Labor Department settles H-1B case for $1.7M

IT services firm didn't pay required wages in case involving 343 H-1B workers, agency says

WASHINGTON -- A Virginia-based IT company will pay nearly $1.7 million to 343 employees holding H-1B visas under a settlement with the U.S. Department of Labor.

The Labor Department, in an announcement yesterday, said that Globalcynex Inc. in Sterling, Va., had not paid the employees their required wages from March 2005 through March 2007. Moreover, the Labor Department said H-1B workers were charged training fees of $1,000 to $2,500 in violation of the law.

If the settlement were split evenly among all 343 employees, they would get nearly $5,000 each.

The settlement is one of the largest of its kind involving the H-1B program. A recent internal study by the U.S. Citizenship and Immigration Services (USCIS) suggests that problems with the visa program are widespread. The study, based on an examination of about 250 H-1B users, concluded that as many as one in five H-1B applications involve fraud or the use of inaccurate data that is in technical violation.

"This case underscores the firm stance the wage and hour division is taking to ensure that employers do not undercut American workers by underpaying temporary foreign workers," said Corlis Sellers, regional administrator for the Labor Department's wage and hour division's northeast region, in a statement.

The H-1B program has been attacked by U.S. Sen. Chuck Grassley (R-Iowa) as a means replacing U.S. workers.

Globalcynex runs operations in Hyderabad, India, and provides offshore services. Its service offerings include SAP AG and data warehousing, according to details on its Web site. The company didn't respond to request for comment.

In 2006, Globalcynex had 137 H-1B petitions approved; in 2007, it had 142, according to U.S. Citizenship and Immigration Services records.

A search of the Labor Condition Application (LCA) database at the Labor Department turned about 950 entries. LCAs are filed by employers and include provisions where the employers must attest that they are paying prevailing wages.

Until the economic downturn, the tech industry is pushing for more H-1B workers. The U.S. Senate had approved an increase last year as part of the immigration reform bill.

Copyright © 2008 IDG Communications, Inc.

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