Company Discriminated Against Americans in Favor of H-2Bs

H-2B program

The case of a Louisiana employer highlights problems with the H-2B program, and guestworker schemes in general.

The Department of Justice recently ordered Barrios Street Realty Company of Lockport, La., to provide the final payment in a $108,000 settlement to a group of American workers who were discriminated against in favor of H-2B workers. According to a March 2016 press release from the Justice Department, the firm knowingly and illegally hired temporary foreign workers despite there being 73 qualified Americans willing to do the job.

Following a lawsuit, Barrios Street Realty had to pay a total of $115,000 to compensate just 12 of the American workers who were passed over for foreign workers. The roofing company will also owe $30,000 in civil penalties and lose the ability to hire H-2B workers for a period of three years.

Under the H-2B program, employers are legally obligated to demonstrate that they have tried to fill their positions with authorized U.S. workers and that they are applying for H-2B workers only because they cannot find U.S. workers willing to work for them. Part of these provisions include advertisements in local papers. In the case of Barrio Street Realty, it turns out that they could have filled every single one of their positions with U.S. workers. In fact, they did not need the H-2B program at all.

Information from the Department of Labor’s H-2B disclosure data for 2014 (the year of the offense) gives us some data on the jobs. This company applied for 47 roofers to work in New Orleans for an attractive $22.35 an hour. The certified foreign roofers were to work in the United States for 10 months (43 weeks) between October 2014 and July 2015.

Under a 40-hour work week calculation, Barrios Street Realty paid out close to $1.8 million in wages to the 47 foreign workers they hired. That is $1.8 million in wages that legally should have gone to the American workers who were fit for these jobs.

The 73 Americans would have received $38,000 each for their work, based on a 40-hour work week. For the fortunate 12 that were party to the lawsuit against Barrios Street Realty, they will receive about $9,500 each.

Barrios Street Realty’s actions have highlighted a number of problems with the H-2B program as a whole. First, this was not a “job that Americans won’t do”, as evidenced by the 73 qualified Americans who applied for this job. Advocates for temporary worker programs insist that these positions are simply undesirable to Americans, but studies have shown that this is not the case.

Second, employers like Barrios Street Realty will go out of their way to overlook Americans in order to hire foreign temporary workers who are dependent on their employers to maintain their visa status and are less likely to protest foul working conditions. This case is a prime example of a company actively using foreign workers in the place of U.S. workers, even when there were enough available and willing to work for them.

Third, it can be difficult to expose companies that have knowingly passed over American workers. By the time anyone discovers their violations it is usually too late. In this case, 73 American workers lost out on the opportunity to hold high-paying jobs. This case was not settled until 2016, a full two years after the foreign workers had taken those seasonal jobs that were fit for American workers.

Finally, firms that guide employers through the H-2B certification process (often referred to as body shops) are as complicit in the discrimination against American workers as the employers, and have a much larger impact because of the number of workers they can affect given that they have numerous clients. In this case, the lawyer who arranged for the H-2B workers, Jorge Guerrero, had business associations with employers JAG Premier, LA Jomac, Pangea Industries, and Guro Enterprise LLC at the time of the offense. Those employers collectively certified 115 temporary foreign workers under the guidance of Guerrero’s firm. Unlike his client Barrios Street Realty, Mr. Guerrero did not receive a three-year probationary period of any sort, and likely will continue to serve as a labor broker for companies that seek to import foreign workers

The actions of Barrios Street Realty and Guerrero show that the H-2B visa system is flawed. Research shows that temporary foreign workers threaten the jobs of America’s low skilled workers and remove opportunities for some of the most vulnerable among us. In this case, Americans were not given the opportunity to fill high-paying temporary jobs because of the illegal actions of a company determined to hire foreign temporary workers.