To understand how this scam works... H1-B Indian will have BS/MS degrees (from India) and they are willing to work for $35,000. So the body shop takes out tiny ads in local newspapers offering to hire programmers/testers with a BS/MS for $35,000. Of course no qualified US computer person is going to take work at $35,000/yr. These ads generate the "proof" needed that these jobs can't be filled by Americans.
The body shop then brings in 500 H1-B people and pays them $35,000/yr. According to the law this is allowed, there are no US citizen willing to take these jobs at $35,000/yr. But then the owner of this body shop turns right around and places these people as temp workers for $80,000/yr. He undercuts the US temp workers who would get $90,000/yr.
This is a great business $80,000 - $35,000 = $45,000 profit per H1-B visa per year. This is how you make $100M from owning a body shop over the course of a few years.
To go into a bit more detail of your example, there are more work to do on the body shop part. The body shops call themselves as "recruiting" or "consulting" companies.
- 1. The fresh graduated can be from India or the U.S. However, those body shops that have better connection in India would prefer those from India because they tend to be cheaper.
- 2. Due to the process of getting LCA, employers must post the job offer at their work site. This meant, there is no posting because body shop does NOT have a work site but a training site (explained below).
- 3. Due to H1B prevailing wage (each position has its own fixed wage), the body shop will pick the cheapest prevailing wage position but still relate to IT (e.g. Web Designer, etc.) in their application.
- 4. Those who are candidates to work for body shop will have their resume fabricated. The resume usually starts from junior to manager depending on how a candidate appears (and/or education). There will be multiple projects in the resume, and each would length from 6 months to 2 years.
- 5. The candidates will be trained to be familiar with their new resume. This training includes all questions about the job experience in the resume, as if they have worked in those projects. If there is any programming involved with the projects, the candidates will be trained in basic programming of the related technology. Often times, train with someone who works with the technology. No need real programming.
- 6. After the body shop feels confident about the candidates (a couple weeks afterward), they will start putting these candidates in their supply pool. Let them get interviewed by companies. They don't expect the candidates to get a job at the first time.
- 7. Whenever a candidate fails an interview, they will help the candidate to analyze why the candidate fails. Then try to improve strategies for future interview. It could be a learning experience for the body shop as well.
- 8. If a candidate keeps failing an interview, the body shop would either terminate the person or retouch the candidate's resume to be something a bit different.
- 9. If the candidate lands a job, they will earn big profit.
The reason is that the body shop will apply for H1B with much lower salary (prevailing wage), but at the same time gets paid for higher experience job. Everything (book keeping) is internal. Anyone who can't hold on the job, the body shop will swap the person out with a different one they have got in the pool. Then the body shop may terminate or move the person to somewhere else.
This abuse has been done for over 10 years, but it was very small at the time. However, it became very popular, especially Indian companies, about 10 years ago. Remember when the H1B application went through the roof (140k+ applications) within the first 2 days of opening?