Tesla, led by billionaire Elon Musk, is facing a lawsuit alleging that the company favours H1-B visa holders over American workers, reportedly paying visa holders less while disproportionately firing US employees, Reuters reported.
A class action filed in San Francisco federal court claims that Tesla violated federal civil rights law through a “systematic preference” for hiring H1-B workers, while US citizens were terminated at a higher rate.
The lawsuit was brought by software engineer Scott Taub and human resource specialist Sofia Brander, who said Tesla refused to hire them after realising they did not require visa sponsorship, a sign that they are US citizens.
According to the complaint, Tesla relies heavily on H1-B visa holders for skilled positions, noting the company’s estimated hiring of 1,355 visa holders in 2024. Meanwhile, the plaintiffs claim that over 6,000 US workers were laid off domestically during the same period. Reuters reported that Tesla has not yet commented on the lawsuit.
Taub said he was discouraged from applying after being told a position was “H1-B visa only,” while Brander said Tesla declined to interview her for two roles despite her being a contract employee.
The complaint also states that Tesla prefers H1-B candidates because they can be paid less than American employees performing the same work, a practice the lawsuit describes as “wage theft.”
The lawsuit cites a December 27, 2024, post by Elon Musk on X, in which he praised H1-B visa holders for helping make the US stronger. Musk, a naturalised US citizen born in South Africa who previously held an H1-B visa, noted that the program helped bring key personnel to companies like Tesla and SpaceX.
While the lawsuit seeks damages for all US citizens who applied or were fired under these circumstances, it remains unclear how the plaintiffs will demonstrate Tesla’s alleged systemic discrimination in hiring and layoffs, Reuters reported.
H1-B visas allow US employers to temporarily hire foreign workers in specialised occupations. Critics argue that the program can disadvantage American workers by limiting their access to certain skilled positions.
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