Firm in H-1B case looks to hire only U.S. workers

Peri Software says increased use of U.S. workers leads to a 'marked improvement in client satisfaction'

A Newark, N.J.-based software firm that settled an H-1B case brought against it by the U.S. Department of Labor told Computerworld this week that it has set a goal of hiring U.S. workers for all of its domestic positions.

Under the settlement disclosed last week, Peri Software Solutions Inc. agreed to pay about $638,000 in back wages to 67 H-1B workers as part of a settlement of a U.S. Department of Labor.

The company said that its plan to increase reliance on U.S. workers isn't the result of the settlement, but but was set because of business needs.

"We want to have our company reflect the local demographics as it helps to serve the clients better." said George McQuade, a spokesman for Peri, in an e-mail response to questions from Computerworld. "This improves our business as we foster better relationships with clients. The service is better due to cultural similarities."

McQuade also said with the increased use of U.S. workers, "we see marked improvement in client satisfaction, as well as client relationships."

This appears to be a turnabout for Peri, which has relied heavily on H-1B visa workers in the U.S.

The company says it has approximately 1,000 employees, including about 300 in the U.S., and others working in offices in India and China.

The Labor Department announced in February that it was bringing an H-1B case against Peri, who the U.S. contended owed back wages to 163 workers. The case went before an administrative judge who reduced the size of the government's claim.

Both sides subsequently agreed to the settlement, which was announced last week by the Labor Department. In addition paying back wages, Peri agreed to pay about $127,000 in civil penalties and to be debarred from participating in the H-1B program for one year, according to the consent decree.

The civil penalties were issued because Peri failed to provide notice of the filing of Labor Condition Applications at each place where any H-1B worker was to be employed, and for filing lawsuits against H-1B workers for early cessation of employment. DOL regulations require an employer to inform U.S. workers of the intent to hire a foreign worker by posting the LCA notice in the workplace.

In recent years, Peri gained government approval to hire nearly 190 H-1B workers -- 120 in 2007, 64 in 2008 and three in 2009, according to U.S. Citizenship and Immigration Services records.

Peri says about 30 of its employees now hold H-1B visas.

New Jersey has one of the higher concentrations of H-1B workers in the U.S., according a recent analysis of government data by Computerworld.

In a statement , Nancy J. Leppink, deputy administrator of the Labor Dept.'s Wage and Hour Division, said that "Peri Software not only took advantage of these workers by not properly compensating them, it also violated the part of the law that provides the greatest protection to the American workforce.

"When companies participating in the H-1B program do not post filed labor condition applications, they clearly undercut American workers who may be qualified for available employment but aren't aware of it," said Leppink.

Peri was an H-1B dependent employer, a designation under which the Department of Labor imposes additional recruitment requirements . Companies designated an H-1B dependent employer meet certain thresholds, such as companies of 50 employees or more with at least 15% of the staff holding H-1B visas.

Labor department rules state that "the H-1B employer is not required to recruit U.S. workers, unless it is H-1B-dependent."

McQuade took exception to Leppink's statement, and called it a "gross misrepresentation or overstatement of the facts." He didn't dispute the facts of the case, just the editorializing over a consent decree that had simply outlined the terms of the agreement without comment.

In October, Peri had said it had hired new legal counsel for immigration issues and installed a new management team "to oversee its hiring of H-1B workers."

In a statement at the time , Sarav Periasamy, Peri president and CEO, said the company "is committed to exceeding whatever it takes to ensure that we are in full compliance."

He also said that the company has "also launched a training program in an effort to boost the number of American employees. This will reduce offshore hiring and help Peri become a model for the industry nationally."

McQuade said that the company's goal now "is to rely on U.S. workers 100%."

The decision to hire U.S. workers "is not because of the consent order," said McQuade. "The whole strategy to hire all American workers has been in the works at Peri long before the DOL issues surfaced."

And according to Periasamy, said McQuade, "it has been a challenge in finding engineers in America with the right skills for the last 10 years."

The reason for hiring U.S. workers is pretty simple, said McQuade. "Obviously, the workers are happier, more productive when they work in their own country, can be closer to their own family and culture," he said. The company plans to boost its training in the U.S. as part of the effort.

As part of the consent decree, Peri was barred from the H-1B program for one year. The existing H-1B workers at Peri can continue to work at the firm.

Asked if it was the company's plan not to take on new H-1B workers after the debarment period ends, the spokesman said: "We will have to wait and see the conditions of the marketplace, what the technology challenges we face in developing new and maintaining existing software, hardware or other business solutions. And if American workers have the technical skills and qualifications needed to fill those positions, ideally American workers will have preference over H-1B visa applicants."

Peri list a number of openings on its Web site, including business objects developer, SAP expertise, mainframe consultant, risk management associate, among others.

Patrick Thibodeau covers SaaS and enterprise applications, outsourcing, government IT policies, data centers and IT workforce issues for Computerworld. Follow Patrick on Twitter at @DCgov , or subscribe to Patrick's RSS feed . His e-mail address is .

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Copyright © 2010 IDG Communications, Inc.

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