Subscribe / Unsubscribe Enewsletters | Login | Register

Pencil Banner

Infosys ran 'unlawful' visa scheme, U.S. alleges in settlement

Patrick Thibodeau | Oct. 31, 2013
Infosys to pay $34M in settlement, but disputes all claims

The person who triggered the investigation was Jay Palmer, an Infosys employee and Alabama resident who filed a lawsuit against the outsourcing company that drew attention to its use of the B-1 visa.

Palmer said that after he refused to participate in a plan to use B-1 visa workers for jobs requiring H-1B workers, he was threatened and harassed. Palmer's case in federal court didn't make it to trial, because of provisions in Alabama's "at-will" employment law. In dismissing the case, U.S. District Court Judge Myron Thompson, nonetheless made it clear that the alleged threats against Palmer were "deeply troubling," but the judge said he couldn't rewrite state laws. The case didn't touch on visa law, which is what a Texas grand jury was looking into.

Palmer's attorney, Kenneth Mendelsohn, said Palmer "was the guy who had the courage to stand up.

"There were many people in Infosys that knew this was going on and just turned the other cheek," said Mendelsohn, "and Jay, just morally could not do that, even at the risk of harassment and threats of that nature."

Palmer gives credit to the federal investigators. "Today is not about me, today is about Ed Koranda, and Tim Forte and the U.S. government and their findings and enforcement of the law," said Palmer, in an interview, referring to the two special agents who investigated the case.

Palmer also said that he "harbors no hard feelings" toward Infosys executive Chairman Narayana Murthy. "I only wish he would have reached out to me over the last 2.5 years," he said.

"What people don't understand is I tried to fix the problem before I got an attorney, before I turned them in," Palmer said.

The settlement doesn't affect Infosys' future ability to obtain visas. But it's unclear whether this agreement is the end of problems for Infosys.

The government's settlement said that Infosys circumvented visa law "for the purposes of increasing profits, minimizing costs of securing visas, increasing flexibility of employee movement, obtaining an unfair advantage over competitors, and avoiding tax liabilities." These allegations could invite a closer look from the Internal Revenue Service or the U.S. Securities and Exchange Commission.

Infosys, as part of the settlement, also agreed to improve its visa compliance procedures.

Ron Hira, a public policy professor at the Rochester Institute of Technology and a researcher on tech immigration issues, points out that the $34 million settlement represents a "mere 2% of Infosys profits of $1.7 billion last year."

"Hopefully, policymakers and journalists don't draw the conclusion that the 'system works' because Infosys has settled," Hira said. "Instead, they should see this for what it is -- one small indication of the vast extent to which firms are exploiting loopholes in the visa programs to bring in cheaper foreign workers to displace and undercut American workers."

 

Previous Page  1  2  3  Next Page 

Sign up for CIO Asia eNewsletters.