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Consultancy firm accused of violating California labor laws

If your employer forced you to sign over your tax refunds to the company, you would probably assume that your employer was committing a serious violation under California and federal laws that govern employment issues and employee protections. However, this very same demand was allegedly made by an information technology and outsourcing consultancy firm based in India.

According to two former employees who worked for Tata Sons Ltd., thousands of non-U.S. citizens who worked for the company in the U.S. were forced to give the firm all of their state and federal tax refunds. The two employees accused the Indian firm in 2006 of breaching the contracts of its employees who were working in the U.S. and of violating California labor laws.

The employees have since asked to file a class action lawsuit against the India-based firm, alleging that more than 10,000 workers and former employees for the company in the U.S. have been affected by the company’s violations. Earlier this month, a California judge ruled that the employees can file a class action lawsuit against the firm.

In addition to the accusations that the company forced workers in the U.S. to give up any refunds from state and federal taxes, the firm is also being accused of unlawfully deducting employees’ wages between 2002 and 2005.

The federal judge ruled that employees and former employees affected by the alleged violations will be separated into two different groups. One group can sue the company for employment contract breaches. A second group can sue the company for allegedly violating labor laws in California.

The Indian firm claims that the company has not violated any U.S. wage laws or the employment contracts of any of its employees. According to the AFP, the firm has more than 200,000 employees who work in 42 different countries.

Source: Reuters, “U.S. judge grants class action status to Tata wage suit,” Terry Baynes, April 3, 2012


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