April 06, 2009, 9:09 AM — IT services provider Cognizant Technology Solutions Corp. has agreed to pay $509,607 in back wages to 67 H-1B workers after an investigation by the U.S. Department of Labor.
Teaneck, N.J.-based Cognizant is one of the largest H-1B users, having received approval for 467 visas during the federal government's current fiscal year. That put Cognizant, which has more than 60,000 employees worldwide, in seventh place on the list of H-1B recipients for fiscal 2008.
The Labor Department, in a statement released this week, said that the company had violated federal law by failing to pay "proper wages" to H-1B tech workers. Cognizant also "failed to offer all H-1B workers equal benefits or eligibility for equal benefits, and failed to maintain required records," the agency said.
A Cognizant spokesman said that the company isn't commenting on the settlement.
The deal with Cognizant is far from the largest that the Labor Department has reached with an IT services firm over H-1B payments. Two years ago, Mumbai, India-based Patni Computer Systems Inc. agreed to pay $2.4 million in back wages to 607 visa holders. And in 2005, Southfield, Mich.-based Computech Corp. said it would pay $2.65 million in back wages and fines to settle a complaint that it had underpaid 232 H-1B workers.
H-1B critics have long contended that employers are using the visa program to undercut the salaries of U.S. workers. For instance, a study released in early 2006 by the Washington-based Center for Immigration Studies claimed that IT workers with H-1B visas were earning $13,000 less on average than their American counterparts were. And two months ago, federal, state and local enforcement officials arrested 11 people in six states as part of a crackdown on alleged violations of H-1B prevailing wage laws.
In addition, unpaid back wages aren't the only issue facing the H-1B program. A study by the U.S. Citizenship and Immigration Services that was released last fall by U.S. Sen. Chuck Grassley (R-Iowa) found evidence of widespread fraud in H-1B applications, including the use of forged documents and fake degrees.
Grassley and Sen. Dick Durbin (D-Ill.) said this week that they plan to reintroduce legislation that would require employers to make a "good faith" effort to hire U.S. citizens over H-1B visa holders, after failing to win approval for a similar bill two years ago. That follows a successful effort by Grassley and Sen. Bernie Sanders (I-Vt.) to include H-1B hiring restrictions on financial services firms that receive federal bailout money in the economic stimulus bill signed into law by President Barack Obama.
But the Obama administration defended the H-1B program in a court filing made last month in response to a lawsuit seeking to overturn an extension of the time that foreigners can work in the U.S. on student visas. The inability of employers to obtain H-1B visas has hurt their ability "to recruit and retain skilled workers and [is creating] a competitive disadvantage for U.S. companies," the filing said.