Saturday, October 25, 2014

Silicon Valley company busted for paying Indian workers $1.21 an hour in America

I found this story through the Huffington Post, with this story also showing up on the Silicon Valley Business Journal, and Yahoo News.  Another source story appears to be the San Jose Mercury News.

I am going to start with the Huffington Post:
A Silicon Valley company that digitizes images said Thursday that an "administrative error" led to it paying eight workers flown in from Bangalore, India just $1.21 an hour to work 120-hour weeks installing computers in the company's headquarters.
Electronics For Imaging paid the workers $40,000 in back wages and overtime and a $3,500 fine after the U.S. Department of Labor investigated the payroll violation based on an anonymous tip, a department official told The Huffington Post.
"These folks were not only not getting time-and-a-half when working extremely long hours, they weren't making the basic minimum wage," Michael Eastwood, assistant district director for the Labor Department's San Francisco division said.
In a statement, the company said it didn't realize it was illegal to pay workers temporarily in the United States the same wages they earn in their home countries. The $1.21 was equivalent to what the employees made in Indian rupees.
“We unintentionally overlooked laws that require even foreign employees to be paid based on local U.S. standards,” the company said in a statement.
Eastwood said the company also failed to keep documentation of the hours worked by the Indian employees. Though the workers were only owed $20,000 in back pay and overtime, regulators doubled that amount to $40,000 in the settlement to compensate for damages..
The company blamed an “administrative error” and said it took steps to ensure it would not occur again.
I'll be honest, I really do not know what to say about this story, except for the extreme disgust I have for Electronics For Imaging.  Huffington Post reports that Electronics For Imaging (EFII, NASDAQ) earned a net income of $109.11 million last year, which increased from $$82.27 million in 2012.  Since January 1, 2008, the California minimum wage law has been set at $8 per hour.  Electronics For Imaging thought that they could scam the system by importing temporary workers from India, work them like dogs in a 120-hour workweek (There are 168 hours total in a week), and pay them a wage rate in rupees rather than dollars?  According to the San Jose Mercury News:
The eight employees were paid to help install the company's computer network and systems in connection with the move of the company's headquarters from Foster City to Fremont.
Investigators from the division's San Jose office learned that the technicians were flown in from the employer's office in Bangalore, India.
"This was discovered through an anonymous tip, and we need that kind of information to discover these sorts of illegal situations," (District Director of the U.S. Labor Department Wage and Hour Division in San Francisco Susana) Blanco said.
Electronics for Imaging said it brought some IT employees from India temporarily to help its local IT team with the relocation.
"During this assignment, they continued to be paid their regular pay in India, as well as a special bonus for their efforts on this project," said Beverly Rubin, vice president of HR Shared Services with Electronics for Imaging. "During this process we unintentionally overlooked laws that require even foreign employees to be paid based on local U.S. standards."
 I guess Electronics For Imaging thought they could pay their Indian workers an Indian wage rate for work here in California--even better to pay them in Indian rupees instead of dollars for working in the U.S.  Of course the exchange rate is around 61 Indian rupees for one U.S. dollar.  To install computer systems?  You mean Electronics For Imaging could not find eight American workers to help move and install their computers during their company headquarters move?  In the Silicon Valley filled with high technology workers?  Of course not.

And while we're at it, you can bet that Guy Gecht was not paid with Indian rupees for his work as Electronics For Imaging CEO:
Although it is not among Silicon Valley's high-profile companies, 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.
Electronics For Imaging thought they could scam the system for bringing Indian workers into the U.S., work them like dogs in a 120-hour work week,  and pay them $1.21 per hour in Indian rupees to perform high tech computer work that no American worker would be willing to accept in pay or working conditions.  Electronics For Imaging thought they could get away with this type of screwing workers.  Instead, they got caught and were forced to pay $40,000 back wages and a paltry $3,500 labor fine.  This is the punishment for labor violation against a company that made $109 million last year.  Do you really think this will stop Electronics For Imaging, or any other Silicon Valley high technology company, from engaging in this type of scam--or any other scam to force their workers into substandard pay or crappy working conditions?   This is just business as usual for these companies--profit over everything else!  Even the company statement shows just how cavalier Electronics For Imaging was in their atrocious behavior:
During this process we unintentionally overlooked laws that require even foreign employees to be paid based on local U.S. standards.
Am I to believe that the Human Resources department in Electronics For Imaging are so incompetently stupid that they "unintentionally overlooked" laws to pay foreign workers the U.S. and California minimum wage?

The only way to stop this type of atrocious wage theft by large companies is to either fine them in a large amount of money--in millions of dollars--or start tossing the CEO and top company officials into jail.  It starts at the top, where the one percenter "job creators" place company profit above everything else--morals, compassion, social justice, and even basic laws to keep a society functioning--such as a minimum wage law to allow workers to survive and live in a given society.  They do not really care at all--how much more money can the company take?  I checked the Electronics For Imaging website, and in their Senior Leadership Team webpage, the Vice President of Human Resources is a Jackie Cimino.  "She develops and executes on the company’s human capital strategy, overseeing all aspects of acquiring, growing, developing and retaining the high-caliber EFI team. Leading EFI’s global HR team since January 2006, Jackie is focused on delivering value to employees and managers."  Apparently this Jackie Cimino joined Electronics For Imaging in 2003, after Electronics For Imaging acquired printCafe Software, where she worked at.  She became Electronics For Imaging Vice President for HR, and has more than 30 years of human resources experience, with a focus in the area of compensation, benefits, and merger/acquisitions.  Am I to believe that this Jackie Cimino did not know that her department had "unintentionally overlooked" the state and federal labor laws for compensation?  Or that she did not bother to check if her lower-level HR executives were following the rules in bringing over these Indian workers?  This is a vice president with over 30 years of human resources experience, with expertise in employee compensation, and she did not know that Electronics For Imaging was in violation of a basic wage law?  And as this Jackie Cimino's profile is still up on the company website, she has not been fired for such a gross incompetence!  I also doubt that her pay has been penalized for the " unintentionally overlooked laws that require even foreign employees to be paid based on local U.S. standards."

Business as usual.