H-1B: Oracle favored hiring foreign graduates of U.S. colleges over American grads, feds allege

By Ethan Baron

Not only did Redwood City software titan Oracle favor hiring Asians for key departments, it favored non-citizen Asian graduates of U.S. colleges over American graduates, the federal government claimed in a lawsuit.

The Department of Labor alleges in its suit against Oracle that a “vast majority” of the firm’s hires through its college recruiting program were non-citizen visa holders from Asia.

“These students required work authorization to remain in the United States after graduation,” the Labor Department said in a court filing. “In other words, Oracle overwhelmingly hires workers dependent upon Oracle for sponsorship to remain in the United States. This preference for a workforce that is dependent on Oracle for authorization to work in the United States lends itself to suppression of that workforce’s wages.”

Of about 500 recent college and university graduates hired into three job categories at Oracle from 2013 to 2016, some 90 percent were Asian, the filing said.

At the same time, Asians, blacks and women were “systematically underpaid,” according to allegations in the lawsuit, which also claimed that unequal pay cost workers $400 million in lost wages.

The company this week attacked the lawsuit, calling it “meritless” and claiming it was based on false allegations and “cherry-picked statistics.”

Oracle, led by executive chairman Larry Ellison, said it is in compliance with its regulatory obligations — as a federal contractor it falls under the oversight of the government — and committed to equality.

The government also alleged in the lawsuit that Oracle, amid the legal action, destroyed documents related to its hiring process.

Oracle’s pay gap for Asians and women began at hiring, when those workers were either started at lower salaries than other employees, or hired into lower-paid jobs, the suit alleged. And the gap broadened over time, according to the suit. “The longer that female and Asian employees stay with Oracle, the less they are paid in relation to other employees,” the suit claimed.

The lawsuit caught the attention of Ron Hira, a Howard University professor and critic of the use of foreign workers on visas. Foreign citizens recently graduated from U.S. colleges and universities usually work under an Optional Practical Training work permit or H-1B visa, both of which have been the focus of reported abuse. Oracle is not alone in favoring foreign workers who can be paid less because they’re tied to a company by their visa or work permit, Hira alleged.

“Industry’s key argument for more cheap H-1B and OPT guest workers is that there’s a shortage of U.S. talent,” Hira said. “That argument completely falls apart in the face of these findings. In fact, the industry is using the visa programs for cheaper guest workers, undercutting U.S. workers, damaging the U.S. talent pipeline, and exacerbating its woeful record on workforce diversity.”

Compete America, a lobby group representing Oracle, other tech giants and a variety of businesses and organizations, in 2017 called high-skills immigration programs “necessary components for maintaining our country’s leadership and competitiveness.” The group said it supported “balanced reforms to the H-1B program, ensuring that all employers are using these visas in the spirit Congress intended – to fill jobs requiring highly skilled professionals in fields where qualified U.S. workers are harder to find.”