Kia and Hyundai auto parts suppliers operating in Alabama and Georgia are facing a new lawsuit over an alleged labor trafficking scheme involving special visas created under NAFTA.

The defendants—including the parts manufacturer, a staffing firm, and a recruiter—pursued a “bait and switch” in which Mexican engineers and technicians were recruited for nonexistent jobs through TN visas and then placed in low-paid, manual labor jobs, according to a proposed class action filed Wednesday in the US District Court for the Northern District of Georgia.

The lawsuit is the latest targeting auto parts manufacturers in the Southeastern US as companies scramble ...