3 ms·

Neither I-99 nor W-2 wages are "capex"

• tristor 10y ago
  The business hiring a body shop typically does not directly pay any wages. They pay a per project fee or a contracted per headcount rate, both of which are treated as CapEx and amortized as a project cost. The economics are different for bringing in headcount unrelated to project work, but project based workloads are typically where body shops find their niche.
  • zwily 10y ago
    Work that you contract out and record as CapEx would be CapEx even if FTE's worked on it too. Still not sure what was meant by that point.
    • CydeWeys 10y ago
      The people with H1Bs are full-time employees of the body shops that the jobs are contracted out to. Otherwise they couldn't get those visas. But they are contractors from the point-of-view of the company that is paying the body shops, and that's the point he's making.
      • zwily 10y ago
        I get that, but what does it have to do with CapEx vs OpEx?
        • riskable 10y ago
          Outsourced labor is logged as CapEx in SEC filings and is a means of hiding labor expenses to improve EBITDA (which is used as a primary indicator of business health). If businesses had to report outsourced labor as OpEx instead of CapEx many would see drastic changes to their EBITDA and their stock would drop (for good reason: They're hiding important investment information). The SEC has supposedly been planning to fix this problem for years but has done nothing.