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

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. …

  1. Anonymous Coward
    Holmes

    $3,500 fine?

    So if I am reading this story correctly, Electronics for Imaging paid out $40K in back-wages and overtime to these Indian employees, and then paid a $3,500 fine--the maximum fine allowable.

    So the math works out that a company in a similar situation should commit the same crime, as long as they think there's a less than 92% chance they will get caught.

    (Sherlock, because he probably wouldn't approve. Then again he was a Victorian, so maybe he would would approve)

    1. Mark 85 Silver badge

      Re: $3,500 fine?

      Exactly. The less the company pays the labor, the more the execs can take home and the more the stock market loves the execs and company which translates to more money for the execs with stock options.

      I find it very suspect that they "overlooked" the labor law since they flew in the employees from India office rather than having the local office employees do the work or even contracting out the work.

      1. Anonymous Coward
        Anonymous Coward

        Re: $3,500 fine?

        Well, they "unintentionally" overlooked it. So, don't forget that word in a California murder trial. O.J. Simpson has other tips.

      2. Anonymous Coward
        Facepalm

        Re: $3,500 fine?

        @Mark 85

        This is what I love about The Register--you learn something new each day. For example, when I woke up this morning I had no idea that "overlooked" and "disregarded" were synonyms!!

        1. Mark 85 Silver badge

          Re: $3,500 fine?

          Yep... the article said "overlooked"... maybe we should add that to our list of buzzwords for starting a company? Fits in with "return shareholder value" and "enhance profit".

      3. elDog

        Re: $3,500 fine?

        And don't forget that those "execs" will have moved on to some ethereal investor-stealing enterprise within a day or so.

        There is no sense of long-term profit and long-term investment among thieves. Only when real investors (I mean people that are putting up their homes/kids education/etc as collateral) start demanding proof of executive idemnity will this stuff stop happening.

        The major investment arms (CALPRS, UBS, etc.) have no real skin in the game. Their execs are making +1M and it doesn't matter if their investments are pure crap.

    2. jonathanb Silver badge

      Re: $3,500 fine?

      $20k in back wages, $20k in compensation and a $3500 fine, so it needs to be less than a 46% chance that they will get caught.

      1. Anonymous Coward
        Anonymous Coward

        Re: $3,500 fine?

        The more employees you have and the longer you go without getting caught, the better off you are with only a $3500 maximum fine!

        Worst comes to worse, if you pay several hundred Indian workers $1.21/hr for a few years and you get hit with a bill for millions in back wages and compensation you can just declare bankruptcy, and start up another company doing the same business tomorrow and paying your workers $1.21/hr.

    3. ecofeco Silver badge

      Re: $3,500 fine?

      I see some of you are shocked at finding out that the USA is now a fascist nation.

      1. Michael Wojcik Silver badge

        Re: $3,500 fine?

        I see some of you are shocked at finding out that the USA is now a fascist nation.

        Now?

        Seriously: if the term "fascist" has any useful technical meaning, then it doesn't apply to the USA in its current state, and probably not to the USA at any point in its history either. I suspect people like to use it rather than face the fact that what we have in the US is good ol' capitalism, which is quite capable of enabling all sorts of oppressive behavior and maintaining the existing power structure.

        Not that any group of comparable size (or even one some orders of magnitude smaller) has ever successfully demonstrated a form of political-economic organization that wasn't, mind. There's no silver bullet.

    4. Peter Simpson 1
      Childcatcher

      Re: $3,500 fine?

      Just a bookkeeping error.

      If there was ever an argument for a corporate death penalty...because, you know, corporations are people, too.

      If I tried this, I'd be looking at a kidnapping charge and 20 to life.

  2. Anonymous Coward
    Anonymous Coward

    Always remember...

    "Government gets in the way of free enterprise!"

    [/sarcasm]

    1. Fatman

      Re: Always remember...

      The faithful of a certain political persuasion like to whine: Government regulation is an 'invisible tax' on Job Creators

      </sarcasm>

      </rant>

  3. Anonymous Coward
    WTF?

    wtf

    It is simply amazing that in a period characterized by massive statistical data collection that some sort of alarm wasn't tripped on either the hourly wage side or abusive hours worked. Hell, the latter should have triggered an Federal OSHA or Cal-OSHA violation IMNSHO. Oh, I forgot, they don't have any such data collection requirements. Not even The BLS (Bureau of Labor Statistics) or BEA. And Congress sure ain't going to require it. Ever.

    I had one time where I worked that number of hours (128 to be exact) straight through after a generator reverse power test failed to trip the breaker and my 20 KW radio became a nicely sized capacitive source for that generator cum motor. It wasn't pretty. They had medical standing in attendance just in case, which was good as I got myself across 20KV. At least I didn't need a pacemaker as is usually the case. Nope. A message to the police: Don't even reach for a Taser, you'll just annoy me. (Serious)

    Even with breaks for sleep that's still mind-numbing. I know, having done that dozens of times as well. Management doesn't listen to facts, so why should this case be different. So, exactly what was the real reason that this firm required these people, and perhaps local talent as well even if not reported, to work these hours? Mistakes cascade doing this. Often lethal mistakes which sure isn't good for the insurance premiums.

    1. Ian Michael Gumby

      Re: wtf

      They were only caught after someone tipped them off.

      The indians were brought in for a short term contract negotiated and paid in India.

      So its off the US books and off the radar.

      I'm sure this happens more that you'd think.

      If you want to do it right, just open an Indian subsidiary and onshore the workforce. For short term gigs this doesn't pay off. But if they are brought in for longer periods...

      Welcome to the global workforce and global tax/accounting loopholes. Its not just the Double Dutch Irish ..

  4. Gray
    Devil

    Truly inspiring ...

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

    Ayup ... it is precisely that spirit of entrepreneurship, free-wheeling capitalism, and diligent enforcement of labor practices, that make America the world's greatest economic powerhouse. Nothing spells success like success!

  5. ratfox
    Holmes

    It's always amazing that some employers think they can go about with this kind of cheating,

    With these kind of fines, little wonder…

  6. Anonymous Coward
    Anonymous Coward

    How dare he/she...

    '"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'

    Let me focus even more on his/her quote:

    "...even foreign employees..."

    So we have Beverly Rubin, here are some excerpts from Linked in:

    ____________________________________________________

    Director, Compensation, Benefits & HRIS

    Electronics for Imaging

    Public Company; 1001-5000 employees; EFII; Computer Software industry

    2000 – May 2014 (14 years)

    Director, Compensation & Benefits

    Space Systems/Loral

    Public Company; 1001-5000 employees; Defense & Space industry

    1983 – 2000 (17 years) Palo Alto, CA

    Describe your position

    Manager, Compensation & Benefits

    Space Systems/Loral

    Public Company; 1001-5000 employees; Defense & Space industry

    1982 – 2000 (18 years)

    ____________________________________

    So has plenty of experience with "Compensation" and "Benefits"... so overlooked? I don't think so. I suspect you knew what you were doing. The fact there was a tip off shows that what you did was obvious to others.

    FRO, Bev.

    I think you summed up your personality by the phrase "even foreign employees" .

    1. DavCrav

      Re: How dare he/she...

      "I think you summed up your personality by the phrase "even foreign employees" ."

      While she's probably vile (as she is an executive) you know full well that she means foreign-based people who come over and work temporarily for a week or two, and not foreign-born people living in the US on a permanent basis.

      It's quite easy to deliberately misinterpret -- overlook? -- someone's obvious meaning in a sentence to find a negative potential secondary meaning. It doesn't help debate.

      1. Anonymous Coward
        Anonymous Coward

        Re: How dare he/she...

        I haven't misinterpreted. I didn't take it the way you presented it, I took it as as foreign as in workers who are not resident in the US.

        It was the *even* bit, as in even if they are not US residents.

        1. John Brown (no body) Silver badge

          Re: How dare he/she...

          "It was the *even* bit, as in even if they are not US residents."

          Yes, because that is the time when special circumstances kick in, eg in many/most countries, temporary workers don't pay local tax or other "charges" levied against wages and are not entitled to local benefits so a person in her position and experience level should have been paying extra special attention to the details of the "compensation". Since she wasn't, then she was negligent.

          1. Sorry that handle is already taken. Silver badge

            Re: How dare he/she...

            The "even" says to me "we'd do it to everyone and enjoy it, if only it weren't for these pesky laws".

            Am I reading too much into it?

        2. Anonymous Coward
          Anonymous Coward

          Re: How dare he/she...

          > It was the *even* bit, as in even if they are not US residents.

          I'm sure I read somewhere about some advice given to a daughter going on her first day or somesuch:

          "See how he treats the waiter. If he's not kind to the waiter then he's probably not kind at all."

      2. Anonymous Coward
        Anonymous Coward

        Re: How dare he/she... @DavCrav

        "and not foreign-born people living in the US on a permanent basis"

        You mean like the millions of illegal immigrants here? This stuff happens all of the time to them. One of the big Texas restaurant chains in Dallas got busted paying $5 a day to their kitchen staff. Small fine.

        My employer, like most big companies sub contracts the cleaning crew. The company that ran the cleaning crew conducted all interviews in Spanish. Those employees spoke very little English.

        My employer decided to find out what the Subcontractor was getting paid vs. what the employees were getting paid. A huge ripoff. They weren't even getting minimum wage. Contract was cancelled. The new cleaning crew is a lot more diverse.

        1. Anonymous Coward
          Anonymous Coward

          Re: How dare he/she... @DavCrav

          Yup like they say knowledge is power and most employers treat immigrants as ignorant so of course they take advantage since they have no scruples.

  7. Version 1.0 Silver badge

    First up against the wall when the revolution comes.

    Listen to the CEO's and they will tell you that there's a huge shortage of US engineers to do this sort of work which is why they keep demanding more and more visas for foreign workers to come to the US and do the jobs that Americans are simply unwilling to do. Cheap foreign workers keep America competitive is another mantra ...

    The politicians, lawyers, and corporate shills would sell their mothers to be rendered down for soap if they could get $1.21 for them.

  8. Jonathan Richards 1 Silver badge
    Thumb Down

    By the numbers...

    ...that's not just exploitative, it's physical abuse. 122 hours in 7 days is 17.4 hours a day, leaving a bare six hours for washing, eating, sleeping and other bodily functions. There must be other laws beyond the demonstrably toothless labor [sic] regulations which forbid that sort of thing?

    1. Yet Another Anonymous coward Silver badge

      Re: By the numbers...

      The 14th amendment and a civil war ?

    2. Hud Dunlap
      Mushroom

      Re: By the numbers... @Jonathan Richards 1 Been there done that.

      7-11, 21 days straight. That is not counting the 30 -45 minutes going to work and coming back. Straight Salary. I didn't know at the time that was illegal. By the time I had found out the company had gone out of business but the CEO etc... were wealthy.

      When you work that much overtime half of what you do is undoing the mistakes you made because you were too tired.

  9. menotu

    time to start building guillotines ??

    1. Yet Another Anonymous coward Silver badge

      you better hope that nobody at the NSA knows anything about history or France - so you're probably safe

      1. ecofeco Silver badge

        "you better hope that nobody at the NSA knows anything about history or France - so you're probably safe"

        It would appear that most of rich have forgotten or never learned it as well.

      2. Bucky 2

        ?? History of where ??

        I went to US public school. I can tell you that in my particular case, the history curriculum was ONLY US history, from 1492 to 1787. Over and over. K-12.

        I learned about the French Revolution and the Civil War on my own time.

        I can't tell you if my experience was common or not. But I would guess it's not unique.

    2. Anonymous Coward
      Anonymous Coward

      WAY past time.

  10. zen1

    Don't get me wrong....

    while I'm all for naked capitalism and making as much money as I can, what this firm did is so far beyond unethical & illegal that it turns my stomach. I know executives can be pretty stupid but for a VP of HR forgetting or "over looking"? That bitch needs to be hog tied up and put on ice. And, the federal government needs to get involved and fine the piss out of that company, for human rights violations.

    1. tempemeaty

      Re: Don't get me wrong....

      Sadly that mess masquerading as the US Gov is only a corrupt Corporate sock puppet.

      1. ecofeco Silver badge
        Coat

        Re: Don't get me wrong....

        "Sadly that mess masquerading as the US Gov is only a corrupt Corporate sock puppet."

        Wall St.

        ...and that's an insult to sock puppets!

        1. Swarthy Silver badge
          Facepalm

          Re: Don't get me wrong....

          Ah, I had initially read that as "stock puppet", and it still made sense(-ish).

    2. Anonymous Coward
      Anonymous Coward

      @zen1 - Re: Don't get me wrong....

      Well, you should get used to it because this is capitalism at its finest. In an ideal capitalistic world, employees should work 27/7 and be paid a grand total of 0.00USD a day. Profit would be massively increased and we all know this the only mission of any enterprise, to make as much profit as it can. Obeying the law comes second but only if it does not interfere with the first.

      Ethics in capitalism? I didn't know this joke but it's a really good one.

      1. Michael Wojcik Silver badge

        Re: @zen1 - Don't get me wrong....

        In an ideal capitalistic world, employees should work 27/7 and be paid a grand total of 0.00USD a day. Profit would be massively increased and we all know this the only mission of any enterprise, to make as much profit as it can.

        Utterly wrong. That would be inefficient use of resources. Even if the labor market provided unlimited supply, you'd still have training and other overhead.

        What you've described is slavery. Eric Williams demonstrated why capitalism is more efficient than slavery at extracting value from labor; others have made similar arguments.

  11. Anonymous Coward
    Anonymous Coward

    Let him know what you think.......

    guy.gecht@efi.com

  12. Anonymous Coward
    Anonymous Coward

    There is more to this story...

    This event took place while the head office was moving from its old headquarters in Foster City to the new HQ in Fremont. Hundreds of US contractors were involved as well as most of the IT staff in the remainder of the US. Since much of the helpdesk is run by the company office in Bangalore, eight team members were brought in from this office to help. These team members were paid their regular salary, all travel expenses, a per-diem as required by Indian law for the USA, and once the project was complete, a very healthy bonus. This additional reimbursement is not considered as income by the law and is not reflected in the media. The time before, during and for about a month after the move was not hectic... it was nuts. I am not surprised HR missed this. It was open wallet time and things were done because they had to be done. Sort the details later.

    The law in the USA states anybody working here must be paid at least minimum wage. I suggest you Europeans get off your high horse - because there are no such protections in the EU. For many years I worked in a German subsidiary in eastern Europe. My people were regularly sent to the UK, Italy, Germany to assist on projects. Both before and after entering the EU. These staff only received their salary, per-diem and reimbursed travel expenses. No bonuses, etc. They were, and some still are paid significantly less than minimum wage in the western european countries where they are working.

    1. asdf

      Re: There is more to this story...

      Anything to justify that quarterly bonus eh?

    2. Anonymous Coward
      Anonymous Coward

      No Names ..just amounts...

      Give us some figures .. afaik Germany in particular is very strict on Labor laws, Uk was one of the last euro countrys to have a min wage. maybe if they worked in Eastern Europe, like Dubai or Israel, such laws wouldnt apply??

      1. John Brown (no body) Silver badge
        Headmaster

        Re: No Names ..just amounts...

        "maybe if they worked in Eastern Europe, like Dubai or Israel,"

        Ummm....where? See the geography master icon :-) ---------------->

    3. John Brown (no body) Silver badge

      Re: There is more to this story...

      "because there are no such protections in the EU"

      Yes, there are. The fact you worked for an employer who got away with breaking the law doesn't mean the law doesn't exist. But then you mentioned "eastern Europe" and "many years ago" so maybe you are talking about what was recently communist eastern bloc which was a little like the Wild West for quite some time after the fall of Communism. (some still is, see Russia and some of its "satellite" states)

      1. Anonymous Coward
        Anonymous Coward

        Re: There is more to this story...

        Funny you mention the law... Imagine one of the largest financial institutions in Europe, ignoring the law.. for 10 years - with no auditors noticing... Post the relevant regulation and I will get it to the people who need it. Countries? Latvians, Lithuanians, Estonians, Czechs, Slovaks are the ones I saw the most. All have been a part of the EU for years...

    4. Hud Dunlap
      Thumb Down

      Re: There is more to this story... @AC

      HR wasn't working the 120 hour weeks, I can guarantee that. The only mistake is they got caught.

    5. DrGoon

      Re: There is more to this story...

      Bevnonymous Coward - was the "very healthy bonus" in fact the $5019 per employee that you owed in back wages and liquidated damages?

      1. Anonymous Coward
        Anonymous Coward

        Re: There is more to this story...

        No. The money paid out now was on top of all the income they received last year.

  13. Anonymous Coward
    Anonymous Coward

    Is this the same EFI?

    https://www.linkedin.com/vsearch/p?keywords=electronics+for+imaging&f_CC=4303&sb=People+who+work+at+EFI&trk=tyah&trkInfo=tarId%3A1414407106073%2Ctas%3AElectronics%20for%20Imaging%2Cidx%3A1-1-1

  14. stringyfloppy

    Next time we'll hire Oompa Loompas...

  15. Anonymous Coward
    Anonymous Coward

    Executive suite converation

    CEO: so they want $30K?

    Underling: Yep, $30,000.

    CEO: (mumbling) ok, $30K times, what, eight workers? is two hundred and

    Underling: (Interrupting) No. Not $30,000 each. Thirty Thousand total.

    CEO: Total? Cut em a check!

  16. Inachu

    I am sure they will not see that $20k any time soon.

    I am sure their contractor will try and claim some of it as they try to do all the time,

    1. Anonymous Coward
      Anonymous Coward

      They already have the money, and they are not contractors. Our employees.

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