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Comment by omegaworks | Hacker News Reader

At minimum, they should outlaw global outsourcing companies. They take an inordinate cut from the employee's paycheck for the entire employment period and provide little benefit to either the company trying to hire or the worker being hired.

They're glorified recruiters with a foothold in a buyers market, and the H1B system gives them anti-competitive leverage.

This whole system of tiered second-class employment creates a slew of perverse incentives. The whole thing should be abolished in favor of clear citizenship pathways and strict visa-blind labor rights across the board.

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Add IBM global services, Deloitte and Accentures of the world to this list. These companies are hiding while TCSs of the world receive the flak.

A large number of these staffing companies are run by American "entrepreneurs".

This. They make it easy to replace local workers as it is them who need to justify bringing the workers and the client.

Pretty sure, it would be hard for Disney to justify bringing H1s while firing locals. It is much easier for stuffing firms to justify that and then supply to Disney.

I once worked for a consulting / recruiting firm that ultimately stopped using H1 shops for talent entirely. This came after an incident involving a large cosmetics corporation on a time sensitive project where an H1 employee was ill, and so the project manager decided to go to her hotel to check on her. She found 10 people from the same H1 consultancy living in a 2 bedroom extended stay apartment. Our recruiter had no idea since we only dealt with the contract from the H1 shop. The PM fired everybody from the H1 shop and our company was blacklisted from doing business with them.

In the end, the employee receives 50% of what that cosmetics co paid to the primary vendor.

Some Indian consulting companies or (managers at these places) require their Indian H1B employees to kickback some of their official salary. Typically the kickbacks paid by the employee are in the form of donations to selected "charities" back in India. Thus, the w-2 salary of the H1B employee looks reasonable on paper.

src: employee-rights lawyer buddies who have sued companies over this.

When I was working at AT&T, there was a different kind of kickback scheme at play.

AT&T --> Primary Vendor (B) --> Another Vendor (C) --> H1B/others who work as contractors for C.

Hiring managers and C have some sort of arrangement, wherein managers get paid in cash by C. Primary Vendor (B) takes a cut for $3 per hour per candidate. Even (B) knows what is going on, but does not care as long as it is easy money.

Anyway, one such scheme got busted when I left that place. AT&T fired three employees over this--two of these employees are brothers. The gist of it was that (C) was controlled by wives of two of these employees. And that (C) was placing 90% of candidates in AT&T NJ. This had raised suspicions--and other primary vendors complained about this. So, AT&T found the conflict of interest--that (C) was controlled by wives. And one of the wives was working as a contractor for one of the brothers. Because of this, they terminated all three.

Another company I am aware of, is doing this in the bay area. Here, the primary vendor is itself controlled by a dad of one of the managers at company D. This son at D pays in cash to the prospective managers, when their candidate is picked up.

One company I worked at, had a different kind of play: primary vendor's hot recruiter was involved with one of the hiring managers. Eventually, this led to the termination of that said manager.

Lots of things go on behind the scenes.

so what's the problem of 10 people stuffing in two small room, the ill guy could recover in time, why they all get fired?

Oh, the other part of the story... so this is back in the mid to late 90s. They're ERP consultants. These guys at the time were getting billed out at ~$400 a piece to the client even if they were raw. The cut of the firm they were working for was probably in the $270 range.

Turns out the technical consultants were making $15 an hour with no per diem or benefits and their functional people were getting about $22. The company I worked for got blamed for the living conditions of the employees... but we weren't in charge of their living conditions in the first place... that was all handled by their direct employer.

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