US visa fraud: Infosys on tight leash, others too under scanner

The US Immigration and Customs Enforcement agency is gearing up to investigate other Indian IT companies after Infosys agreed to pay $34 million to end a US investigation related to the widespread practice by Indian firms of flying workers to client sites in the United States on temporary visas.<br /><br />

FP Staff November 05, 2013 13:17:25 IST
US visa fraud: Infosys on tight leash, others too under scanner

The US Immigration and Customs Enforcement agency is gearing up to investigate other Indian IT companies afterInfosys agreed to pay $34 million to end a US investigation into alleged visa fraud by the company.

"There are offshoot investigations underway to look for similar misdeeds at some other companies," Karl Rusnock, a spokesperson of the US Immigration and Customs Enforcement agency, was quoted as saying by The Economic Times.

The US investigationcentered on the Indian IT service provider's procurement of B-1 visas designed to allow foreigners visit the US for short periods for things like meetings, contract negotiations or short-term training.It is, therefore, not subject to all the regulations and scrutiny applied to the H-1B visa, receiving relatively cursory interrogation.

US visa fraud Infosys on tight leash others too under scanner


Former Infosys employee Jack "Jay" Palmer had sued Bangalore-based Infosys, accusing the outsourcer of using the B-1 visa to bring its Indian employees to perform software development, quality assurance and testing for US clients.

The US justice department had alleged that Infosys knowingly and unlawfully sent people to work without proper visas, that there were widespread failures in the company's record-keeping and that the company tried to deceive US consular officials with false "invitation letters", which tell the government the purpose of travel.

Documents retrieved by the investigation revealed that Infosys not only provided fake "invitation" letters to the workers but also provided them with instructions on how to lie to US immigration officials when they were being questioned.

Meanwhile, Infosys has been kept on a tight leash by the US, though the company has not admitted to any wrongdoings in the visa fraud case.

According to another report in the ET, Infosys will have to hire an independent third-party auditor to review the company's compliance with the US visa rules over the next two years. The company has said this in a filing to the US Securities and Exchange Commission.

The auditor will do random checks on Infosys' Indian employees in the US to find out whether they have complied with the eligibility verification.

This will not only ensure that Infosys is far more careful in the future but India's other leading IT majors-TCS, Infosys, Wipro, HCL Technologies -, which are the largest players depending on the work visas to service clients in US, will also be cautious to not flout these norms.

"It is likely to add more fuel to the ongoing debate around visa reforms," Chirajeet Sengupta, practice director in Mumbai at Everest Group, which advises clients on technology vendors, told Reuters.

"These reforms, if executed, have the potential to impact Indian service providers' landed resource model that is largely driven by access to H-1B visas in large numbers," he said.

According to a report in The Indian Express,IT majors are already hedging against vagaries arising from the changes in immigration laws by increasing their onsite presence even though it adds to cost.

While HCL Technologies plans to considerably increase its headcount outside India to 25 percent in the next two years from the current 18 percent, Wipro increased its onsite component to 54.2 percent in the second quarter ended September 30 from 53.9% in the trailing quarter, the Express report noted.

Secondly, the US immigration bill includes a number of provisions that will make it much harder for the offshore outsourcing firms, mostly based in India, to use large numbers of workers holding H-1B or L-1B visas. Since the intent of the bill is to these restrictions is to create US jobs, offshore IT firms have little choice but to increase onshore hiring.

So if the bill is adopted,visa dependent firms, those with 15% of more of their workforce on H-1B and L-1 visas, won't be able send visa holding workers to client sites, although they can continue to offer services out of global delivery centers. This could potentially pull workers from a customer site, IT research firm Gartner has warned.

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