# 7 Guest Workers Inc.: Fraud and Human Trafficking

by Project Censored
Published: Updated:

Southern Poverty Law Center, March 2007
Title: “Close to Slavery: Guestworker Programs in the United States”
Authors: Mary Bauer and Sarah Reynolds

The Nation, June 25, 2007
Title: “Coming to America”
Author: Felicia Mello

Times of India, March 10, 2008
Title: “Trafficking racket: Indian workers file case against US employer”
Author: Chidanand Rajghatta

Student Researchers: Cedric Therene, Sam Burchard, April Pearce, and Marley Miller

Faculty Evaluator: Francisco Vazquez, PhD

While the guest worker program in the United States has been praised and recommended for expansion by President Bush, and is likely to be considered by Congress as a template for future immigration reform, human rights advocates warn that the system seriously victimizes immigrant workers. Workers, labor organizers, lawyers, and policy makers say that the program, designed to open up the legal labor market and provide a piece of the American dream to immigrants, has instead locked thousands into a modern-day form of indentured servitude. Congressman Charles Rangel has called the guest worker program “the closest thing I’ve ever seen to slavery.”

In the process of attaining a H-2 guest worker visa, workers typically fall victim to bait-and-switch schemes that force them to borrow huge sums of money at high interest rates (often leveraging family homes) in order to land short-term, low-wage jobs that all too often end up shorter-term and lower-waged than promised. Under crushing debt, and legally bound to work only for the employer who filed petition for them, these workers often face the most dangerous and harsh of working conditions in places like shipyards, the forestry department, or construction, with no medical benefits for on-the-job injuries or access to legal services. Bosses often hold workers’ documents to make sure they don’t “jump jobs.”

There are two levels of the current guest worker program—H-2a for agricultural work, and H-2b for non-agricultural work. Though the H-2a program provides legal protections for foreign farm workers—such as a guarantee of at least three quarters of the total employment hours promised, free housing, transportation compensation, medical benefits, and legal representation—many of these protections exist only on paper. H-2b workers, on the other hand, have no rights or protections.

The exploitation of guest workers begins with the initial recruitment in their home country—a process that often leaves them in a precarious economic state and therefore extremely vulnerable to abuse by unscrupulous employers in this country. US employers almost universally rely on private agencies to find and recruit guest workers in their home countries.

These labor recruiters usually charge fees to the worker—sometimes many thousands of dollars to cover travel, visas, and other costs, including profit for the recruiters. The workers, most of whom live in poverty, frequently obtain high-interest loans to come up with the money to pay the fees. In addition, recruiters sometimes require them to leave collateral, such as the deed to their house or car, to ensure that they fulfill the terms of their individual labor contract.

The entirely unregulated recruiting business is quite lucrative. With more than 121,000 workers recruited in 2005 alone, tens of millions of dollars in recruiting fees are at stake. This financial bonanza provides a powerful incentive for recruiters and agencies to import as many workers as possible, with little or no regard to the impact on individual workers and their families.

Though Southern Poverty Law Center reports that the H-2 program brought about 121,000 guest workers into the US in 2005, with approximately two thirds of those in the H-2b section, the Nation’s Felicia Mello reports that the number rose to more than 150,000 by June 2007. And while participation in the H-2a program, with its housing requirements and wage guarantees, has remained almost flat in recent years, the more laissez-faire H-2b system has flourished, with the government adjusting the cap several times to cope with skyrocketing employer demand.

“The tendency has been for the H-2 program . . . to devolve into a system that approximates the exploitative, illegal, underground labor market it was (in part) designed to replace,” writes anthropologist David Griffith in his 2006 book American Guestworkers. “Indeed, there is some evidence that without this downward trend in conditions . . . legal guestworkers become less attractive to US employers.”

In March 2008, more than 500 shipyard workers from India filed a class action suit against the Northrop Grumman subsidiary Signal International in Louisiana and Mississippi, and against recruiters in India and the US, on charges of forced labor, human trafficking, fraud, and civil rights violations. The workers claim they were caught up in a trafficking racket within the federal government’s H-2b guest worker program. In a typical bait and switch scheme that occurred in 2006, over 600 Indians paid up to $25,000 each for a promise of green cards and permanent US residency. They instead found themselves trapped in squalid and dangerous conditions, bonded through the H-2b guest worker program to an employer under what is being called “twenty-first century slavery.” In one incident of protest, Signal sent in armed guards to apprehend protesters in a pre-dawn raid. Plaintiffs, as they press their class action lawsuit, have asked the Indian government to protect their families in India from vengeful recruiters.

When Mello asked an African-American Katrina survivor who supported the guest workers’ grievance how he justified comparing guest work to slavery, he responded, “Do you know the story of the Middle Passage? . . . In slavery, you send a slave catcher, they go to the chiefs and make a deal. They say, We’re going to take your people to heaven, and they show them a few pretty things from heaven. You load them onto the ships and only when they get out to sea do they know they’re slaves. You take them to one owner, and if they leave they’re a runaway. Well, with guest workers . . .” He trails off, says Mello, his meaning clear.


In the year since “Close to Slavery” was published, conditions for guest workers in the US have not improved. A case recently filed by the Southern Poverty Law Center illustrates this in compelling terms.

Hundreds of guest workers from India, lured by false promises of permanent US residency, paid tens of thousands of dollars each to obtain temporary jobs at Gulf Coast shipyards only to find themselves forced into involuntary servitude and living in overcrowded, guarded labor camps, according to the class action lawsuit filed in March of 2008.

Signal International LLC and a network of recruiters and labor brokers engineered a scheme to defraud the workers and force them to work against their will in Signal facilities. Signal is a marine and fabrication company with shipyards in Mississippi and Texas. It is a subcontractor for global defense company Northrop Grumman Corp.

Several of the workers were illegally detained by company security guards during a pre-dawn raid of their quarters after some began organizing other workers to complain about abuses they faced.

After Hurricane Katrina scattered its workforce, Signal used the federal H-2b guest worker program to import employees to work as welders, pipefitters, shipfitters, and in other positions. Hundreds of Indian men mortgaged their futures in late 2006 to pay recruiters as much as $20,000 or more for travel, visa, recruitment, and other fees after they were told it would lead to good jobs, green cards, and permanent US residency.

Many of the workers gave up other jobs and sold their houses, family farms, jewelry, and other valuables to come up with the money. Many were also told that for an extra $1,500-per person fee, they could bring their families to live in the United States.

When the men arrived in early 2007, they discovered they wouldn’t receive the green cards as promised, but only ten-month, H-2b guestworker visas. They were forced to pay $1,050 a month to live in crowded company housing in isolated, fenced labor camps where as many as twenty-four men shared a trailer with only two toilets. When they tried to find their own housing, Signal officials told them they would still have the rent deducted from their paychecks. With the exception of rare occasions, such as Christmas, visitors were not allowed into the camps, which were enclosed by fences. Company employees regularly searched the workers’ belongings.

Workers who complained about the conditions they faced were threatened with deportation. By March 9, 2007, the workers had started organizing. Signal responded with an early morning raid by armed guards on the labor camp in Pascagoula, Mississipi. Three of the organizers were locked in a room for hours. They were told they would be fired and deported. One of the workers, Sabulal Vijayan, who had sold his wife’s jewelry and borrowed from friends to build a better life in America, slit his wrist in desperation. He recovered after being hospitalized. The incident prompted hundreds of workers to strike. Signal fired the organizers.


A year after “Coming to America” detailed the plight of guest workers in the H-2a and H-2b programs, Congress has failed to enact any expansion of the programs, despite urging from business groups and the Bush administration. Yet the immigration issue continues to occupy the national stage.

In a nationwide crackdown, Immigrations and Customs Enforcement (ICE) arrested over 30,000 allegedly undocumented immigrants last year, double the number for 2006. While ICE agents say they are simply enforcing the law, some immigrant advocates believe the raids are designed to increase support for a new guest worker plan.

In February, President Bush proposed changes to the H-2a program that would make it quicker and easier for growers to import farm workers, but do little to protect the workers’ rights. Under Bush’s plan, farmers could offer housing vouchers instead of directly providing shelter to workers—a method unlikely to work in areas with housing shortages—and would no longer be required to prove that they tried to hire US workers first. The formula used to calculate H-2a visa holders’ wages would also change to one advocates believe would result in lower salaries.

The two-pronged approach of stricter enforcement and support for guest worker programs is also gaining ground at the state level. Arizona, which has enacted some of the strictest sanctions in the country against hiring undocumented immigrants, is now considering starting its own independent guest worker scheme to ease a shortage of farm labor in the state.

Meanwhile, guest workers and their allies are stepping up their organizing. The Indian workers who paid recruiters up to $20,000 for jobs at ship builder Signal International sued the company in March, saying it committed fraud by promising them permanent residency and deducted exorbitant rent from their paychecks while housing them in cramped trailers.

Two months later, twenty of the workers went on a month-long hunger strike, camping out near the Indian embassy in Washington, DC. They demanded the right to remain in the country while they pursue their case, Congressional hearings into abuse of guest workers, and bilateral negotiations between the US and India on the rights of Indian guest workers. The Justice Department has since launched an investigation into their claims.

The murder of union organizer Santiago Rafael Cruz, who helped Mexican guest workers challenge exploitation by recruitment firms, remains unsolved