This story was originally published by the WND News Center.
As Americans learn that their nation's immigration and visa laws have been subject to phenomenal levels of abuse, particularly the H-1B visa, more subtle and tricky forms of abuse are being employed.
For example, the most powerful tech and finance brands don't just hire workers on H-1B visas directly. They also buy labor from layers of outside "consultancies" that recruit abroad, place people at client sites and skim a margin. Those layers, in turn, create a gray zone of accountability that invites wage theft, benching without pay and even classic kickback schemes in broader contracting.
The secondary-employer trap
Here's how it works: Big companies keep their "headcount" lean and shift cost and legal risk to outside vendors. Those vendors then subcontract to smaller "body shops," so the person coding in a blue-chip office may legally work for a tiny shop two layers down.
When layoffs hit or projects pause, the end client says the worker is not their employee and the vendor says the worker is "non-productive," which is where the abuse really starts.
Senators sounded this scheme out a decade ago when Southern California Edison replaced hundreds of its staff via outsourcers, an arrangement justified by claiming the utility was not the legal employer.
When layoffs hit or projects pause, the end client says the worker is not their employee and the vendor says the worker is "non-productive," which is where the abuse really starts.
Senators sounded this scheme out a decade ago when Southern California Edison replaced hundreds of its staff via outsourcers, an arrangement justified by claiming the utility was not the legal employer.
How secondary employers squeeze workers
Once a worker is on the vendor's payroll, the leverage flips. The Department of Labor has repeatedly found "benching" without pay and underpayment relative to required wages. Those violations are common in layered placements because time between client projects becomes unpaid "non-productive" time. Examples include multiple wage-recovery actions and guidance barring these tactics outright.
Wage theft at scale is not theoretical
The Economic Policy Institute's document-based investigation into HCL, a major supplier to big brands, found at least $95 million in apparent underpayments to H-1B workers through internal pay-level manipulations and off-books adjustments. The business model works because vendors can bill the client one rate yet quietly pay the worker another.
Kickbacks thrive in opaque vendor chains
When major corporations source labor through multiple layers of subcontractors, it opens the door for abuse. Intermediaries can demand "placement fees" or under-the-table payments in exchange for securing or keeping a project role. The Department of Justice has prosecuted kickback and bribery schemes in staffing and contracting, where vendor managers steered jobs in return for personal payoffs, even in cases that had nothing to do with immigration.
The risk multiplies as the number of middlemen increases. In parallel, DOJ investigations have also uncovered consultancy firms hoarding H-1B workers without real assignments, stockpiling them simply to gain leverage over competitors.
In the Cloudgen, LLC case, for example, a classic consulting "body shop" pleaded guilty to conspiracy to commit H-1B fraud, admitting it placed workers on phony client letters and mismatched roles to game approvals. Cases like this reveal how easy it is to feed a layered labor market with questionable petitions.
The Department of Homeland Security (DHS) itself has acknowledged that the H-1B system can depress wages and displace U.S. workers when contractors flood client sites. Rulemaking over the last few years tried to tighten definitions of "third-party worksite" and "U.S. employer," but the layered model still lets brand-name clients claim they are not the employer of record.
The vast vendor ecosystem: A look into the success of the business model
All employer-to-vendor visuals are produced by the Red Line Project, using data pulled directly from employer applications filed with the Department of Labor. Each employer's secondary profile exposes a detailed roster of vendors operating behind the scenes. The takeaway is unmistakable: At many of America's largest brands, the individuals writing code and managing sensitive data are not direct employees at all, but are legally employed by third-party consultancies that specialize in visa staffing and subcontracting.
Every extra layer between the badge and the building is a place where wages can be shaved, fees shifted to workers and kickbacks demanded for a seat on a project. The end client gets the work and plausible deniability. The middlemen get the spread. And American workers get squeezed out of job interviews that should have been theirs.
The pattern is identical across telecom, finance, health care, banking and big tech. Different industries, same architecture. When the stacks grow, accountability shrinks. When the rosters lengthen, transparency fades. Americans are looking at a pipeline that turned their nation's visa program into a profit center for intermediaries.
These images are not abstract graphics. They are the footprint of a business model that is scaled by routing critical jobs through secondary employers. Clean up the layers and the unfair incentives disappear. Until then, the pictures tell the story better than words.
