Indian Outsourcer Infosys Eyed For Visa FraudIndian Outsourcer Infosys Eyed For Visa Fraud

IT Salaries: 9 Ways We've Changed From 2001

The heat is mounting on Infosys amid allegations that the India-based outsourcer is misusing visa rules to circumvent caps that govern the number of tech workers that can be brought into the U.S. and the salaries they must be paid.

"The courts will decide if the activities of Infosys were illegal. But I can definitely say their actions don't comport with the spirit of the law," said U.S. Senator Chuck Grassley (R-Iowa), in testimony before the Senate Subcommittee on Immigration, Refugees and Border Security.

Grassley, who spoke late last month, was referring to a lawsuit in which a U.S. tech worker claims Infosys routinely brought workers into the country from India on B-1 visas, which are meant to be used only for work assignments that require employees of foreign companies to be in the U.S. on a short-term basis.

Jack "Jay" Palmer, who was an Infosys consultant, claims that at management meetings last year in Bangalore Infosys officials expressed the need to "creatively" get around H-1B restrictions, which require companies to pay foreign workers a wage that's in line with average U.S. salaries for a particular job. The H-1B program is also capped at 65,000 workers, per year.

"During one of the meetings, Infosys management discussed the need to, and ways to, 'creatively' get around the H-1B limitations and process and to work the system in order to increase profits and the value of Infosys' stock," Palmer charged in papers filed earlier this year in circuit court in Alabama.

"Infosys was sending lower level and unskilled foreigners to the United States to work in full-time positions at Infosys' customer sites in direct violations of immigration laws," Palmer alleged. "Infosys was paying these employees in India for full-time work in the United States without withholding federal or state income taxes [Palmer] also learned that Infosys overbilled its customers for the labor costs of these employees," he claimed.

An Infosys spokesman said the company has reevaluated its visa program, but denies it's guilty of systematically abusing B-1 visas.

"We take very seriously our obligations under the law and specifically our responsibilities to comply with the immigration laws and visa requirements in all the jurisdictions where we have clients. We have made changes in our policies regarding immigration and visa requirements and we will continue to improve such policies as necessary to maintain the absolute best practices for compliance," the spokesman said.

But the allegations against Infosys have caught the eye of U.S. authorities. In an SEC filing, Infosys confirmed that on May 23 it received a grand jury subpoena from the U.S. District Court in Eastern Texas, seeking "documents and records related to the Company's sponsorships for, and uses of, B1 business visas." Infosys said it "intends to comply with the Subpoena and to cooperate with the Grand Jury's investigation."

While the lawsuit and investigations against Infosys remain ongoing, a debate rages that pits employers of tech workers, from Microsoft to Citicorp, against U.S.-born IT pros. The companies claim there's a shortage of skilled help in key areas like cloud and mobility, while workers' advocates insist such claims are merely an excuse to import cheap labor from India, China, and other developing nations that are producing computer science and engineering graduates in vast numbers.

See the latest IT solutions at Interop New York. Learn to leverage business technology innovations--including cloud, virtualization, security, mobility, and data center advances--that cut costs, increase productivity, and drive business value. Save 25% on Flex and Conference Passes or get a Free Expo Pass with code CPFHNY25. It happens in New York City, Oct. 3-7, 2011. Register now.