That would be illegal and the labor certification process is supposed to prevent it. If you know of any actual instances, PLEASE report them to authorities.
http://www.immihelp.com/visas/h1b/employer-h1b-violations-complaint-procedure.html
https://www.uscis.gov/avoid-scams/report-immigration-scams
I know the labor certification process has room for fudging; e.g. my own company gets statistical programmers with graduate degrees certified as “social science research assistants”; but in the end they are still paid as much as their American colleagues (and certainly enough to live comfortably in the area), so I haven’t felt the need to escalate that particular situation.