A Silicon Valley company is paying more than $43,000 in back wages and penalties after labor regulators found eight employees brought from India were grossly underpaid and overworked while assigned to a special project in the U.S.
The probe announced this week by the U.S Department of Labor uncovered several egregious violations at Electronics for Imaging Inc., a printing technology specialist that generated revenue of $728 million last year, when the misconduct occurred.
Among other things, Electronics for Imaging paid the eight workers far below California's required minimum wage—$8 per hour at the time—while they helped the company move its headquarters from Foster City, California, to Fremont, California, during a three-month period, according to the Labor Department.
While assigned to the project, some of the Indian workers logged as many as 122 hours in a week without being paid overtime. As result, they received as little as $1.21 per hour.
(Score: 2) by Sir Garlon on Friday October 24 2014, @01:46PM
The workers in this case were not skilled tech workers, according to TFA. It is not clear what they did, but most likely they were movers or other laborers.
It is cold comfort to realize there are people who get exploited even worse than H-1B tech workers.
$43,000 is chump change to a company with $109 million in annual profits. Given that all the company had to paid was back wages and $3250 in fines, I would not be surprised to see this become a routine business practice. It's probably a lot cheaper to pay the fines than to pay even unskilled laborers the market rate.
[Sir Garlon] is the marvellest knight that is now living, for he destroyeth many good knights, for he goeth invisible.
(Score: 2) by Thexalon on Friday October 24 2014, @01:55PM
Especially when it's unlikely you'll get caught. There's a very good chance that the workers in question have now been blacklisted (under the assumption that one of them squealed) and will never be hired again by an outsourcing firm, which will effectively intimidate the next round of workers.
The only thing that stops a bad guy with a compiler is a good guy with a compiler.
(Score: 0) by Anonymous Coward on Friday October 24 2014, @03:22PM
A $235M fine would be about right in this case.
If I got it right, thats about 5375$ per employee they stole. 5375$ for an employee earning minimum wage (which they didn't) amounts to about 5375/16640 or 32.3% of their yearly income. (rough calculation of 52 weeks of 40 hours)
So the correct fine would be something like 728000000 * 0.323 or $235M fine for the company. That's a fine that will come close to the damage they caused onto those employees. And since they made less than minimum wage, it's probably a lot more.
(Score: 0) by Anonymous Coward on Friday October 24 2014, @04:31PM
So how did you get the position of the dollar sign correct in the first sentence, then mess it up twice in the very next sentence?
(Score: 3, Funny) by Lagg on Friday October 24 2014, @09:19PM
Because if he were to suffix "235M" with $ it would look like 235M$ and he'd be sued by Microsoft for trademark violation or infected with Multiple Sclerosis. Or both. I don't know why you have to ask such obvious questions AC.
http://lagg.me [lagg.me] 🗿
(Score: 2) by Gaaark on Friday October 24 2014, @09:29PM
With the way the patent system (was/is?) working, Microsoft probably has a patent on
"putting an 'M' and a '$' together "using a computer"
patent pending the mess that is the patent office.
--- Please remind me if I haven't been civil to you: I'm channeling MDC. ---Gaaark 2.0 ---
(Score: 2) by FakeBeldin on Saturday October 25 2014, @07:48PM
From the fine article:
Electronics for Imaging is paying more than $40,000 in back wages and damages to the eight Indian workers and a $3,520 fine.
So they are indeed receiving about $5,000 per person. The fine seems rather low to me - not much of an incentive not to try such shenanigans again.
(Score: 2) by M. Baranczak on Friday October 24 2014, @02:55PM
If an employee gets caught stealing from the company, the employee goes to jail. If the company gets caught stealing from the employee, they pay back the stolen amount, plus a token fine, and that's the end of it.
(Score: 2) by snick on Friday October 24 2014, @03:24PM
$43K for 8 employees????
More like "If the company gets caught stealing from the employee, they pay back a portion of the stolen amount, and laugh over it when cocktail hour rolls around."
(Score: 2) by bob_super on Friday October 24 2014, @03:47PM
The lawyers cost them a whole lot more than the fine.
(Score: 2) by pnkwarhall on Friday October 24 2014, @04:41PM
The lawyers cost them a whole lot more than the fine.
This is a complete red-herring for more than one reason, and makes you seem like a corporate-abuse apologist.
1) A company with $728 million/revenues almost certainly has lawyers on retainer, or more likely, on salary. Law-related fees are a cost-of-business for almost any business; in contrast, lawyer fees tend to be a heavy burden for individuals.
2) In a discussion about "money crime" (businesses making money via illegal practices) it's not relevant to mention the cost of defending the business's actions in court.
3) We're talking about a situation where a company got into the illegal situation in the first place w/ what is, in the US, widely criticized as unethical profit-oriented behavior -- importing foreign labor. The costs of defending your unethical business practices in court, again, isn't a financial penalty for law-breaking -- it's an **expected** cost-of-business for a certain type of business behavior.
The controversy here is about companies screwing over individuals for minor financial gains, and paying a negligible explicit penalty for their actions -- and you want to bring up lawyer fees?
You must be a lawyer, or you play one on tv.
Lift Yr Skinny Fists Like Antennas to Heaven
(Score: 2) by bob_super on Friday October 24 2014, @04:55PM
Or maybe I'm just pointing out how ridiculously low the fine was compared to the case severity and defendant.
Should I have pointed out that the fee is roughly equivalent to the cost of one year in jail, which is a tenth of what you get for a few grams of pot?
Note in passing that even with a salaried lawyer, the cost logic applies. Lawyers are not paid by companies to idle around. If you keep them too busy because of your illegal actions, you're gonna need more lawyer-hours, which will quickly cost you more than this ridiculous fine. Amusingly, their own lawyer may turn out to be a better deterrent for the company than the official penalty.
(Score: 2) by pnkwarhall on Friday October 24 2014, @07:59PM
I appreciate your observation about the contrast between penalty fees and lawyer fees, and it makes me regret the tone of my original reply.
Lift Yr Skinny Fists Like Antennas to Heaven
(Score: 0) by Anonymous Coward on Saturday October 25 2014, @02:11AM
Holy crap, this small thread needs to be broadcast around the web. Civil discourse is possible. There is hope!
Though the fact that it turned out they agreed might be more important.
(Score: 2) by rts008 on Friday October 24 2014, @03:36PM
Wage theft by employers amounts to more than all other forms of property theft combined in the USA.
Funny why that is not the news headlines every day here. The power of money in politics is out of control.
http://wolf-pac.com/ [wolf-pac.com] proposes a potential fix to this.
(Score: 2) by mhajicek on Friday October 24 2014, @04:48PM
Indeed. I have a judgment against a previous employer for about $26k in back wages. I've managed to collect about $3k of it over three years.
The spacelike surfaces of time foliations can have a cusp at the surface of discontinuity. - P. Hajicek
(Score: 2) by bzipitidoo on Friday October 24 2014, @05:24PM
Hear, hear. 3 former employers owe me money that I will never see. They were all startups that failed. When the funds ran out, they did the all too common thing of not telling the employees they couldn't make payroll at the end of the month. They were dreaming that sales would suddenly take off, and then they could magically meet payroll. Of course it didn't happen. Can't get money from a bankrupt company. They had the nerve to ask everyone to keep working, for free, in hopes that a little more time would see a change in fortunes. Didn't even offer stock or options, not that I wanted such worthless paper anyway. In one case, I told the boss I can't pay rent on nothing. I felt like adding that if he could persuade the landlord to let me stay in my apartment rent free, and cover all my utility bills, and persuade a grocery store to give me free food, and provide a little extra to cover basic clothing and gas and automobile maintenance so I can commute to work, then I'd be happy to stay on and work for free.
I am so sick of startup bull. They get soo many protections, to help them out because everyone knows startups are risky. I think their protections should end where employees get hurt. What should we do, demand an escrow system for pay? Have the employers put the pay in escrow at the start of the pay period, if they can? If they can't, then the employee knows it's time to walk. Or maybe cut the pay period down to a week, so employees lose only one week of pay instead of an entire month? Hold management personally responsible for lying and cheating, strip away their corporate immunity?
(Score: 1) by Whoever on Friday October 24 2014, @06:34PM
In the UK, operating a company like this (operating a company while it is insolvent) is taken seriously. It's a political problem -- it needs political will pass laws to hold individuals accountable for their actions.
(Score: 2) by Thexalon on Friday October 24 2014, @08:31PM
What jurisdiction do you live in? In my state, not only are they required to run payroll at least twice a month, and some really nasty stuff can start to happening if back wages are not paid after 30 days overdue. And in the case of bankruptcy, unpaid wages are the first expense that is paid out of the remaining assets (including steps like selling off any computers the startup owns). And no, my state is not in some sort of hotbed of liberalism.
The reason I know this is that I found myself in a similar bit different situation earlier in my career - I could tell that the startup I was working for was imploding, so I was far along on finding another job when management told the team what I already knew (I had done my best to warn coworkers that this was likely coming, but some were genuinely surprised). So I looked up my legal rights on the matter, sent an appropriately threatening letter, stopped showing up for work (I'm a professional - if you don't pay me, I don't work), and enjoyed a nice 3 week vacation before my next job started. And yes, I got paid, just before the deadline ran out that would have allowed me to file an unpaid wages claim.
So yeah, if you're going to work for a startup, follow these rules:
1. Never, ever, work for free.
2. Be ready to jump ship at any time.
3. Know your legal rights if it doesn't work out (which will happen roughly 99.9% of the time).
4. Have some savings to fall back on to make those rent payments while you're sorting out the legal stuff.
The only thing that stops a bad guy with a compiler is a good guy with a compiler.
(Score: 2) by bzipitidoo on Saturday October 25 2014, @02:08PM
If you are collecting wages, yes, you have much more protection. But I was a contractor. 1099. It's a common trick to dodge around the actually fairly tough wage laws. Call you an independent business that they are buying services from, instead of an employee that they are paying for work. Also, I'm in a so-called "right to work" state. Maybe I shouldn't have accepted that, should have demanded a W2? Then I wouldn't have had those jobs at all. Maybe I should have worked elsewhere? Well, it's not like I've ever had a choice of jobs, it's always been "take it or leave it", take it or turn it down and go back to hunting for other openings. As to being aware of the situation, I was not surprised. I knew that business was not going well before they failed to pay everyone, but taking my chances there, as bad as it looked, still seemed better than walking out and being unemployed sooner. If I had another job to go to, then yes, I would have moved on before being cheated of my pay.
I know firsthand that the so-called talent shortage in technology is a big lie. We have all suspected as much. If there was really a shortage, I should have had several job offers to choose from, and it should not be necessary to jump through the largely pointless hoops of the typical lengthy job interview to get one offer, maybe.
(Score: 0) by Anonymous Coward on Sunday October 26 2014, @04:42AM
...for being exploited by an employer.
You will NEVER, EVER be paid what you are TRULY worth out of someone else's pocket/wallet/purse/bank or e-payment account....