two years of employment, initial wages of $650 per month plus overtime, which would be increased to $1,200 per month after 18 months. Pickle himself traveled to India and with the contractor, confirmed the terms of work in the United States adding that the workers would be afforded “promised amenities according to American standards.”142 When inconsistencies during the visa application process arose, the foreign recruiter brushed aside any concerns.143
 
Upon their arrival in Oklahoma, the workers’ immigration documents were confiscated.144 They were required to eat and sleep at the dormitory at the manufacturing plant. Armed guards restricted the workers’ ability to leave the facility. They received between $2.89 and $3.17 per hour for their work as welders, pipe fitters, and roll/brake operators at Pickle’s steel fabrication plant.145 The workers received their wages via direct deposit from the Indian contractor, who received the money for wages from Pickle.146
 
Several of the workers escaped and were identified by the U.S. government as victims of human trafficking.147 In the lawsuit that followed, the workers alleged wage violations of the Fair Labor Standards Act (FLSA), national origin discrimination under the Civil Rights Act, and several claims under state common law (false imprisonment, etc.).148 The judge found that Pickle owed the workers more than $1.24 million dollars in back wages and damages for their suffering.149 Prior to reaching this decision, the judge found that the Indian workers were “employees,” rather than trainees under the FLSA, in part because the employer controlled almost every aspect of their work and intended to create a competitive advantage and profit for itself by hiring the Indians, who possessed specialized skills, at low wages, for productive work to fill the needs of customers and generate income for a business.150
 
C. Visa Fraud
The lack of government oversight and transparency in the B-1 in lieu of H-1B program creates a situation ripe for fraud.  B-1 visas were not designed to allow productive work in the U.S. Indeed, the B-1 in lieu of H-1B visa is supposed to be for individuals who are already employed by the foreign company and are only in the United States for a short time.  However, because it is oftentimes much cheaper to hire a foreign worker earning foreign wages, there is a great incentive to take advantage of the B-1 in lieu of H-1B program and use it to staff a company.151 Within the information technology specifically, foreign job contractors have long provided engineers to U.S. employers for foreign wages.152 In some cases, using the B-1 visa for high skilled workers is fraudulent.
 
1. Case example: Infosys
In October 2013, federal prosecutors reached a record $34 million settlement with Infosys after a two year visa fraud investigation. The U.S. government found that the information technology company hired workers with B-1 visas to avoid the higher costs of the H-1B visa program, which gave it an unfair competitive edge and undercut U.S. workers.153 The case began in 2011, when a manager working for Infosys in the U.S. filed a whistleblower lawsuit against Infosys alleging the company retaliated against him for identifying potential visa fraud.154  Infosys is one of the top H-1B-users.  Its U.S. workforce is mostly comprised of nonimmigrant workers from India and provides on-site information technology consulting to corporate clients on a temporary basis.155 The whistleblower claimed that Infosys aimed to boost profits by importing foreign workers with B-1 visas instead of H-1B visas, which require adherence to strict worker protection rules.156 Infosys farmed out its B-1 workers to clients such as Wal-Mart, Goldman Sachs, American Express and Johnson Control.157
 
The whistleblower’s congressional testimony explained how Infosys paid the Indian B-1 workers a stipend of $15,000 per year, which is the salary they received in India, rather than the U.S. prevailing wage of $65,000 that would have been required under H-1B prevailing wage rules. In order to help disguise Infosys’ scheme from U.S. immigration authorities, the company created an internal website of “do’s and don’ts,” including specific written warnings such as not to “mention activities like implementation, design and testing, consulting, etc., which sound like work.”158
 
The court dismissed the manager’s retaliation lawsuit under Alabama state employment law, without passing judgment on whether the company had in fact committed visa fraud.159 Another whistleblower complaint regarding visa fraud at Infosys was filed in 2012.160 That separate case was resolved through mediation that same year.161
 
  • 136. D. North, Proposal: Let's Look at All the Foreign Worker Programs as a Whole, Center for Immigration Studies (June 7, 2012), available at http://www.cis.org/north/proposal-lets-look-all-foreign-worker-programs-....
  • 137. Michael A. Scaperlanda, Human Trafficking in the Heartland: Greed, Visa Fraud, and the Saga of 53 Indian Nationals “Enslaved” by a Tulsa Company, 1 Loy. U. Chi. Int’l L. Rev. 219, 238-243 (2004) (offering a detailed explaination of how misuse of B-1 in lieu of H-3 trainee visa effectuates trafficking).
  • 138. Chellen v. John Pickle Company, Inc., 344 F. Supp. 2d 1278 (N.D. Okla. 2004) (Chellen I).
  • 139. Id. at 1280-81. The company had previously trained foreign workers in the United States and then used them to launch their Middle East business venture. The employer indicated that “the training program was also a “good deal” for JPC because the trainees provided “cheap labor.” While court documents apparently do not clarify whether the workers received B-1 or B-2 visas, it seems unlikely that they would have been B-2 visas because they are for tourists and by all accounts, the visa applications were clear these workers were being imported for training.
  • 140. Id.
  • 141. Id. 1280-82. The workers did not believe they were being hired for a training program and invested large sums of money and left professional jobs in India for the opportunity.
  • 142. Id.
  • 143. Id.
  • 144. Id. The employer’s wife took the passports, visas, return-trip airline tickets, and I–94s and placed them in a safe.
  • 145. Id.
  • 146. Id. The U.S. employer set up separate bank accounts for each worker and the Indian recruiter deposited money into these accounts. The U.S. employer reimbursed the Indian company for payment of the workers’ salaries via a series of monthly wire-transfers set forth in a written agreement that was to be in effect for two years.
  • 147. Several of the workers received T-visas, available for victims of human trafficking. See 8 U.S.C. § 1101(a)(15)(T). The workers did not bring claims under the Trafficking Victims Protection Act, 22 U.S.C. §§ 7101, et seq.
  • 148. Chellen I, 344 F. Supp. 2d at 1279.
  • 149. Chellen v. John Pickle Co., Inc., 446 F. Supp. 2d 1247, 1294 (N.D. Okla, 2006) (Chellen II).
  • 150. Chellen I, 344 F. Supp. 2d at 1287-92 (relying on factors enumerated in Reich v. Parker Fire Protection District, 992 F.2d 1023, 1026 (10th Cir.1993) (quoting the Wage & Hour Manual (BNA) 91:416 (1975)).
  • 151. See, e.g., D. Papademetrious and S. Yale-Loehr, Balancing Interests: Rethinking U.S. Selection of Skilled Immigrants, at 173 (1996) (“The B-1 temporary business category is generally fine in concept, as it facilitates international commerce and trade . . . . however, the B-1 in lieu of H-1B concept raises some concerns. . . . Abuses of the B-1 visa category should be controlled through better regulations and more active enforcement. . . .”).
  • 152. See, e.g., J. Gentry and K. Kennedy-Luczak, HR how-to: foreign workers: everything you need to know about employing foreign workers, at 47 (2004) (citing “[a]buse of the ‘B-1 in lieu of H-1B policy by foreign job contractors providing computer engineers to U.S. employers under a consulting agreement”).
  • 153. J. Preson, Deal Reached in Inquiry into Visa Fraud at Tech Giant, The New York Times (October 30, 2013), available at http://www.nytimes.com/2013/10/30/us/indian-tech-giant-infosys-said-to-r... P. Thibodeau, Infosys ran 'unlawful' visa scheme, U.S. alleges in settlement, Computerworld (October 30, 2013), available at http://www.computerworld.com/s/article/9243672/Infosys_ran_unlawful_visa....
  • 154. The initial case was filed in Alabama state court but was thereafter removed to federal court. For background of Palmer’s case and connection to the October 2013 settlement, see The Economic Times, Infosys whistleblower could get $5-8 mn from settlement (Oct. 31, 2013), available at http://articles.economictimes.indiatimes.com/2013-10-31/news/43561373_1_....
  • 155. For a U.S. worker’s perspective of Infosys’s hiring practices, see Koehler v. Infosys, Class Action Complaint, Case No. 2:13-cv-00885 (E.D. Wis., filed Aug. 1, 2013) (Alleging that out of 15,000 U.S. employees, 90% are of South Asian descent), available at http://www.pbclaw.com/2013/08/02/proposed-class-action-complaint-filed-a....
  • 156. J. Preston and V. Bajaj, Indian Company Under Scrutiny Over U.S. Visas, The New York Times, (June 21, 2011) available at http://www.nytimes.com/2011/06/22/us/22infosys.html?pagewanted=all.
  • 157. M. Bahree and M. Jordan, Infosys Employee Testifies on Alleged Visa Fraud, The Wall Street Journal, (July 28, 2011) available at http://blogs.wsj.com/indiarealtime/2011/07/28/infosys-employee-testifies....
  • 158. One document uncovered states: “DO NOT TELL THEM YOUR [sic] WORKING.” See D. Rather, Huffington Post, Visa Loophole, (March 25, 2011) available at http://www.huffingtonpost.com/dan-rather/business-visitor-visa-fraud_b_8....
  • 159. J. Preston, Judge Dismisses Whistle-Blower Suit Against Infosys, The New York Times (August 20, 2012), available at http://www.nytimes.com/2012/08/21/us/alabama-judge-dismisses-infosys-whi....
  • 160. P. Thibodeau, Infosys faces new visa fraud allegation, Computerworld (August 9, 2012), available at http://www.computerworld.com/s/article/9230100/Infosys_faces_new_visa_fr....
  • 161. D. Thoppil, Infosys Settles Harassment Suit With Former Employee, Wall Street Journal (Dec. 14, 2012), available at http://online.wsj.com/article/SB1000142412788732398150457817895356764186... Tripuraneni vs Infosys case settled, Deccan Herald (Dec. 14, 2012), available at http://www.deccanherald.com/content/298586/tripuraneni-vs-infosys-case-s....

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