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Silicon Valley Company Paid Temp Workers $1.21 an Hour: DOL

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By Mark Wilson, Esq. on October 24, 2014 9:45 AM

The U.S. Department of Labor has settled allegations that a Silicon Valley company, Electronics for Imaging, paid temp workers from India as little as $1.21 an hour to install networking infrastructure at its new headquarters in Fremont, California.

EFI, which makes digital printing software and hardware, apparently flew network technicians from Bangalore, India, to the San Francisco Bay Area in late 2013, working them as many as 122 hours a week and paying them in Indian rupees.

A Big Overlook

EFI, which said it "unintentionally overlooked" the employees' pay and work hours, ended up paying more than $43,000 in back wages to eight employees.

Just because a company brings in contract workers from another country doesn't mean that the workers don't have to be paid minimum wage. It's unclear how EFI "unintentionally overlooked" such a huge wage disparity. The Department of Labor is clear that temporary foreign professional workers must be paid "the higher of the prevailing wage (average wage paid to similarly employed workers in the occupation in the area of employment) or the actual wage paid by the firm to workers with similar skills and qualifications."

In Fremont, the median annual salary for an entry-level network engineer is almost $72,000, according to Salary.com. That's about $34 an hour.

Wage and Hour Suits Are Only Going Up

Wage-and-hour compliance is on the rise, and has been for over a year. In May, Inside Counsel reported that the Department of Labor filed a record number of wage and hour lawsuits in 2013-14, almost a 5 percent increase over the previous year.

In-house attorneys are the first line of defense against wage and hour violations, and the most high-profile -- and expensive -- are employee misclassification claims. FedEx, especially, has lost case after case in federal courts regarding the classification of its delivery drivers. Just this week, NBCUniversal agreed to a proposed $6 million settlement for using unpaid interns to perform substantive work. If you think you can get away with it, you won't. If you're not sure what's going on, it's time for an audit.

But back to EFI: Underpayment is a case that can be headed off right away. There's no arguable questions of law about how much an employee should be paid, and whether that employee has been paid. There are records; you can look it up. Unless there's a genuine paperwork mistake, some prospective diligence can head off a claim that you "unintentionally overlooked" paying someone.

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