Bay Area tech company caught paying imported workers $1.21 per hour

[OhioChick]

Last edited Fri Oct 24, 2014, 12:04 AM - Edit history (1)

Source: Engadget

Ever heard of Electronics for Imaging? We hadn't either until this morning, but it's apparently a multimillion dollar, multinational, public corporation based out of Fremont, California. And the United States Department of Labor just caught EFI red-handed in an investigation, which found that "about eight employees" were flown in from India to work 120-hour weeks for $1.21 per hour. EFI apparently thought it was okay to pay the employees the same wages they'd be paid in India (in Indian rupees). Here's the unbelievably crazy sounding quote EFI gave to NBC's Bay Area affiliate: "We unintentionally overlooked laws that require even foreign employees to be paid based on local US standards."

Just so we're clear: is there anyone reading this who doesn't know that any person working in the United States is legally required to be compensated according to United States laws?

Alberto Raymond, an assistant district director with the US Department of Labor told NBC, "It is certainly outrageous and unacceptable for employers here in Silicon Valley to bring workers and pay less than the minimum wage." And that applies to EFI especially, which posted just shy of $200 million in revenue in its last financial quarter. EFI is publicly traded on the NASDAQ exchange, and the company's in the business of computer peripherals (mainly printer-based stuff).

The eight employees are being paid $40,000 in owed wages; they were reportedly installing computer systems at the company's headquarters. EFI was charged $3,500 -- yes, seriously -- for being at fault.

Read more: http://www.engadget.com/2014/10/23/efi-underpaying-workers/?ncid=rss_truncated

---

EFI is a $109 Mil company. CEO "earned" $6 Mil salary and bonus

Electronics for Imaging is successful. The company earned $109 million last year and awarded CEO Guy Gecht with a pay package valued at nearly $6 million, including more than $1.2 million in salary and bonuses.

http://abcnews.go.com/Technology/wireStory/tech-firm-fined-paying-workers-121-hour-26405622

[Omaha Steve]

1. FIRST K&R for workers

My thanks to OhioChick.

[CaliforniaPeggy]

2. There's only ONE smiley that works for this awful story:

[TBF]

51. I think this one works as well

I have a hard time believing this was just an unintentional mistake. No HR department is that stupid. And now that they got away with only a $3500 fine everyone will be doing it.

[Erich Bloodaxe BSN]

52. A $3500 fine for failing to pay $40k in pay?

I'd certainly call that incentive for businesses to try and do it as often as possible.

(Edit: According to a comment, it was a $3500 fine for failing to pay $320k in pay, not 40k. So a fine of just over 1% of the amount they were stealing from the workers. If there's a clearer way to tell businesses that doing the same thing and risking getting caught is a reasonable 'cost of doing business' I don't know what it would be.)

[FiveGoodMen]

74. Absolutely awful

Heads should roll over this.

[Initech]

67. Actually I think this is more appropriate:

[ChromeFoundry]

3. "We unintentionally overlooked laws that require..."

"We unintentionally overlooked laws that require even foreign employees to be paid based on local US standards."

Yeah, that sounds plausible - bullshit.

[MisterP]

7. "laws apply to foreigners? who knew! please don't DNA-test our cafeteria meat"

[Aerows]

41. "We overlooked the fact

that we are monumental pricks so greedy we will run human beings into the ground to save a buck."

[suffragette]

105. You summed that up well.

Add "and so we can profit off their misery and keep all the profits their hard work created."

[sakabatou]

42. BS excuse

[LibDemAlways]

4. i would hate to see where those employees were

living. The Fremont area is very expensive. They were either homeless or sharing a single room in a cheap motel. What a disgrace.

[Ed Suspicious]

11. They worked 122 hours per week. Probably pulled out the cot at the office.

[LibDemAlways]

17. or brought sleeping bags and shared floor space. N/t

[Tommymac]

31. In a car?

I remember 8 Indian contract workers piling out of a small car every morning when I was working as an IT consultant at a NOC for a fortune 100 company here in PA.

The consulting firm (based in India) held their visas and green cards and they all lived in an efficiency apartment - 8 of them. They could not quit or if they got fired they would have been here as illegals since they did not have their green cards or visa's on them. They said they got paid the equivalent of the minimum wage, but from anecdotal evidence we think they were getting around $2-3 an hour. They would stay in the US for 6 months then be rotated back and replaced with other workers. This was in 2004-5 timeframe. Some of us reported this to the State Labor Board but we never heard anything back and I moved on shortly thereafter.

[redruddyred]

45. I live in a resort area.

and hotels overwhelmingly show a preference for foreign labor over locals.

it's odd because they are not necessarily more efficient, but definitely less trouble, as managers don't have to bother to relate to them as human beings. probably it diffuses some of their guilt for paying such crappy wages.

[PeoViejo]

58. One of my Brothers is a Slum Lord

He loves Haitians. They bunk 12 to a room, never any complaints about noise or bad behavior. They always pay their rent on time and keep the Apartments in good condition. I know it sounds pretty sick, but he's in it for the Money. Every time I see him, it's always "Those fucking Liberals."

[appalachiablue]

75. The case with hotels, 'the hospitality industry' all over US. It's dominant in DC area, metro FL.

Foreign, desperate, docile workers are paid cheaply and abused in hotels, restaurants and hospitals.
Once at a top chain hotel in suburban DC a fire alarm went off during breakfast in the lobby. Much commotion, a fire truck arrived, the poor head kitchen staffer finally came out terrified, yelling in Spanish and clueless. No manager in sight. Fortunately the problem must have been solved.

Many hospitals, medical offices, almost all retail stores, restaurants and banks also employ cheaper, foreign workers in the WDC area. The increase since 2000 is tremendous.
Penny PRITZKER of Hilton Hotels and Superior Bank of Chicago (sub prime fraud) was instrumental in breaking union hotel workers. Along with Wall Street she supported Obama, and was recently made Secy. of Commerce.

[TexasMommaWithAHat]

80. But those are jobs Americans won't take

so it's ok to pay slave wages.

sarcasm/

[redruddyred]

89. do notice that it's only ever people with six figure white collar jobs

who make that statement.

[appalachiablue]

90. I described the reality of areas mentioned

and an instance of workers and others facing a potential crisis without a manager's assistance. The latter is a poor reflection on the employer and the corporate management, not the employees.

Historically people of foreign origin move for economic opportunity, education or refuge from unstable governments, the case with my son's fiancé who is Indian and my sister's family in FL that is Cuban American. Other family white and black came from Europe and Africa many years ago.

As I've read, and know of from friends from South Asia who are working on H-1B visas, employers exploit employees through uncompensated overtime work and other negative conditions knowing they are in need of income, their visa status and vulnerability. The abuse also occurs among non foreign workers unfortunately.

There's been a large increase in migration since 1990 when the H-1B visa program was set up as reflected in the geographic areas I mentioned and elsewhere I the US. It's a fact that there are many foreign workers in jobs around DC, suburban VA & MD, the case with many large urban centers. The move toward a more diverse, multi ethnic, multiracial US is underway, built on centuries of those who came before also seeking advantages and opportunity.

No 'six figure salary' here (not all metro DC has streets paved with gold. nice myth though).
No 'racist framing' here.
No 'THEY'RE taking our jobs' here.
Might want to check assumptions, generalizations, racism and classism judgment.

[redruddyred]

94. is this addressed to me?

because my post was not addressed to you.

[appalachiablue]

95. I received your post #88 in response to my post #75

(you) 88. 'in this light, I find the racial conflicts among the working classes to be silly. framing the problem in terms of race seems to be missing the point altogether. of course they're taking our jobs. And whose fault is that?' (me) 75. I mentioned a hotel incident, the many foreign workers in DC area, FL.

Since there was no talk of foreign workers having 'racial conflicts' among themselves, I thought in 88. you were identifying me, my writing as from a working classer w/ issues with other races, foreign people and workers etc. (Maybe my Appalach. handle implies hillbilly, racist, bigot. I hope not).

(me) 94. Elaboration on 75. and more. Stressed that I know and have family who are foreign and of many backgrounds; reality of the WDC area's many foreign workers. People on H-1B visas I know are overworked, exploited, etc. No 'racist framing', 'they're taking our jobs' on my part.
DC area has regular people & neighborhoods-not all rich, hi income lobbyists, defense contractors.

Use of phrases 'racial conflict', 'race framing', 'they're taking our jobs' in 88. caused me to write 94.That's the way I saw it and replied. If I'm not getting your msg., my apology and you have a nice day. It's beautiful here and we're going out to a fall festival.

[redruddyred]

97. oh okay

no, I really try to avoid from making those kind of personal attacks as it tends to upset people and get my posts removed.

Maybe my Appalach. handle implies hillbilly, racist, bigot. I hope not.
oh yeah actually I'm a socialist dem from texas so I bear the brunt of that. but no it was not addressed to you. I was thinking more along the lines of NE comedians such as Stewart, Colbert, Maher, who on top of the white privilege thing, also have the upper-middle class thing going too.

speaking to both points, I think there's a bit of snobbery about the more upper class liberals who assume that everyone who counts is upper class and therefore wouldn't want to do lower class jobs, and also that all lower class people are "hilbillies" and therefore not smart enough to be liberals. actually I think it's at least partially their fault that people like sarah palin have been so successful.

[appalachiablue]

99. No problem, I really didn't get concerned about the comment, more that I didn't know

where it was coming from. Much division and hate in this country, more than I've ever seen as often follows an economic crisis -brings out conservative instincts. But the hate's been building long before 2008. Blaming, bashing now coming from every corner, even among some Dems., Duers I sense.

Adamant use of 'Blue State vs. Red State' phrase, scolding and invective bug me. 'We're superior, the best (and maybe the only) true liberals. The rest of you dumb, backward, uneducated, poor SOUTHERN screw ups in Red States are messing up everything! Why do your people vote against their best interests. And we're paying for you with our tax dollars!' (Libs in Red States are second class at best). Plenty justification for much I guess. I lately think the US would be better off with some kind of separation, sooner than later.


RE the comedians, I like Stewart, Colbert though I forget to watch now, too many commercials. Maher worked my nerves over frequent 'hillbilly, Alabama, redneck' jokes-incest, stupidity, the usual, a few years ago but noticed he's let up some, perhaps because he tours a lot. HBO is being eyed by News Corp/Fox for a takeover, as he's mentioned. Makes me appreciate the few liberal shows left. Re lack of empathy for the working class, I'm not sure. Wonder if their network has something to do with that. All are wealthy, but who knows when hard times might hit a relative so a working class job offer would look good. There but for the grace of God go I. Nice chatting Texas. I'm born, raised WV, departed for college and work to VA, DC.

[redruddyred]

100. yeah, it's pretty hard to profile someone from an avatar.

but I'm glad you weren't offended.

red states do suck tho, but that's not necessarily the fault of every single person who lives there. your region seems likely to soon see the light of day however; there's good evidence to show that appalachia is turning purple.

I grew up in the inner city, which was solid purple, but since has turned blue. I now live in one of the redder counties of a purple state; shockingly I think this part of the world is more conservative than my hometown in texas, which, by the way, is not austin, although perhaps voters are smarter and more informed in these parts.

anyhow, as such, I can appreciate that the population of these places is not entirely homogenous, but still, how do y'all stand it? WV has weird politics but genuinely nice people; in texas the shitty politics seemed to stem organically from the shittiness of the people themselves.

that's all.

[redruddyred]

88. in this light, I find the racial conficts among the working classes to be very silly.

framing the problem in terms of race seems to be missing the point altogether. of course they're taking our jobs. and whose fault is that?

[appalachiablue]

92. "I can hire one half of the working class to kill the other half", attributed to

19th cent. US robber baron railroad industrialist Jay Gould, about a pending worker labor strike.

In labor situations tensions arise among workers when their security is threatened obviously. It's a byproduct of the ruling owner and corporate class who profit. In life all people tend to dehumanize and exclude the 'others' in order to benefit or protect their status unfortunately.

We've been in this global economic system for 500 years. It's taking a different turn lately because of deregulation on the part of governments, improved internet communication internationally and the disruption of countries and people from 40 years of neoliberal free market economic policies. And good old human greed.

Whether it's bringing in Indian, Asian workers to work for inhuman, slave wages and to live in crowded apartments; outsourcing corporate and banking 'back office functions' overseas to foreign countries with cheaper costs; profiting as a slum lord through Haitian renters crowded in dwellings (all described in posts to this thread); and simultaneously lowering wages, reducing hours and benefits for US domestic workers-

Cui Bono? The transnational corporate class in power and the politicians they own, all who profit immensely.

[redruddyred]

93. that much is obvious, the question is, "what to do?"

(and if the free market is so great, why does the service at my bank suck balls?)

strengthening working class cohesion seems one solution, but this is more easily said than done. there are a lot of stupid, petty people out there.

[appalachiablue]

96. Through no fault of their own, I don't think the vast majority of Americans realize the

how and why, the intricacies of corporate outsourcing overseas and insourcing workers through visas and other methods described in these posts re exploitation of Indian workers paid $1.21 in CA. The systems are very complex, maybe intentionally and there's little to nothing covered in US MSM.
Americans know they're hurting from the stagnant wages, recession, lack of good jobs.
It's real mess. What to do about it all is indeed the issue. Many think there has to be a huge grassroots mvmt. to try to counter all the ills and rebuild. Hope I live to see it.
A poster to this thread recalled a construction worker's T-shirt that said: 'United we stand. Divided we beg'. The obvious again, but still great. Take care!

[redruddyred]

98. I think people are catching on tho.

except for maybe the really hardcore teaparty/libertarian types. seriously, wtf is up with that?

bernie sanders is testing the waters for a presidential run and has been talking about a very large grassroots movement as per what the environmentalists are doing right now. I've done some grassroots stuff before so I think there's good potential for it, but I worry that he's too far to the left for most of the country.

[Blue_Tires]

101. +1

The resort hotels and neighboring businesses in my hometown started using Eastern Europeans (Poles, Czechs, etc.) a few years back...There's evidently some "program" that shuttles them in and out during the tourist season...

When the newspaper started asking business managers about it, they replied with the age-old "But none of the local teenagers want to work these jobs" -line...

[redruddyred]

104. oh... right....!

the local adults would be willing, too, if they'd pay us half enough to live on!

[Starry Messenger]

5. k&r

[lunasun]

6. 120 hr work week wouldn't that be around 17 hrs a day 7 day/week?

I need my calculator it is late ...

Eta yes it would be

[mrdmk]

32. 17.3 hours per day, 7 days per week at 121 hours for the week (read that in another thread)

Next question would be did they work through lunch and dinner breaks (there are required dinner breaks after 8 hours in California)?

This company just went onto my 'shit company' list to say the least...

[lunasun]

61. Doubt they followed anything required by law labor wise

[BlueJazz]

8. I can't prove it but I'm 90% sure this same crap has happened twice this same year in...

Union City and Newark, California. No bullshit.

[sammy750]

9. In Arizona 2 years ago, a major car wash

in Tucson and Phoenix were making the workers go off the clock when not actually working on a car. Nineteen car washes were stealing millions of $ of wages from workers. Business will do anything not to pay a fair and just wage. That is why unions are so important, it gives the workers power.

[cstanleytech]

13. Agreed there are times unions can truly be an asset. nt

[madokie]

39. When would they not be?

[Erich Bloodaxe BSN]

53. I guess when they're 'thin blue lining'

to protect killer cops from facing murder charges for killing unarmed black men?

That's about the only time I can think of.

[heaven05]

65. +1000

[cstanleytech]

57. When the employees dont want one because their company treats them well.

And yes it does happen though its very rare these days.

[whathehell]

62. It's likely they treat them well because of the THREAT of the Union..

Were unions suddenly made illegal in this country, they'd probably be

paying them the dollar a day companies pay workers in union-hostile

Third World countries.

[cstanleytech]

83. Could be you are right. Mind you overall I believe unions can be good

especially when you have workers being exploited and paid poverty level wages like for example at Walmart.

[appalachiablue]

10. Incredible.

[cstanleytech]

12. "We unintentionally" Total and utter BS there is zero, none, zilch way that it was unintentional.

[OffWithTheirHeads]

14. This is not a sustainable business model.

I just sold my condo in Silicon Valley. If you are lucky, you might survive for 12 minutes on $1.21 per hour. I suppose 20 people could rent a room by the month if they don't eat or use any utilities, but, I'm sorry, I just don't believe this. You can not live in Silly Valley on less than about $100.00 per hour.

[greatlaurel]

15. What brand of equipment does this companu make?

I would like to avoid buying any of their products. If they are willing to do that to their workers, then they cannot be trusted to make products that are not full of spyware/dangerous/safety hazards.

Wow, what a bunch of crooks.

[ChromeFoundry]

20. Fiery® Printers, mostly. n/t

[jmowreader]

34. You won't buy any of their products.

They make Fiery print servers, VuTEK inkjet printers, Jetrion label printers, a machine that prints ceramic tile...a Jetrion label press is used for packaging labels, and the smallest VuTEK inkjet has a carriage five feet wide.

They make one that's sixTEEN feet wide too. You can do two different things with it - you can thread five-meter banner stock into it, or up to three rolls of 54" vinyl side-by-side. If you print three rolls at the same time, you can print three jobs at the same time. It's very productive, and VuTEKs print like bats out of hell - 700 square feet per hour in "point of purchase quality mode," laying down eight inks per pass; it'll print billboard at 2800 square feet per hour. (Translation: the biggest billboards are 14 x 48, and this thing can print one in 16 minutes.) It's almost 30 feet wide, over six feet high, eight feet front-to-back without the supply and take-up spools, weighs 13,000 pounds, comes with a crane to load it, pulls 70 amps of 220-volt three-phase power and has to be plumbed into an air compressor. It doesn't use ink cartridges; the ink comes in five-liter jugs and is poured into tanks. Price? $600,000 and up, depending on options, they take two months to get once you pay because they're custom made - and they don't turn a screw on it until they inspect your place because your providing power, a loading dock to get it off the truck, the right quality of compressed air and ventilation is a contractual obligation. A company I once worked for thought about buying the smallest printer they made at the time, and it was $150,000.

The shit they make is beyond anything the mind can imagine.

[davidpdx]

16. Close them the fuck down and jail those responsible

They got a slap on the wrist only having to pay the $320,000 in back wages and $3,500 fine. That is chump change to a large corporation like EFI.

[aggiesal]

22. Completely agree, and ...

what they'll do is send these workers back to India with
their treasure, never to be seen or heard from again, and
they'll import a new batch of $1.21/hr. workers.

And why not? American workers probably would be paid around
$100K/yr.

So they're still coming out ahead even when they get caught.

You can't tell me those positions couldn't be filled by unemployed
american engineers.

Those bastards.

[mrdmk]

33. Actually a computer tech makes 40k plus a year depending on certs and experience

If you can get a job

[aggiesal]

40. You'll never convince me that ...

these employees were just techs.

Corporations are begging to increase the H1B quotas just for this purpose.
I've long suspected that they're under paying, but this level is astonishing.

[appalachiablue]

76. Prior to REAGAN's 1986 amnesty for agricultural workers to benefit business, administrations

prosecuted illegal employers of foreign workers I've read. Agree the EFI corporation should be shut down and the executives fined heavily and jailed. What shame to Silicon Valley and CA.

From Hedrick Smith's 2012 book, 'Who Stole the American Dream?", reprinted in in YES! Magazine, Fall 2014.

"1990 Congress passes H-1B visa program. By the early 2000s, nearly a million college educated Americans lose their jobs to foreign workers, mainly in high tech fields."

[ChromeFoundry]

18. EFI is a $109 Mil company. CEO "earned" $6 Mil salary and bonus

Electronics for Imaging is successful. The company earned $109 million last year and awarded CEO Guy Gecht with a pay package valued at nearly $6 million, including more than $1.2 million in salary and bonuses.

Source: http://abcnews.go.com/Technology/wireStory/tech-firm-fined-paying-workers-121-hour-26405622

[OhioChick]

19. Added to the OP

Thanks.

[Judi Lynn]

21. Congratulations, Guy Gecht, CEO, Electronics for Imaging, on your $6 million pay package.

What a natural wonder you are. How the masses of struggling, suffering people must worship your selfless work to make a better world for everyone.

[center]

~ ~ ~[/center]
Guy Gecht: CEO, Electronics for Imaging

Executive Profile

 SUBSCRIBER CONTENT: Aug 23, 2013, 3:00am PDT

Patrick Hoge Reporter-
San Francisco Business Times

Background: Native of Israel, moved to Bay Area in 1990. Joined EFI in 1995 as head of research and development and quickly became CEO. Revenue rose from $401 million in 2009 to an expected $700 million this year. The 2,400-person company bought a building in Fremont for a new headquarters, with the move expected in October.

First job: Software developer at age 14 at Ben Gurion University in Israel.

Education: B.S. in mathematics and computer science from Ben Gurion University.

Residence: Los Altos.

Business strategy

How’s business: Business is good. We have finished transforming the company over the past seven years, moving away from paper to areas of printing where there’s actually quite a bit of growth. We bought a Spanish company last year that makes equipment for printing on ceramics. We are also a big manufacturer of inkjet printers used to print on billboards and other large formats. We can print on any material up to two inches thick.

Biggest challenge for your business: As you grow, you want to make sure you are careful where you grow investment, that you hire the best-caliber people.

What’s going to change at your company in the next year: We are going to get more international, potentially acquiring more companies.

More:
http://www.bizjournals.com/sanfrancisco/print-edition/2013/08/23/guy-gecht-ceo-electronics-for-imaging.html?page=all

[suffragette]

106. Guess doing this is what he means by "get more international."

I doubt that small fine will deter his scummy practices.

[alittlelark]

23. Lived there...just sold my house....

...it is worse than you could contemplate.

Desperate educated ppl from foreign lands are courted then snared.

Nasty bit of BIG business back there - just another good reason to leave.

[ChromeFoundry]

24. EFI Careers

The success-driven, collaborative employees who make EFI an industry leader are rightly rewarded with a generous total compensation package. These benefits and perks apply to the majority of employees, with some offerings based on employee location.

Salary/Bonuses

In addition to competitive salaries, EFI has bonus and company stock purchase programs. Some locations provide employees with retirement and pension plans, along with other financial benefits.

Health/Medical

From your first day of work as an EFI employee, you and your eligible dependents can participate in health/medical/vision plans. Since EFI subsidizes part of these plans, the cost to employees is lowered dramatically.

Additional Benefits

EFI's commitment to helping our employees achieve a balanced life is seen in perks like personal time off, paid holidays, tuition assistance, pet insurance and advise on legal and financial matters.

EFI's supportive environment is also demonstrated via frequent company-wide celebrations -- from informal to more elaborate -- and a company newsletter. At quarterly meetings, employees can talk openly with EFI executives.

In addition to our generous overall compensation, EFI encourages extra incentives through special recognition awards that might be given as cash, gift certificates and more.

Source: http://w3.efi.com/Careers/Why-EFI/Benefits-and-Compensation

[whereisjustice]

27. This is boiler plate bullshit, they will farm you like an animal just like every other corp. eom

[jtuck004]

25. There are a few dozen cases of slavery every year in the U.S., seems like this should be added.

They knew better, and need to pay a big, big price.

I'm not sure India shouldn't get involved and cost the U.S. some money and angst for letting this even be possible.

[47of74]

28. I think we need a new amendment

One that bans slavery period with no exceptions. And requires companies caught doing it to be dissolved with their assets going to those they enslaved. And requires life imprisonment for people violating the amendment.

[whereisjustice]

26. Jesus, this is fucking sick. How much more of this shit has to happen before one of our two

political parties decides it is in their best interests to support US workers?

At a minimum, EFI should be banned from US Govt. supply chain.

If our justice system wasn't crooked to it's rotten core when dealing with corporations and rich people (Eric Holder's legacy) , the CEO would be charged with criminal negligence.

[SleeplessinSoCal]

29. Guy Gecht. Memorize the name.

And the company's name "Electronics for Engineering"

[C Moon]

30. Frocked up! And I'd wager this is going on elsewhere in the U.S.

[Xithras]

35. Because the story doesn't make it clear, here's how this actually happened. (and a neat twist)

EFI is a huge company in the commercial printing and reprographics industry, with dozens of offices in nations around the world. Each of those offices has local employees who are paid wages consistent with the nation they are based in. Last year, the company was moving its main headquarters, and it asked it Indian office, which already maintains most of the companies IT services remotely, to send over a group of employees to help wire in the network, move desktop computers, and otherwise migrate their infrastructure from one building to the other. Because the workers were already company employees in their Indian office, they simply received their regular paychecks. $1.21US is the regular averaged hourly pay rate for their Indian employees.

I work for a tech consulting company not far from these guys, and the case has generated quite a bit of local discussion. Multinational tech companies bringing in short term workers from their overseas office isn't uncommon, and the practice may be a bit more widespread than the DoL realizes. Even in my own company, which has offices in several foreign countries, I don't think there's been a lot of attention paid to employment law as it applies to visiting foreign employees (until now). While our lowest pay scales are well above the U.S. and California minimum wages in our foreign offices, do we need to pay workers comp and report income to the IRS every time we fly in an employee from Ireland, or China, or India, or Russia for a meeting? Until now, many people believed that the answer was no, because they employees worked and were paid by their home offices and were just here for a short visit. This EFI ruling makes it appear that the answer may actually be YES...if they are here to work, even if just for a one hour meeting at the corporate headquarters, they have to be covered and paid just like any American employee, in American dollars, by the American office.

At my company, it simply means more virtual meetings and videoconferencing.

Of course, a few pundits also asked a very different question today: Many U.S. states and cities (like New York City) charge income taxes to employees who telecommute to employers based in their cities. U.S. law ALREADY establishes that an employees physical presence is NOT needed in a jurisdiction in order for the employee to be subject to that jurisdictions laws...it's the location of the EMPLOYER that matters. Currently, many U.S. companies outsource backoffice functions to India, China, and other areas where they can be paid far less than American wages. These employees are not paid and taxed by American standards because they are not "American" employees. They are overseas workers employed and paid by overseas offices. This EFI ruling essentially says that employees who work for foreign offices MUST be paid according to American standards while they perform work for U.S. locations. While this particular ruling had to do with foreign employees who physically entered the United States to work, the question rapidly popped up as to how this might impact overseas workers who remotely maintain systems in the U.S. If someone from Bank of America's backoffice operations center in Bangalore VPN's into their New York City office and does some work on their network, are they working under Indian law, or under New York law? Should they be paid New York wages? Should Bank of America be paying them in American dollars and be withholding taxes? If U.S. law already says that a physical presence is not required, and this ruling says that foreign workers are subject to U.S. law while doing work for U.S. offices, the answer could potentially be "YES".

It's really just a theoretical "what if" at this point, but the penalty has some potential to disrupt overseas outsourcing activities. Of course, that presumes that the DoL is willing to pursue it...which, for political reasons...probably won't happen.

[Adrahil]

50. Umm...

Exporting jobs and paying foreign employees slave wages is despicable. It's that simple. Not to mention the expected work week for these guys was freaking ridiculous. It sounds like these guys were here for an extended period. While here, I wonder if they were on per idem, or if they were expected to cover their own living expenses? And yeah, I'd think we would want to discourage paying foreign workers shitty wages and no bennies and just fly em in for a few weeks when we need them. If they really needed the extra help, I'm sure the CEO could afford to give up one his millions to hire the required help.

[valerief]

66. ^^^Very Interesting^^^

[One_Life_To_Give]

77. 40K per worker would be atleast 2000hrs, or 1 years labor.

I don't think anyone really wants to step into the 1hr bushiness meeting or even the 1 week visit to another corporate facility. Working in a foreign country for 40hrs/year is quite different from working thousands of hours. Thought my foreign Visa's included a maximum amount/hours that could be worked as well as restricted what could be done.

Even the hours these people worked it would have taken 4 months to accrue 40K at minimum wage back wages.

[Xithras]

87. It's $40k total, not per person

Roughly $5000 per worker.

[appalachiablue]

78. Very disturbing. What's it take to make this known, get DOL involved?

[zentrum]

36. Sociopathic Slave Owner

....mentality. Real criminals. Evil.

[mackerel]

37. They say we have a tech shortage in this country

that's why they allow so many J1's in Silicon Valley. ha ha ha ha!

[vlyons]

38. Aren't there any criminal laws with jail time that apply?

I am appalled that no one goes to prison for this.

[Enrique]

44. the $3,500 fine is almost impossible to understand

might as well buy billboards saying "Go ahead and ignore wage laws".

[safeinOhio]

47. Ignoring wage law is a form of religious freedom.

It would be easy to prove the company worships money.

[Enthusiast]

82. True!

[grahamhgreen]

46. Corporate death penalty plus..... Jail. If the cost is wages plus $3K, they'll do it again.

[JI7]

48. CEO looks like an asshole

[Adrahil]

49. $3500 fine? Are they fucking kidding? NT

[riqster]

54. "Unintentionally"??????

My ass. Those motherfuckers.

[Heywood J]

55. It's times like this that I can't help but remember

the shirt I saw on a construction guy last year. "United, we stand. Divided, we beg."

[appalachiablue]

69. 'United we stand. Divided we beg.' Great statement. I'll remember it. Thanks.

[Sunlei]

56. is this a loophole that lets global corps import cheapest labor to work in their USA locations?

Lots of the largest Hotel corps are global.
http://www.marriott.com/hotel-search/india.hotels/

[One_Life_To_Give]

59. Should of been forced to pay Prevailing Wage.

They still got away alot cheaper than hiring local workers.

[Third Doctor]

60. This is what

Gopers want to let these companies do across the board. Their dumb assed voters refuse to see this though.

[CrispyQ]

63. Jail time for the CEO, CFO, & HR Director.

Jail time is the only thing that will stop corporate abuse. A $3,500 fine is not even a slap on the wrist.

[heaven05]

64. good ole american capitalism

at work. Not surprising at all. And they would have kept it up if not caught, somehow. I wonder how many more companies are pulling this crap. I hope someone at the Dept. of Labor asks the same question. 3500 dollar fine, 1/300th percent of the CEO's salary.

[Dopers_Greed]

70. Can't wait for the tech bubble to burst

These assholes will get their comeuppance

[pa28]

71. $3,500? That'll teach 'em.

Teach them that's it's worth trying again and who cares if they get caught.

[grahamhgreen]

84. This fine means that EVERY COPORATION will now do it. They have to. It's their fiduciary obligation.

[DebJ]

72. Without minimum wage laws that is what our minimum wage would become. n/t

[appalachiablue]

79. Exactly. THE RACE TO THE BOTTOM. $1, $2 hr. wage. Third World US.

I heard that big ship cruise lines like Carnival already pay their mostly international labor $3, $4 hr.

[Ash_F]

73. FYI - The FLSA comes with a freebie get out of jail card on the first WILLFUL offense

This means that this case does not even count because the DoL ruled it was not willful.

So the next time, hopefully, they will charge them. Since they can't say they did not know the law anymore. But no jail time for the second violation.

The third time, they can jail them under the law. IF they choose to do so.

[Enthusiast]

81. K&R! EFI was playing stupid. Obviously.

[raven mad]

85. K&R -

GO UNION!!!!!!!!!!!!!

[Alkene]

86. And that's just the time they actually got caught.

And the one that got caught. Tip of the iceberg, new normal?

[Lydia Leftcoast]

91. If corporations are "persons," then that one should get the death penalty

Not that such a thing would ever happen.

[JCMach1]

102. Why America needs the CORPORATE DEATH PENALTY

If corporations are people, punish them as such...

[mb999]

103. The government should seize the assets of this company along with the personal assets of the CEO

The wealth was illegally obtained and should be subject to confiscation, liquidated and redistributed among the workers.

[KamaAina]

107. The criminal CEO contributed to DINO Ro Khanna's campaign

The race in CA17 is between incumbent Mike Honda, from the Democratic wing of the Democratic party, and upstart district-shopper Ro Khanna, who is attracting support from repukes, who have no dog in this fight under our bizarre top-two primary system.

[AtomicKitten]

108. Their response is reminiscent of ...