Indian IT services giant Infosys is bracing itself for a $35 million (£22m) fine from the US government for visa irregularities, in what will be the largest financial penalty ever handed out for an immigration infraction.
The fine, expected to be announced later today, comes after a Department of Homeland Security and State Department investigation into Infosys, according to Wall Street Journal.
The Indian IT giant is apparently being accused of routinely using B-1 visas for offshore workers to come to the US to service clients, rather than the harder-to-obtain H-1B visa.
B-1 visas, which cost $160 (£100) a pop, are technically intended for those attending conferences or other short business-related trips, while H-1Bs are valid for three years but can take months to process and cost up to $5,000 (£3,116) each.
As a result of its visa policy, it is alleged that Infosys managed to undercut its rivals in bidding for work on US soil.
The dispute can be seen in context of an on-going debate in which US interests complain that companies like Infosys are cheating the visa system by bringing cheap labour in from abroad on B-1 visas for long-term stays, rather than employing more expensive local workers.
Back in August, a lawsuit filed in the US District Court in Eastern Wisconsin by VMware specialist Brenda Koehler, alleged just this. It claimed that 90 per cent of Infosys US hires are not local and that the firm abused the B-1 visa system.
Allegations of discrimination against US staff were also made by ex-employee Jay Palmer, who brought a failed legal action against the firm. He claimed Infosys told staff to falsify letters of invitation to events to ease the B-1 application process.
On the other side, however, India’s outsourcers have complained that it is US immigration policy which is discriminatory.
There are currently only around 65,000 H-1B visas available each year which is often not enough and plans afoot could restrict that number even more.
NASSCOM president Som Mittal argued back in June that Indians working for the country’s outsourcing giants in the US have contributed over $15bn in taxes and social security payments over the past five years.
He said at the time that the proposed Border Security, Economic Opportunity and Immigration Modernization Act places “restrictions on our ability to service our customers and prevents our ability to have a level-playing competition in the US”. ®