The Department of Labor entered into a consent decree announced last week with Peri Software to pay $765,000 in back wages and damages and to be debared from the H-1B program for one year.  Department of Labor alleged that Peri Software owed back wages to 163 workers for various violations including paying less than the prevailing wage.  The $127,000 in civil penalties was for failing to post labor condition applications at the worksites where the company's H-1B workers actually worked.

It is notable that the Silicon Valley is packed with H-1B workers serving as IT and business consultants who more often work at client company worksites than their employer's offices.  In the vast majority of cases the actual employer that administers payroll and filed the H-1B petition never posts a labor condition application at the client company's offices where the H-1B worker actually sits and works.  There are obvious business reasons for the employers' reluctance including the embarrassment of having to ask the client company to post a notice at their worksite informing their employees of the presence of contract workers, where they came from and their salary (or salary range).

Nancy J. Leppink, Deputy Administrator of the Department of Labor's Wage and Hour Division said,

When companies participating in the H-1B program do not post filed labor condition applications, they clearly undercut American workers who may be qualified for available employment but aren't aware of it.

Peri Software in one way or another eliminated most of its H-1B workforce and now has only 30 employees in H-1B status out of a total US workforce of 300.  Part of Peri's settlement was to try to use US workers instead of H-1B workers whenever possible.  George McQuade, a spokesperson for Peri Software, noted in a response to questions from Computerworld that hiring US workers helped the company reflect "local demographics" which "improves our business as we foster better relationships with clients.  The service is better due to cultural similarities."

While we applaud Peri Software's use of US workers when skilled US workers are available, the mention of "cultural similarities" is disturbing as it suggests that Peri Software may be considering factors like ethnicity, physical appearance, accents and other "cultural" factors in screening workers for hiring.  Because many permanent residents and US citizens have some "cultural" dissimilarities, it would be interesting to ask Peri Software if they would refuse employment to permanent residents or US citizens who "looked" culturally dissimilar to the "local demographic" or had accents, a manner of dress, a religion or other characteristics that were inconsistent with the local demographic.  It seems like Peri Software might be inviting a discrimination suit under the Civil Rights Acts, Title VII, or INA 274B if it considers cultural factors when hiring as the "local demographic" most certainly includes factors like race, color, religion and national origin.