On August 17, 2010, the Department of Labor ("DOL") announced that Smartsoft International Inc., a computer consulting company based in Georgia, has agreed to pay $999,732 in back wages and interest to 135 H-1B nonimmigrant workers. The DOL's Office of the Solicitor reached this determination based on a finding of the DOL's Wage and Hour Division ("WHD") that Smartsoft had violated the H-1B program's rules by failing to pay the wages that the program required.
The WHD determined that some Smartsoft employees were "… not paid any wages at the beginning of their employment; paid on a part-time basis despite being hired under a full-time employment agreement; and paid less than the prevailing wage applicable to the geographic locations where they performed their work." Smartsoft contested the WHD's conclusions and requested a formal hearing. As part of the August 17th agreement, Smartsoft agreed to drop further challenges to the WHD determination but noted that it "strongly believes" that it would have prevailed in legal proceedings over this issue.
In announcing this resolution, DOL Secretary Solis indicated that it "underscores the Labor Department's commitment to enforcing our nation's employment laws, including those designed to protect H-1B program participants … ." Employers with H-1B workers should consider the Smartsoft resolution as a reminder of their wage obligations under the H-1B program and the costs associated with failing to live up to those obligations.