Firm illegally underpaid its H-1B workers

Federal officials said a Newark company violated the H-1B program by paying several of its employees far below the federally required salaries and had to pay 12 of its workers a total of $173,044 following an investigation by the Department of Labor.

Cloudwick Technologies, a business services company, paid several employees well below the wage levels required by the H-1B program and made illegal deductions from workers’ salaries, the department said Tuesday. The department also said the company brought employees from India with promised salaries of $8,300 a month — but instead gave them as little at $800 a month, the department said.

In an interview with The Chronicle, Cloudwick CEO Maninder Chhabra admitted the violations, saying his firm deducted pay from four employees between

2016 and 2017 who were not “able to get their skill sets up to the mark” after completing a company training program.

According to Chhabra, the company pays employees a stipend of $800 to $1,000 a month during the program, which lasts several months. After they complete the program, employees are paid an average starting salary of $90,000 to $100,000 a year, he said.

Chhabra said that, at the time, the company did not know that they were not allowed to deduct wages under the H-1B program. The visa program allows companies to sponsor foreign employees to work in the United States for a period of time. H-1B holders are heavily concentrated in the Bay Area, where major tech companies often use the visa to fill technology positions.

“We did make a mistake. We’re not saying that we didn’t do that,” Chhabra said. “But most of these things are compliance issues that we fixed.”

He added that the company has “never” brought an employee directly from India, but instead recruits people from U.S. universities. Many of those recruits tend to be Indian, he said.

“We focus on emerging technologies, and we are never able to find a resource who is willing to go into our program who is a U.S.” citizen, Chhabra said. The company has about 90 employees, he said.

Following the investigation, officials found that several other employees were being underpaid based on their skill sets. The department then ordered the company to increase the wages of those employees.

President Trump has vowed to crack down on the H-1B program, which critics say is often abused. Last year, Trump signed an executive order called “Buy American, Hire American,” that pledged to review the existing program.

“The resolution of this case demonstrates our commitment to safeguard American jobs, level the playing field for law-abiding employers, and protect guest workers from being paid less than they are legally owed,” Susana Blanco, Wage and Hour Division district director in San Francisco, said in a statement.

Besides the recovery of back wages, the company also signed an “enhanced compliance agreement” that requires it to hire an independent monitor.