FREMONT — Electronics for Imaging paid several employees from India as little as $1.21 an hour to help install computer systems at the company’s Fremont headquarters, federal labor officials said Wednesday.
“We are not going to tolerate this kind of behavior from employers,” said Susana Blanco, district director of the U.S. Labor Department’s wage and hour division in San Francisco.
The incident is a reminder that even amid a labor market that has boomed in recent years in Silicon Valley and other parts of the Bay Area, income inequality and payments of relatively low wages can still be a problem for workers in the region. The workers were paid in Indian rupees.
“It’s always amazing that some employers think they can go about with this kind of cheating,” said Sylvia Allegretto, a UC Berkeley research economist and co-chair of the university’s Center on Wage and Employment Dynamics.
An anonymous tip prompted the U.S. Department of Labor to investigate the case, which resulted in more than $40,000 in back wages paid to the eight employees and a fine of $3,500 for Electronics for Imaging.
“There may be good reasons to bring in foreign employees to work at tech companies, but there’s no good reason to pay them so little,” said Jon Haveman, chief economist with San Rafael-based Marin Consulting.
The eight employees were paid to help install the company’s computer network and systems in connection with the move of the company’s headquarters from Foster City to Fremont.
Some employees worked up to 122 hours a week. The unlawful employment began Sept. 8, 2013, and concluded Dec. 21, 2013.
“These kinds of egregious wage and law violations go on every day,” Allegretto said.
Investigators from the division’s San Jose office learned that the technicians were flown in from the employer’s office in Bangalore, India.
“This was discovered through an anonymous tip, and we need that kind of information to discover these sorts of illegal situations,” Blanco said.
Electronics for Imaging said it brought some IT employees from India temporarily to help its local IT team with the relocation.
“During this assignment, they continued to be paid their regular pay in India, as well as a special bonus for their efforts on this project,” said Beverly Rubin, vice president of HR Shared Services with Electronics for Imaging. “During this process we unintentionally overlooked laws that require even foreign employees to be paid based on local U.S. standards.”
The company said it cooperated fully with the U.S. Labor Department once it became aware of the problem, and paid the back wages of the employees. The company will ensure that this sort of “administrative error” won’t occur again, Rubin said.
The back wages were based on the difference between the $1.21 an hour that was paid and the California minimum wage of $8 an hour, she said. The entire $40,156 in back wages was distributed directly to the eight affected workers.
The federal agency reminded employers that even when people are brought into the United States from other countries for work, they must still be paid in accordance with the nation’s labor laws.
“There are a lot of violations like this in the restaurant industry,” Allegretto said.
The $1.21 an hour was the lowest wage paid to workers that Blanco said she was aware of in the Northern California district. In 2012, Sunnyvale-based Bloom Energy was ordered to pay back wages to 12 workers from Mexico who were being paid $2.66 an hour in Mexican pesos. The workers were repairing power generators.
“It is appalling that foreign labor is being brought in under these circumstances,” Blanco said.
Contact George Avalos at 408-859-5167. Follow him at Twitter.com/georgeavalos.
