The recruitment of guestworkers is a lucrative business for the companies that help U.S. employers obtain cheap foreign labor.

A lawsuit filed by the Southern Poverty Law Center (SPLC) opens a window into this world, in which workers pay thousands of dollars to recruiters in their countries for the right to work in unskilled and semi-skilled jobs in the United States.22

The lawsuit, filed in 2008, contends that the marine fabrication and services company Signal International, and the company’s labor recruiters and lawyers, violated anti-racketeering, anti-trafficking, and wage and hour protections by charging guestworkers exorbitant fees based on false promises, refusing to reimburse those fees, and then using the guestworkers’ resulting debt as a tool to prevent them from leaving, effectively forcing them to put up with dismal working and living conditions.

Following Hurricane Katrina, Signal sought to take advantage of a windfall of rig- and ship-repair jobs, but it lacked the necessary workforce. Signal hired Global Resources, a Mississippi-based labor broker, and Dewan Consultants, a Mumbai-based labor recruiter, to recruit and provide 590 Indian welders and fitters to Signal’s Texas and Mississippi shipyards to allow it to take advantage of the business opportunity created by storm damage.

Sachin Dewan, director of Dewan Consultants, testified in a deposition that his firm collected between $11,000 and  $18,000, and sometimes more, from each person recruited to work for Signal. These charges covered the exorbitant recruitment fees, and additional amounts for travel, immigration applications, and visas. In order to raise the money, the workers took on staggering debt at high interest rates, typically mortgaging the family home and land and pawning personal possessions. According to Dewan, the fees were the equivalent of two to three years’ salary for a welder in India. The workers paid so much because the recruiters had told them that Signal had agreed to sponsor them for permanent resident visas that would allow each worker to settle in the U.S. permanently with his wife and children.

Upon arriving at Signal, the workers were distressed to find that conditions were not what they had been led to believe. The guestworkers were housed on Signal’s work site in guarded labor camps, housed in cramped 24-by-36-foot trailers, each holding 24 men who shared two toilets. Signal deducted more than $1,050 per month from each worker’s paycheck for room and board, further heightening the workers’ stress over whether they could afford to service their debts. Worse yet, Signal eventually announced that it would not apply for the permanent residency visas the workers had been promised.

Because the workers had entered the U.S. on 10-month H-2B visas, they could not earn enough to pay back their debts. Although conditions at Signal were bad, the workers were prohibited by law from seeking alternative employment. Nor could they leave Signal; in the words of one worker, “I couldn’t go back to India, still carrying the massive amounts of debts I had incurred to come to the United States. If I was forced to go back, I planned to hang myself once I landed in India, at the airport.”