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Carl Shusterman's Immigration Update

Indian IT Company Agrees to Pay $34 Million Settlement

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Various companies have paid one million dollars or more to the government in order to settle cases involving immigration violations. However, the $34 million settlement that an Indian IT company recently agreed to pay is the largest yet.

What did the company do to bring this on itself?

The U.S. Attorneys’ Office in the East District of Texas accuses Infosys, a multi-billion dollar company based in India, of misusing B-1 business visitor visas to place foreign-born employees in professional jobs in the United States.

USCIS.gov states that persons on B-1 visas are permitted to come to the U.S. to engage in any of the following activities:

  • Consulting with business associates
  • Traveling for a scientific, educational, professional or business convention, or a conference on specific dates
  • Settling an estate
  • Negotiating a contract
  • Participating in short-term training
  • Transiting through the United States
  • Certain air crewmen may enter the U.S. as deadhead crew with a B-1 visa


However, in order to work as a computer programmer or a systems analyst in the U.S., a person must usually possess an H-1B visa. Most H-1B employers are subject to a numerical cap which, in practice, allows them to sponsor professional employees only during the first week of April each year. Also, applying for an H-1B worker involves an expenditure of several thousand dollars in attorneys’ fees and government filing fees.

Infosys employs over 160,000 workers in more than 30 countries. Approximately 15,000 of these workers are employed in the U.S. 10,800 have H-1B visas and 1,600 have L-1B specialized knowledge visas. According to a confidential source, the number using B-1 visas is about 1,000. The company claims that it uses B-1 visas only for “legitimate business purposes”.

In the settlement agreement, the government and Infosys essentially agree to disagree. The government states that the company provided their B-1 workers with a memorandum which instructed them “to deceive U.S. Consular Officials, including specific instructions to avoid certain terminology, to secure entry of the visa holder in the United States." Infosys, despite agreeing to pay the government $34 million, "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 matter began as a whistleblower case brought by a disgruntled employee. A civil lawsuit by the employee was dismissed. However, in 2011, the B-1 issue raised by the employee led the Department of Justice and the DHS to audit Infosys’ I-9 forms.

This settlement does not subject Infosys to any civil or criminal judgment. It allows the company to continue to supply IT professionals to U.S. firms and to be eligible for federal contracts.

Although $34 million sounds like a lot of money to you and me, given that Infosys’ market capitalization exceeds $30 billion, the settlement amount is simply “chump change” for the company. Indeed, news of the settlement had little effect on the company’s stock price. And making the payment certainly beats spending time in Federal Prison.

However, this is should be a cautionary tale for any employer thinking of toying with U.S. immigration laws, especially those who don’t have a rainy day fund of several millions of dollars to tap. U.S. Attorney John Bales made the point succinctly: “We want other companies like Infosys to be on notice that we will be looking.”

Also, the settlement may aid lawmakers in the House who are trying to limit the use of H-1B and L-1B visas by IT consulting firms in rounding up the necessary votes to do so. The Senate bill (S.744) already contains such a provision.

Employers beware!

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Updated 12-02-2013 at 12:08 PM by CShusterman

Comments

  1. Lynn Atherton Bloxham's Avatar
    So the message from our government now is (and I would expect it to replace the message currently on the Statue of Liberty)

    1. You are really not wanted regardless of your work ethic or skills
    2. We have the time and money to be the all seeing over arching totalitarian State.
    3. This goes for all you businesses also. No matter how convoluted our laws are or how difficult to interpret, let alone follow, you will be punished.

    A travesty of injustice.
  2. Ronald Nair's Avatar
    Infosys incident has done enormous harm to any foreign company applying for a B-1/2 visa abroad. I do NOT blame consulates India to be excessively tough in the future when reviewing B-1 applications from any company coming out of India given the chicanery that Infosys did. If Infosys did not do anything wrong then why did it agree to pay $34 Million fine ?? The management of this company, given its stature and position in the Indian software industry, should be ashamed! They tried to push the limits B-1 regulations and laws in order to make a quick buck and got burned. My message to Infosys and everyone else is to FOLLOW the law and that means run your business by dealing with H-1B cap and NOT pull off these so called "novel" immigration chicanery schemes on mis using the B-1 visas!
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