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Tesla accused of using cheap foreign labor to build its US factories

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Workers were reportedly paid as little as $5 an hour

A report by The Mercury News has exposed Tesla's use of imported foreign labor to help build its Silicon Valley factories. The article describes how a German company, contracted by the automaker to expand its facilities, exploited the visa system to bring in laborers from Eastern Europe. These workers were reportedly paid as little as $5 an hour while American counterparts earned an hourly rate of $52. Responding to the article on Twitter, Tesla CEO Elon Musk said, "Only heard about this today. Sounds like the wrong thing happened on many levels. Will investigate and make it right."

The Mercury News reports focuses on the story of one Slovenian electrician, Gregor Lesnik, who was hired by contractor Eisenmann to outfit a Tesla paint shop in March 2015. Lesnik suffered numerous injuries — including two broken legs — after falling three stories at work. He was one of 140 foreign laborers hired indirectly by Tesla and was admitted into the US under nonimmigrant visas for tourism and business (called B1/B2s). His visa indicated he would be supervising other workers, but instead, he carried out hands-on labor explicitly not covered by the B1/B2.

Lesnik is now suing his employers for unspecified damages, reports The Mercury News, with his lawsuit claiming that the companies violated both wage and employment laws. Lesnik says he routinely worked 10 hours a day, six days a week and received no overtime pay. Other foreign laborers interviewed by The Mercury News reported similar conditions, but said they were happy with the work. In the past, other Silicon Valley firms have been fined by the Department of Labor for similar working violations.

Tesla, the German contractor Eisenmann, and a Slovenian sub-contractor named Vuzem have all denied responsibility for Lesnik's injuries. Tesla avows that it had nothing to do with Lesnik's contract, and said in a statement: "Tesla sometimes brings in third party general contractors to do short-term construction [...] In these situations, Tesla enters into contractual agreements with its general contractors, which allow them to select the resources they need for the job while also requiring them to hire and pay their workers appropriately." Whether or not any action will be taken against the company remains to be seen.