Tesla is going through a rough 2025 with a 13% sales slump over the first half of this year, but it may be getting even worse for the electric automaker. A proposed class-action lawsuit filed on Friday in San Francisco federal court claimed that Tesla prefers to employ H1-B visa holders over American workers at its U.S. facilities at a systemic level. The primary reason behind this apparent policy is that the company can pay non-Americans less.
The suit’s plaintiffs, software engineer Scott Taub and human resources specialist Sofia Brander, alleged that Tesla refused to hire them after they informed the company that they were American citizens. The filing also cited that the automaker laid off over 6,000 workers while hiring 1,355 visa holders. However, the lawsuit will need to prove systemic discrimination against Americans beyond just anecdotal accounts and coincidental figures. According to Reuters, the complaint stated:
“While visa workers make up just a fraction of the United States labor market, Tesla prefers to hire these candidates over U.S. citizens, as it can pay visa-dependent employees less than American employees performing the same work, a practice in the industry known as ‘wage theft.”
Tesla has been the subject of intense workplace scrutiny
Despite the Trump administration’s efforts to limit immigration, South Africa-born Elon Musk has long fought to preserve the H1-B visa. However, the Tesla CEO might not have altruistic intentions for hiring foreign workers whose ability to remain in the country depends on staying employed. Tesla has been the subject of multiple lawsuits and federal investigations over how the automaker treats its workers. A different class-action suit last year claimed that the manufacturer failed to pay overtime, failed to provide paid sick leave and failed to inform employees of the quotas they were required to meet.
Tesla has also fought efforts by its workers to unionize. In 2023, Tesla fired dozens of employees at its Autopilot factory in Buffalo, New York the day after announcing a unionization campaign. Organizer stated that the automaker was attempting to terrify the facility’s 1,000 workers away from forming a union. Musk himself threatened to strip Tesla employees of their stock options in 2018 if they attempted to unionize. Tesla has seemingly always been wary of giving its employees any recourse in their treatment.
