Public Employee Press

Immigration reform: the time is now
DC 37 exposes contractors' visa fraud

By GREGORY N. HEIRES

Working to stop the Bloomberg administration from replacing unionized municipal workers with foreign workers, DC 37 has uncovered millions of dollars' worth of fraud and abuse, resulting in significant fines and fees for the outside contractors who hired the workers under H-1B visas.

As part of its effort to reduce the city's use of foreign professional workers, the union expects to offer training opportunities to members under grants from the U.S. Dept. of Labor. Funds for the training programs will come partly from the fines that resulted from DC 37 complaints about the contractors' employment violations.

"We are looking to put the brakes on the city's growing reliance on foreign workers," DC 37 Associate Director Henry Garrido said. Based on research he coordinated, the union has reported massive alleged violations of visa regulations to the Labor Dept. "We want to help our members upgrade their skills so the city can't claim it needs to look outside the country for qualified workers," he said.

Between 2008 and 2012, H-1B visa holders displaced 2,000 DC 37 members in several job titles after their work was contracted out to private companies, DC 37 Executive Director Lillian Roberts informed Associate Deputy Labor Secretary Laura McClintock in an Aug. 28, 2012, letter.

In many cases, the city employees were ordered to train their H-1B replacements. In a union survey, three-quarters of the displaced employees reported that they could not find another job and were forced to go on unemployment insurance; one year later, half of them were still receiving the out-of-work benefits.

Companies failed to pay prevailing wages

DC 37 filed an official complaint about the contracting out with the Wage and Hour Division of the Labor Dept., which found the companies guilty of violating H-1B regulations by failing to pay the prevailing wage to the foreign workers and to notify the union prior to placement in city agencies. Under a local law and union's collective bargaining agreement, the city is supposed to notify the union when contracting out may displace city employees.

"A lot of data-processing people on H-1B visas disappeared after we filed the complaints," Garrido said. "Some went back to India and Pakistan, and a number of the contractors were fined for violations."

All told, the DOL collected $268 million in fees and fines related to companies that use worker with H-1B visas, Garrido said. The DC 37 complaints helped uncover the scandal involving the CityTime automated payroll project and other contracting abuses in city agencies. The DOL found widespread fraud, with shell companies stealing millions of dollars of public funds.

The abuse was so extensive that the DOL turned the case over to federal prosecutors, who filed wire fraud, conspiracy and money-laundering charges against the CityTime project manager, Science Applications International Corp. The CityTime scandal involved hundreds of millions of dollars in fraud and led to the indictment of a dozen individuals.

Union worker displacement charge dismissed

Unfortunately, the DOL dismissed DC 37's worker displacement claim against the city, ruling that the city was not the employer, according to a report by the DC 37's parent union, the American Federation of State, County and Municipal Employees. DC 37 then filed separate complaints against the companies with the largest contracts at DOL offices in the states where the companies were based: California, New Jersey, Massachusetts and New York.

The Labor Dept. forced some contractors to repay thousands of dollars in back wages to their H-1B workers, cited companies for not notifying the union that their contracts could lead to the displacement of city workers, and fined the companies.

AFSCME has worked closely with DC 37 on the H-1B issue, helping with the complaints and pressing for restrictions on H-1B visas as the Obama administration deals with immigration reform.

AFSCME supports a path to citizenship for the 11 million undocumented workers in the United States. But it opposes the expansion of temporary visa programs for professional employees. The union believes the government should only issue visas for temporary foreign workers based on objective analysis of labor market needs by an independent agency rather than on the basis of employer claims about a lack of qualified U.S. workers.

The AFSCME model for rules concerning professional immigrant workers basically mirrors the W Visa program agreed to recently by the AFL-CIO and U.S. Chamber of Commerce for low-wage workers. That program would use labor market evaluations and allow foreign workers to switch employers, which they can't do now. Critics charge that this restriction leads to exploitation of the immigrant workers. Meanwhile, Garrido is working with the DC 37 Education Fund to develop the training courses with funding from the Labor Dept. The training will be open to Engineers, Nurses and information technology workers. DC 37 expects to apply for the DOL grant by September.

"This is the way to go," said Robert Ajaye, president of Electronic Data Processing Personnel Local 2627. "If we upgrade our skills, the city will have no justification for contracting out our work."