US IT firm paid Indian staff just over a dollar per hour

US IT company ordered to pay additional wages to staff from India who worked up to 122 hours a week for as little as $1.21 an hour

A US IT company has been fined and ordered to pay additional wages to staff from India who were made to work up to 122 hours a week for as little as $1.21 an hour.

The company blamed an administrative error for the underpayments.

Following an anonymous tip-off, Electronics for Imaging, based in Silicon Valley, was ordered to pay $40,156 to the eight workers who were installing network and systems when the company moved its head office. The company was also fined $3,500.

The workers were already working for Electronics for Imaging in India, but when they came to the US the company continued to pay them Indian wages rather than adjusting them to US levels.

Rules in the US and UK mean businesses bringing staff onshore from low-cost regions must pay staff the same wage as onshore workers.

According to a report in The San Jose Mercury News, Susana Blanco, district director of the US Labour Department's wage and hour division, said: “We are not going to tolerate this kind of behavior from employers.”

The report said the company cooperated fully with the US Labour Department when it became aware of the problem and paid the wages back to the employees. Electronics for Imaging blamed an "administrative error” for the underpayment.

Governments are coming under pressure to crack down on businesses paying offshore staff to complete jobs onshore, when there are workers available with the same skills in the UK.

Indian IT services supplier Infosys has agreed to pay $35m to settle a visa dispute with US authorities in October 2013.

In the UK, Intra Company Transfer (ICT) rules allow offshore companies, with a UK office, to bring offshore staff into the country. This is used as a loophole by suppliers wanting to bring staff in without going through strict visa requirements. But these workers must be paid the local rate to ensure UK workers can compete for jobs.

A recent UK High Court case raised new questions over multinational companies' use of intra-company transfers (ICTs) to bring staff from India to the UK.

In the case, defendant Prashant Sengar had a copy of an employee database for Tata Consultancy Services (TCS), which he claimed proved TCS broke immigration rules, by having Indian staff do jobs which can be filled using local residents. TCS denies this and claimed Sengar tried to blackmail the company with the database, which was leaked by a TCS employee.

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