In 1993, Microsoft turned down nearly 50 experienced American applicants to hire a young Malaysian national with less than two years of experience to help customers troubleshoot Windows. Hewlett-Packard was found to have employed dozens of Chinese, Russian, and Indian programmers through the H-1B program at a “fraction of the cost” of an average American worker. These practices eventually attracted scrutiny even from the mainstream press, generating reports by both the New York Times and 60 Minutes outlining tech company abuse of the H-1B program to acquire cheap foreign labor to maximize profits and cut business expenses.
Unfortunately, such scrutiny did little to curb abuses of the program in subsequent decades. In 2015, Disney laid off nearly 250 American workers and replaced them with H-1B visa holders. Insult was added to injury when a number of the laid-off workers were required to train their cheaper, foreign replacements. A handful of the workers sued Disney, but ultimately lost their lawsuit two years later as Disney’s abuse was ruled legal under the statutory guidelines of the H-1B program. In 2018, the Department of Labor (DOL) found that Cloudwick Technologies in California exploited a dozen foreign workers, paying them nearly $200,000 below the required “prevailing wage” provisions. Cloudwick had promised some of its Indian workers $8,300 per month, but paid them only $800 per month.
Last year, a report by the Economic Policy Institute revealed that HCL, one of India’s largest outsourcing firms and the eighth-largest H-1B employer, exploited its own H-1B employees out of nearly $95 million. HCL has received more than 30,000 H-1B visas since 2009, facilitating the displacement of thousands of American workers to benefit large companies inside the United States. Among HCL’s many beneficiaries are Google, Boeing, and Merck.
The H-1B visa program is also tied to the recent Theranos scandal. Founded by disgraced former CEO Elizabeth Holmes, Theranos falsely claimed to have developed unique biomedical innovations regarding rapid blood-testing technology. The scam successfully hoodwinked investors out of hundreds of millions of dollars. Holmes, recently found guilty of defrauding investors and awaiting prison sentencing, employed dozens of Indians through the H-1B visa program during the apex of her company’s astounding con.
As John Carreyrou of the Wall Street Journal described in his book, Bad Blood: Secrets and Lies of a Silicon Valley Startup, Holmes relied almost exclusively on frightened foreign laborers with H-1B visas to perpetuate her grift in the final years of the company. This was in large part due to the fact that most of the American workers had either been fired or quit as they realized the extent of Holmes’ scam. The serf-like foreign workers, however, relied on employment at Theranos to remain in the United States, providing Holmes with the compliant–and cheap–workforce she needed to continue operations.
Facebook recently settled separate lawsuits from the Department of Justice (DOJ) and the Department of Labor (DOL) in the fall of 2021 over charges that the company discriminated against American workers in favor of hiring cheaper, foreign employees. This resulted in fines of $14.2 million in what the federal government deemed the “largest fine and monetary reward” recovered in the “35-year history of the INA’s anti-discrimination provision.” For perspective, the fine amounted to roughly .02 percent of Facebook’s total revenue, which at the time stood at $86 billion. For major companies like Facebook, the allure of the H-1B program’s inherently corrupt design is far more appealing than whatever minimal deterrence federal officials can impose through fines that are only collected after a long, drawn out process.
