A new investigation accuses Tesla Motors [NSDQ:TSLA] of using cheap Eastern European labor to expand its assembly plant in Silicon Valley, but it is the automaker's response to the situation that is garnering the most attention.

The San Jose Mercury-News published a detailed report last weekend that alleges, among other things, that either Tesla or its contractors imported up to 140 workers from Croatia and Slovenia and paid them a mere $5 per hour to build a new paint shop vital to the company's expansion. The paint shop will be used in the production of the automaker's Model 3 compact electric car.

Tesla responded yesterday, however, saying that it contracted with a firm called Eisenmann, which subsequently outsourced to another company to staff the project. Among those brought in from Europe was Gregor Lesnik, who told the paper that he was in California on a visa that was not applicable to his work situation.

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His visa called him a skilled engineer, not a laborer, and it said he was headed to South Carolina, not California. The Mercury-News' investigation suggests that this was not an isolated event.

This all came to light because Lesnik was injured on the job and sued Tesla, as well as the staffing firm. Tesla was not held accountable in that suit, but the automaker issued a heady release indicating that it, as a company, feels a moral responsibility to ensure that not only are workers taken care of, but that they are paid a more appropriate wage. 

"If Mr. Lesnik or his colleagues were really being paid $5 an hour, that is totally unacceptable," Tesla said in the release. 

The automaker says it is investigating the situation and is working with Eisenmann and the staffing firm, ISM Vuzem. If the allegations prove true, Tesla says, it will do what's right.


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