Indentured Servitude Makes A Comeback In America

In the early colonial days of America, business owners in search of free workers would enter into contracts with young foreign workers known as indenture documents under which the business owner would pay for a worker's travel expense to the U.S. and provide them a job that included their room and board, food and clothing but paid no wages. The worker agreed to work for the employer for a minimum period of time to pay off his debt for the travel and other expenses incurred by the employer, a form of bondage debt. Indenture documents severely restricted what an immigrant worker was free to do, and courts in the colonies strictly enforced their contractual obligations on behalf of the business owners. Once the worker had worked the minimum specified period and paid off his debt to the business owner, he would become a free person who could work for whomever he wished or start his own business. The practice of indentured servitude, like its ugly kin, slavery, eventually became illegal in America.

Shockingly, a different form of indentured servitude has arisen in America under the auspices of the H-1B non-immigrant visa program, which allows American employers to bring highly-skilled foreign workers to the U.S. to fill jobs for which there are a shortage of available American workers. The sponsor of H-1B workers responsible for this form of indentured servitude are staffing companies that utilize the H-1B program to bring foreign workers to the U.S. on speculation that they will be able to outsource them to employers in need of their services. To sponsor an H-1B worker, the employer must represent under penalties of perjury to the U.S. Department of Labor and USCIS that it has an immediate full-time opening for the sponsored worker at a particular work site that will pay the worker the prevailing wage rate earned by American workers with similar skills and education for a minimum period of non-permanent employment. Sponsors are required to place their H-1B workers in paid positions as soon as they make themselves available to work and are not allowed to bench the workers without pay. If the employer no longer can offer the employee the promised position, it must release the employee to work for another H-1B employer or pay the return travel costs of the non-immigrant worker to his or native country. The H-1B program fills an important role in helping American employer's ensure that it has the skilled workers it needs to operate their businesses in this country; however, like all good things, it has been subject to abuse.

In recent years, staffing companies have been increasingly stepping into the shoes of the employer and sponsoring H-1B workers on behalf of businesses who require their services. The filing and legal fees to sponsor an H-1B worker can run into the thousands of dollars. Staffing companies are subject to the same regulations as any other employer, but what we're seeing is that many staffing companies have flagrantly ignored the rules and, in the process, severely disadvantaged and harmed the H-1B workers who participate in the program. To obtain sponsorship, staffing companies sometimes make the employees sign contracts and promissory notes agreeing that in consideration for obtaining an H-1B visa for the foreign worker, the employee must agree to work for the employer for a minimum period of years or pay predetermined liquidated damages of $15,000 to $20,000 to the staffing company to be released from their contract. Federal law bars H-1B employers from imposing fines on their workers if they leave their employment before a specified period of time; however, it allows employers by contract to recoup out-of-pocket expenses it incurs under state contract law so long as the employee is not required to pay the fees and costs associated with the issuance of their H-1B visa.

What foreign workers are increasingly finding when they arrive in American on their H-1B visa is that the job promised to them when they entered into the contract with the staffing company which sponsored them does not exist. While they are typically furnished housing, they are idled without pay, sometimes for months at a time, while they await a job opening the staffing company finds for them. Once the staffing company finds work, they sometimes are assigned to jobs that pay less than the promised full-time job earning the prevailing wage rate for short durations. The staffing company expects them to continuously relocate to new job openings during the duration of their employment, often accompanied by interrupted periods without pay. If the worker quits his employment before the contract terminates, the employer threatens to sue him or her for the liquidated damages provided under their contract and to cancel their H-1B visa that allows them to remain legally in the U.S.

WRTV Call 6 investigative reporter Kara Kenney helps shed light on a staffing company here in Indianapolis that has been accused by its former H-1B employees and their attorneys of exploiting them in a story titled, "Lawsuit: Indianapolis staffing company abused foreign workers, violated federal labor laws." I have personally represented several former employees of the company who are among dozens of former employees who have been sued in the local courts in Indianapolis for breaching their contracts with the employer, and I was interviewed by Kenney for her story that aired tonight. One former employee of the company has filed a lawsuit alleging fraud and RICO violations against its H-1B employees, which seeks class action certification. In 2010, a U.S. Department of Labor investigator determined that the company had violated numerous H-1B rules, including failure to pay the prevailing wage rate and benching workers without pay, against dozens of former employees. The Department ordered the company to pay back wages of more than $1 million and assessed a fine of more than $200,000 for the violations. Here's an excerpt from Kenney's report:

Indianapolis staffing company Access Therapies is facing a federal lawsuit accusing them of abusing legal foreign workers and violating federal labor laws.

The lawsuit, filed by former Access Therapies worker Rituraj Singh Panwar, also lists manager Ramon Villegas and affiliates RN Staff Inc., Rehability Care as defendants.

According to its website, Access Therapies provides health care staffing to hospitals, schools and other facilities using H-1B visa sponsorships to hire workers from India, the Philippines and other foreign countries.

American companies are supposed to use those visas to bring in skilled foreign labor when they can’t find Americans to do the work.

According to the federal lawsuit, Access Therapies does not pay its employees prevailing wages as required by law.

Panwar’s attorneys allege Access Therapies engaged in a “fraudulent enterprise” and violated federal anti-trafficking and forced labor laws as well as Indiana’s state wage laws.

“It’s an abuse of the employee as well as an abuse of the entire system,” said Vonda Vandaveer, one of the attorneys for Panwar.

Attorneys for Panwar are seeking a class action lawsuit, and say about 100 workers could be impacted.

Panwar’s attorneys claim Access Therapies frequently does not have work for its employees despite the visas, which they say is hurting the American economy.

“We don’t want people to come over here to the country and sit and be idle and not be working jobs and be controlled by an employer located in the United States and for that employer to profit on that scenario,” said Michael Brown, one of Panwar’s attorneys, who represents visa workers. “Mr. Panwar alleges specifically in his complaint he was not paid during his wait time when he was available to work and willing to work in the U.S.”

Vandaveer explained the H-1B visas are most often used by the IT and health care industries.

“There’s a limit on the number of visas issued each year,” said Vandaveer. “So this employer who said they have a job for this employee, in fact, does not have a job available and has used up one of the precious visas for a position that didn’t exist.”

Indianapolis attorney Gary Welsh represents several foreign workers who are being sued by Access Therapies for breach of contract.

“It’s very troubling,” said Welsh. “It’s been an emotional and financial burden on them.”

The Call 6 Investigators examined court records and found dozens of pending cases in Marion County in which Access Therapies is listed as the plaintiff.

“The exploitation of these foreign workers amounts to a modern day version of indentured servitude,” said Welsh.

The Call 6 Investigators stopped by Access Therapies office on West 71st Street.

Manager Ramon Villegas, who is named in the federal lawsuit, told RTV6 the allegations are not true and deferred to the company’s attorney.

Attorney Bryce Bennett Jr., confirmed via email his clients would not be responding to RTV6 for comment.

A 2010 letter from the U.S. Department of Labor to Access Therapies said the company failed to pay wages as required and cooperate with their investigation.

“Your firm owes back wages in the amount of $1,012,306.08 to fifty-three H-1B nonimmigrants,” read the letter. “Your firm is liable for any ongoing violations.”

When the Call 6 Investigators asked about the status of the case, a Department of Labor spokesperson said the agency would not comment on ongoing investigations.

The company has exercised its right to appeal the 2010 U.S. Department of Labor ruling against it, which I understand is still pending. Despite the 2010 finding against the company by the Department, the company and one of its affiliated companies have been permitted to continue to sponsor hundreds of foreign workers for H-1B visas over the past several years. In my work in defending these cases, I've discovered that many of the lawsuits brought against other former employees in the Marion Superior Court were won by the employer through default judgments in abstentia that order the former employees to pay tens of thousands of dollars to their former employer for breaching their contract. The former workers, who move to other jobs throughout the country after leaving their employment, later learn that their credit rating has been harmed by the judgment when seeking loans to pay for cars, homes or pay other debt they incur and must either choose to satisfy the judgment or try in vein to get the default judgment set aside. If they have notice of the lawsuit, they may choose to ignore it because they are living hundreds of miles away in another state and don't want to retun to Indianapolis where all the cases are filed under a choice of law provision included in all the contracts. Marion Superior Court judges have been reluctant to set aside default judgments they've entered against the company's former employees. These workers need to understand their rights and obtain the assistance of legal counsel to ensure that they are not taken advantage of in this fashion to avoid costly legal consequences. Under Indiana law, if the employer has failed to pay wages due to them, the employer can be liable for those unpaid wages, plus liquidated damages equal to double the amount of their unpaid wages and be ordered to pay the employee's legal fees.