BackInfosys agrees to pay $34 million to settle US visa case
Firm concedes it failed to maintain accurate immigration records, but denies any claims of systemic visa fraud
Premium
Bangalore: Infosys Ltd, India’s second largest software exporter, has agreed to pay $34 million (around ₹ 210 crore) to settle the US government’s claim that it violated the country’s visa laws—making it the largest immigration fine ever imposed on an offshore firm.
Infosys conceded that it failed to maintain accurate immigration records—known as I-9 records—for many of its US employees in 2010 and 2011 as required by law. I-9 forms are used by a company to verify employee identities and establish that they are eligible to be employed in the US.
“Infosys failed to maintain accurate I-9 records for many of its foreign nationals in the United States in 2010 and 2011 as required by law," states the settlement document, which Mint has reviewed.
“During that period, Infosys did not accurately complete a Form I-9 Employee Eligibility Verification Form for many persons that it employed in the United States and did not properly maintain I-9 forms, including a widespread failure to update and re-verify the employment authorization status of a substantial percentage of its foreign national employees," it says.
The US government had accused Infosys of “knowingly and unlawfully" using short-terms visas—or B-1 visas—to fill positions that required long-term or H1B visa holders, to gain a competitive advantage. H1B visas currently cost up to $4,300 each, while B-1 visas cost $200. All other charges, except the I-9 allegations, have been dismissed.
While this ruling might not affect Infosys in terms of future additional visa-related costs, experts say the settlement could direct more focus on the US’ proposed immigration law and the use of work visas, directly affecting Indian technology companies.
“I think that the US government will probably scrutinize B-1 visas more to make sure that they are not being used for workers to work at client sites—not just for Infosys but for other companies as well. In terms of future visa related costs, the H-1B visa costs are already high and will be higher if immigration reform Bills are passed," said Neil Ruiz, a senior policy analyst at The Brookings Institution, a Washington-based think-tank.
If the Immigration Bill is passed, each H1B visa application could cost up to $5,000 more, pushing up the cost of doing business in the US for Indian technology companies and affecting their business models. The proposed immigration law has already been passed in the US Senate and is awaiting approval in the US House of Representatives.
Infosys, which had set aside $35 million as legal costs for the federal investigation in its September-quarter earnings, said it agreed to pay the fine to resolve the allegations arising from “historical I-9 (visa) paperwork errors from 2010-2011 that Infosys began correcting before the investigation began".
Infosys, which has agreed to resolve the issue with the US department of state, the immigrations and customs enforcement and the US department of homeland security, denied committing any visa fraud to gain a competitive advantage and said the settlement would not impact its eligibility for future US government contracts.
“There were no criminal charges or court rulings against the company. Furthermore, there are no limitations on the company’s eligibility for federal contracts or access to US visa programmes as a result of the settlement," the company said in a statement on Wednesday.
It also said there was no evidence that the visa violations allowed any Infosys employee to work beyond their visa authorization.
“Infosys denies and disputes any claims of systemic visa fraud, misuse of visas for competitive advantage, or immigration abuse. Those claims are untrue and are assertions that remain unproven. The company’s use of B-1 visas was for legitimate business purposes and not in any way intended to circumvent the requirements of the H-1B programme. Only .02% of the days that Infosys employees worked on US projects in 2012 were performed by B-1 visa holders," the company said.
On Tuesday, the Wall Street Journal had reported that Infosys would be fined $35 million, the largest immigration fine ever, by the US government on claims that the Bangalore-based outsourcing firm illegally placed employees on visitor visas, and not work visas as companies are supposed to.
This is not the first time Infosys has been investigated for visa misuse. In August, a US-based IT professional, Brenda Koehler, filed a lawsuit against the company, alleging that it discriminated against job applicants in the US by preferring to hire workers from South Asia to fill positions in the US.
Last year, Infosys received a lawsuit from a former employee alleging visa fraud. In December, a US court dismissed the lawsuit filed by Satya Dev Tripuraneni. Prior to that, a US employee, Jack Palmer, filed a lawsuit alleging Infosys had harassed him after he reported instances of business visa fraud.
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
