May - 2001 - issue > Cover

When computer consultants employed by a staffing or consulting company are waiting to be assigned to a job at a client site for the first time, or are between jobs, they are considered on the bench. While benched, these consultants bring in no revenues, because they have no projects to work on. The consulting company (a.k.a. the employer) has to decide how it will compensate the consultants during that period — this is referred to as the bench policy. Technically, a consultant gets a full salary and uninterrupted benefits from his company during bench time and uses this time to upgrade or learn new technical skills to make himself more marketable.
Often, the reality of the situation is very different, especially for H-1B consultants. It is common for consultants to receive a stipend of only $900-$1500 per month with accommodations provided before they are placed on their first project. This is when they first arrive in the United States from their home country.

“Although it seems that the consultant is being underpaid, the reality is that a consulting firm is taking the maximum risk and has the highest cash outflow at this time,” explains Xavier Augustin, president of Y-Axis, the H-1B Company. “After having filed and paid for the consultant’s H-1B petition, a referral fee to the international vendor, relocation charges (sometimes of an entire family), marketing the consultant, and then lending a 45-60 day credit to the client, the total cash outflow is about $15,000,” says Augustin.

The second bench period between jobs is often jokingly referred to as the ‘beach period’ as most consultants with law-abiding consulting companies get their full salaries even though they are not actively working. But hundreds of computer consultants employed by unethical consulting companies are not paid their salaries, or are paid only half their salaries while they are benched. “That just never happens to US contractors and consultants.

They always get paid their full wages,” says Jerry Erickson, president of Contract JobHunter and Contract Employment Weekly. Some companies even threaten to cancel the H-1B visa of their consultants if they dare to raise their voices against the company. Immigrant consultants endure this injustice, mostly out of fear and ignorance — not knowing what to do or where to turn.

Compounding this problem is the current economic downturn that has high tech companies all over the United States sputtering for survival. Consultants and contractors are often the first to be hit by retrenchments and layoffs, leaving consulting and IT staffing companies scrambling for assignments. “Most consultants who could easily be replaced by salaried workers were squeezed out of the market in the first half of year 2000,” says industry expert Janet Ruhl of RealRates.com, an independent site that provides IT salary and consulting rate information. With a soft market, IT consulting firms struggle with limited opportunities, tight budgets, steep competition, and demoralized consultants who have been sitting on the bench for a long time. “Benching” takes a marked toll on consultants — a lasting emotional, financial, legal and personal toll that is hard to quantify.

WHY ME?
“Being out of projects can be a very frustrating and dejecting experience,” says a benched consultant from Rhode Island. “In a society that thrives on success, many doubts crop in your mind about failure — and if at all you can ever succeed,” he says. “Over a period of time, you lose confidence and self-esteem. You do not have the confidence to meet and speak to new people. Some even lose confidence in their computing capabilities and then lose interest in trying to go out on a project.”

For a consultant who is sent back to his home country with no indication of when he might return on a project, the situation is even harder to handle. Not only does he take a financial hit, but his professional life seems to be on hold, and society questions his competence. Major decisions like marriages and other family matters get postponed or canceled due to financial and professional instability. Without goals, direction or rehabilitation, facing family and friends becomes agonizing.

For another consultant in the Research Triangle area, being benched was initially fun. “After completing two projects without a break, I was really enjoying life when I was first benched,” she said. Not having to drive 60 miles each way in severe weather and bad traffic, and to get paid for that entire time seemed like heaven to her. “But over time, I started getting bored. It is frustrating and unnerving now,” she says. Did her company have a bench policy and adhere to it? “Kind of,” she states. “When I started working with my current consulting company, my offer letter stated that at the end of my first project, I would be given one month’s full salary, and then for the next two months I would receive only half my monthly salary. In the event that I did not get another project within three months, my salary would stop,” she said.

H-1B consultants are often beleaguered by the lack of options they face in their employment. When an H-1B consultant in Texas complained to her employer about being sent to a project in a remote, obscure place with inadequate housing facilities, her employers eventually threatened to withdraw her visa. With assignments few and far between, “consultants are often forced to take on rotten jobs in loathsome locations that allow their skills to atrophy, making it very hard to find the next assignment,” says Ruhl.

Something else goes wrong here — people change. H-1B consultants blame their employers for false promises and breach of trust. Companies blame consultants for bad attitude, lack of patience, and bad communication skills. H-1B consultants feel “tied down” to their employers because of their visa status and often forget that the employer is on their side. “Our Indian companies squeeze the Indian guys,” states a disgruntled consultant from New Jersey who believes that he will survive, no matter what. “Orally, my employer had promised me a bench salary, but like all upstarts they forgot to keep their promise,” he says.

THE EMPLOYER'S STORY
During the bench period “even a ‘good’ consulting company cannot be good for too long,” says Augustin. “It takes about $6,000-$7,000 per month to bench a consultant. A company’s normal profit per consultant is about $15,000 per year. So if a consultant is benched for two months the profits are washed away,” he explains. Most consulting firms are opportunists because that is the dictate of the market. In these trying times, firms must be able to retrain the consultants in new technologies, not cancel their H1Bs, and help them relocate to India for a while, “but all this takes so much capital that most firms genuinely cannot afford it,” he states.

People often have the misconception that consulting companies must mind the careers of their consultants. But in fact the onus of career management is on the consultant himself. “Consultants often loose their cool in the time period when they are at the mercy of their account managers and the marketplace,” says Augustin. “All they do is wait for the calls that are arranged by the consulting firms. It is a nail biting session — every call that rings in the guesthouse is exaggerated and sounds like the ringing of a telephone in a suspense thriller! Consultants often get panicky during an interview — some even black out! I try to convince them that worry will not bring them the project,” but to no avail. “Marketing consultants on the bench is frustrating because consultants don’t see their sponsors as being on their side. It is a constant game of suspicion and bargaining,” he adds.

Consultants may get benched for longer time periods for reasons other than a soft economy. These include poor communication skills, especially on the telephone; the attitude that they are not involved in the job seeking process; obsolete technical knowledge or a bad mix of skills; no overseas or US experience; no certification; no clear cut expertise in the resume; and not showing interest in the job by asking questions.

THE RULE OF LAW
“There are very clear-cut, stringent federal laws that govern such situations in the American labor market,” says attorney Sheela Murthy, a well-known immigration lawyer from the Law Office of Sheela Murthy in Baltimore. According to the American Competitiveness and Work Force Improvement Act (ACWIA) of October 1998, an employer is not allowed to deduct the salary or pay a discounted salary to a foreign employee while the employee is not on productive work for the employer. In other words, it is a consulting company’s responsibility to pay a full salary (as mentioned on the H-1B petition and the accompanying Labor Condition Application to the INS) to an H1-B employee if they are benched. Although consulting and recruiting companies are not legally required to have a “bench policy,” they are not allowed to have a bench policy where they do not pay the full salary and benefits to their H-1B employees.

Under the ACWIA, an employer has up to 60 days to start an H-1B employee who is already in the US on its payroll. For an H-1B employee who is abroad, the employer has to start paying 30 days after the H-1B employee enters United States.

H-1B holders are legally allowed to look for another job when they are on the bench or even while they are working full-time for their employer. The employee can terminate his employment at any time and apply for a new H-1B visa through another employer.

In the same vein, it is also legal for an employer to fire an employee if they have not been able to market him or her for several months. In fact, an employer can terminate the services of an employee at any time and for no reason whatsoever since most states in the US follow the rule of “employment at will.” This follows the principle of freedom to choose employers and employees in a free market. Of course, if there is a written employment agreement between the parties that requires a certain time frame like two weeks or one-month notice, then the terms and conditions of that agreement are binding on both parties (if it is considered reasonable and not unduly restrictive).

WHAT EMPLOYEES NEED TO KNOW
It is very important to be aware of your legal rights if you are a consultant on an H-1B visa. Some of the issues you should be mindful of are: * Make sure your employer is paying the full wage as mentioned on the H-1B petition, because that is the only evidence that the person has been maintaining valid legal status in the United States.
* If your employer terminates your employment, request that the severance pay be paid in biweekly installments. This way you will have an opportunity to apply for other jobs and show recent pay stubs. Otherwise you will be required to fly back to the home country to pick up your new H-1B visa.
* If your employer terminates your employment, you are legally allowed to have a one-way return ticket back to your home country from your employer.
* On the other hand, if you quit or resign voluntarily, your employer does not owe you a return ticket back to your home country.
* Be aware that the ACWIA allows employers to recoup the costs of training fees, transportation and other direct out of pocket expenses that they have incurred as liquidated damages if the employee leaves the employers without adequate notice or within a certain time frame. Egregious amounts that have no relationship to what has been expended by the employer are not permitted under ACWIA.
* If a consulting company has asked its H-1B employee to pay them up front money to bring them to the United States, then its legality would be decided in the foreign country’s law. Ordinarily, it would not have jurisdiction in the US courts unless both parties agree to the jurisdiction of the US courts.
* All other rules that apply to US citizens and permanent resident employees regarding performance standards and following company policies and procedures apply to H-1B employees as well.
An H-1B employee who feels exploited by an employer should, and is within legal rights, to:
* Contact the US Department of Labor (DOL) if there has been a breach in terms and conditions of payment while on the bench. The DOL then investigates or audits the employer and can bring charges. At this point, there is a hearing before the Administrative Law Judge (ALJ). If a decision of the ALJ is appealed by either party, the case goes to a court of law.
* Additionally, if there is a breach of contract because an employer agreed to pay a certain salary to the employee but in reality refuses to pay the H-1B employee the stated salary, the employee can bring a separate lawsuit for enforcing the terms of the contract under state law.

“Any company threatening to take away your immigration visa in response to your complaining about labor law violations MUST be reported to the INS immediately,” says Ruhl. “Also notify newspapers like The New York Times and The Washington Post because that is the only way that abusers will be brought to heel,” she emphasizes.

WHAT EMPLOYEES CAN DO
It is difficult for a good employer to protect his company fully against intentional violation or ruthless conduct by its employees. Many individuals use these consulting companies only as a means to entering the United States. Once here, they quickly abandon their employers without notice or with scant regard for commitment, client projects, or ethical behavior. To protect themselves against ruthless employees, a company may be able to use some of the following:
* Have an employee sign an employment agreement with strict clauses, but which are reasonable and will probably be enforced in a court of law regarding the employee not leaving the employer without sufficient notice, or not applying for other H-1B jobs while working for the employer.
* Have an employment contract with a clause for repayment of airline tickets, other transportation costs, hotel charges, and training costs related to acclimatizing employees to the US. Liquidated damages can include attorneys fees incurred, but they cannot include the $1,000 training fee paid to the INS.

As demoralizing as bench time can be for consultants, one can do things to use this time constructively. Here’s what Janet Ruhl, Jerry Erickson, and Xavier Augustin recommend for consultants on the bench: * “Use this time to learn new and marketable skills,” says Ruhl. “Don’t depend on anyone else to find you work — go look for a new job on your own,” she says. Find out about firms by talking privately with people who work for them, making sure they are not being paid to recruit you. There is no substitute for personal recommendations.
* Larger usually means “more exploitative,” she says. If possible, find a smaller firm that has a reputation for supplying people with high quality skills. Talk to managers at your client site to find out which companies they depend on to supply the most professional, highly qualified people — and go to these companies to work for.
* If you are an immigrant, learn your legal rights in the United States, preferably before you come here.
* “You must be ‘resume ready’ and prepared for the next job at all times,” suggests Erickson. In many ways, “H-1B consultants have more job security than their American counterparts, although they might get paid a little less,” he says. As a contractor, one should never have the illusion of job security — you have to keep moving and marketing yourself even before your current project is over.
* Surprising as this may seem, “return home for a while, chill, get married, get trained in a new technology or travel,” suggests Augustin. Wait outside the US for a year and get a new six-year lease for your H-1B visa. Take a job in Europe, Singapore, Australia, the UK or the Gulf for a year or two.
* Don’t get into any long-term mortgages or loans like buying a house or a car.
* Shift to a new technology and keep yourself updated on what’s happening in the industry.

INDUSTRY OUTLOOK The current economic downturn and the recent spate of layoffs do not seem to bode well for hi-tech employment, in general. But proponents and opponents on both sides of the H-1B debate agree that the demand for H-1B workers will not drop drastically. Despite the laws and regulations, foreign recruits are still considered cheap labor. If anything, the soft economy may spur an increase in foreign workers because this group is often less expensive than their domestic counterparts and can save cash-strapped companies large sums on the payroll. So no matter what the state of the economy, if you are good at what you do, if you are willing to learn new technologies, upgrade your skills and prove indispensable to your employer and clients, there will always be a demand for you.

For more resources go to: www.siliconindia.com/immigration