Infosys settlement of $34 million dollars

Barely a day after Commerce and Industry Minister, Anand Sharma raised India’s concerns over certain clauses in the proposed US Immigration Bill to the visiting Chairman of the Board of Director of U.S. Chamber of Commerce Steve Van Andel, stating that the move would strongly undermine the competitiveness of the Indian IT industry in the U.S, comes the shocking news of fraud by Infosys over immigration laws.

In a shocking news, Indian IT giant Infosys has been not only been accused but admitted to and agreed to pay a hefty fine of $34 million for committing “systemic visa fraud and abuse” in bringing temporary workers from India for jobs in U.S. when the same could jobs could be offered to American citizens!

This news further reinstates the argument that has been in place since several years since now about the necessity of bringing in foreign workers to the US instead of finding employees within the country. The amount of payment is the largest ever seen in a visa case in the country and has been brought about as a result of federal prosecutors in Texas bringing to light the case that the company had been systematically committing ‘visa fraud and abuse’.

Infosys, the Bangalore based Indian technology outsourcing company, has apparently so long been “knowingly and unlawfully” been bringing Indian workers to the United States on business visitor visas, which is a faster and less costlier process. This has been has been done on the part of the company to avoid the higher costs and delays of a longer-term employment visa which is otherwise allotted to all foreign workers.

The charges against the company state that Infosys has systematically submitted wrong information to U.S. immigration in order to obtain faster visas. This was done unfairly, which actually gave them an edge over others and also in the process undermined the chances of qualified American workers who could have applied for the jobs.
Investigations revealed, extensive omissions and errors in the hiring records which had also led to thousands of Indians continuing work in the US even after their visa had expired.

The settlement is a huge setback not only because it tarnishes the reputation of the company but also for other Indian outsourcing companies which rely on the H-1B visas to bring thousands of workers from India to the US in order to fill in positions that does not have qualified Americans. The case also saw, four American tech workers assert that the company has discriminated previously also against Americans by employing mostly South Asians.

Infosys employs nearly 160,000 people in 30 countries, including about 15,000 people in the United States alone. This could be seen as an outcome of the tough competition for the H1B visa, which is very intense amongst the Indian outsourcing companies, because of the annual limit of 65,000 visas. As well as the recent changes executed by the Congress, which makes it mandatory for large foreign companies like Infosys to pay almost $5,000 for each visa issued. Recently, the Infosys and other Indian outsourcing companies have regularly been among the top recipients of H1B visas.

The business visitor visa, which is apparently what the company has been issuing to its workers is called the B-1 visa, it has lower fees and is quickly obtained without the hassle of numerous caps, otherwise applicable for foreign workers. The difference between the two visas is that the B-1 visa allows foreigners coming to the US to attend meetings and training sessions; it does not allow them work or live for a longer period in the US. As a result the workers who are employed by Infosys under this visa are paid less too and according to the wage rates prevalent in India, rather than those in the US.

This will of course not only be an eye opener to other outsourcing companies but probably puts a dampener on the objections raised by India regarding the new immigration rules, which might now perhaps be seen in a new light thanks to this case.