TCS, Infosys faces visa violation probe in USA

BUSINESS » INDUSTRY
Published: June 12, 2015 23:28 IST | Updated: June 12, 2015 23:28 IST
BENGALURU, June 12, 2015

India’s largest and the second largest IT services companies, TCS and Infosys, have come under the scanner of a U.S. investigation team.

According to media reports, the U.S. Department of Labor has opened a probe against the two companies for alleged H1­B visa rule violations.

According to industry experts, the U.S. investigation is an indication of stricter and more stringent rules for onsite workers in the U.S.

According to the New York Times (NYT) on June 11, “The Department of Labor has opened an investigation into two India­based outsourcing companies for possible violations of rules for visas for foreign technology workers under contracts they held with an electric utility, Southern California Edison.”

Of late, Indian IT services companies have been facing the heat in the U.S. for alleged H1­B visa violations. This particular visa is a nonimmigrant one that allows American companies to employ foreign workers in highly skilled jobs. Indian outsourcing companies are the largest recipients of this kind of visa, and for Infosys and TCS, more than 60 per cent of their revenue comes from the U.S. market.

The NYT report further said that Southern California Edison had recently laid off more than 500 technology workers, many of whom claimed they were made to train their replacements who were immigrants on the temporary work visas brought in by the Indian firms.

When contacted Infosys said, “Infosys is committed to complying with U.S. immigration laws. The U.S. Department of Labor (DOL) regularly selects a percentage of visa and labor condition applications for extra scrutiny in this industry, and we work closely with the DOL to assist
them in this activity in the ordinary course of our business. We have received no indication of any broader investigation of Infosys visa practices.”

The investigation from the Labor Department comes as a blow to Infosys, after a U.S. district court dismissed the company’s plea to dismiss a case filed against the company.

Last month, the U.S. court accepted a case filed by four American IT workers alleging Infosys of showing discrimination in hiring.

In October 2013, the Bengaluru­based company had paid around $34 million as settlement amount for settling a visa­related issue with the U.S. government.

Meanwhile, TCS which is also facing the investigation, said in an email, “TCS maintains rigorous internal controls to ensure we are fully compliant with all regulatory requirements related to US immigration laws including those related to H­1B visas.”

The new investigation comes at a time when Steven Heldt, a former TCS employee has filed a suit in San Francisco Federal Court accusing TCS of favoritism towards Asian workers.