Original URL: https://www.theregister.co.uk/2014/10/24/silicon_valley_firm_gets_slap_on_wrist_for_paying_staff_121_an_hour/

Silicon Valley scrooges paid staff $1.21 an hour in a 122-hour week

Dept of Labor fines Electronics For Imaging the max – $3.5k

By Iain Thomson in San Francisco

Posted in Business, 24th October 2014 21:26 GMT

A successful Silicon Valley firm has admitted paying staff $1.21 an hour and working them for more than 120 hours a week.

State officials got involved when an anonymous tipster alerted them to the activities of Electronics For Imaging, an international business based in the Bay Area that specializes in printing technology.

The biz had flown in eight employees from a sub-office in India for a rush job to install new computer systems in the company's Fremont headquarters last September – and their bosses forgot about US and California labor laws.

"It is unacceptable to have employees working around-the-clock, over 100 hours per week, for such substandard wages," said Susana Blanco, district director for the Wage and Hour Division in San Francisco.

"Business owners need to understand that when they bring employees here to the United States to work, they must pay them in accordance with US labor laws."

Electronics For Imaging (EFI) said that due to an "administrative error" the Indian workers were only paid their standard Indian wage, albeit with a bonus once the job was done. The minimum wage in California is $9 an hour.

Given the heavy work schedule – 122 hours in a week, we're told – it seems likely that the workers didn't get to see much of California, but on $1.21 an hour, they wouldn't have been able to afford to do much anyway.

"We unintentionally overlooked laws that require even foreign employees to be paid based on local US standards," said Beverly Rubin, veep of the company's HR Shared Services, told El Reg in a statement.

"When this was brought to our attention, we cooperated fully with the Department of Labor, and did not hesitate to correct our mistake and to make our Indian colleagues whole based on US laws, including for all overtime worked."

The firm has agreed to pay the Indian workers $20,000 – the wages they were entitled to – plus $20,000 in compensation. In addition EFI – which on Tuesday reported third-quarter revenues of $197.7m (up 11 per cent year on year) and a GAAP net income of $4.8m – was fined a whopping $3,500 for the infraction.

That's not a typo; it's the maximum the Department of Labor can levy, we're told. The company's 2013 full-year revenue was $728m (up 12 per cent year on 2012) and it banked a GAAP net income of $109.1m (up 31 per cent). Its chief exec Guy Gecht's total compensation for the year was $5,962,167.

"It's always amazing that some employers think they can go about with this kind of cheating," Sylvia Allegretto, a UC Berkeley research economist and co-chair of the university's Center on Wage and Employment Dynamics, told the San Jose Mercury News.

"These kinds of egregious wage and law violations go on every day." ®