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2:18 pm
Tue October 29, 2013

Infosys Expected To Pay $35M Fine For Alleged Work Visa Fraud

Indian software giant and outsourcing firm Infosys is expected to pay a $35 million fine to settle visa fraud charges — the largest fine of its kind in United States history.

The government is expected to announce tomorrow that a joint investigation by the State Department and the Department of Homeland Security found that the Indian company gamed the immigration system in order to increase company profits.

Infosys, which is the world’s second-largest software exporter, allegedly used inexpensive B-1 visas instead of harder-to-receive and more expensive H-1B work visas for employees based in the U.S. for long-term assignments.

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Transcript

ROBIN YOUNG, HOST:

From NPR and WBUR Boston, I'm Robin Young. It's HERE AND NOW.

The Indian outsourcing firm Infosys is expected to pay a $35 million fine after allegations that it gamed the U.S. immigration visa system. This is the largest fine of its kind in U.S. history. Infosys is a massive tech company with 157,000 employees worldwide. It's accused of using the short-term cheaper B-1 visas for workers who actually were working long term and should have been on the harder-to-get H-1B visas.

Jason Bellini is with The Wall Street Journal. And, Jason, first of all, why would Infosys do it? What was in it for Infosys to do this?

JASON BELLINI: Hi, Robin. Well, what this allowed them to do allegedly was to undercut the competitors. They're able to bring in foreigners and pay them less than they'd have to shell out for American workers to do the same work. And they were also to get - able to get these B-1 visas, which are supposed to be only for foreigners attending business conventions, for meetings or install machinery, get them for an unknown number of employees - and allegedly - and not have to pay them what they would otherwise had to pay them, and also save on what it really costs to get a visa for a legitimate worker who's coming to the United States.

YOUNG: Well, and we said that the H-1B visas who are longer-staying workers, those visas are harder to get? Why? There's a cap, we understand, involved?

BELLINI: Well, there is a cap on it, and it's a controversial one. It's actually been in discussion in Senate - in the Senate debate over immigration reform. You've got tech companies that have been lobbying aggressively to change this. Companies like Amazon and Microsoft. They claim they don't have enough workers, and they want to see more H-1B visas.

Now, the Senate version of the immigration reform bill passed would make 110,000 H-1B visas available each year. Right now, there's only 65,000, and it constrains the use of those visas that make it possible for Indian companies to bring more people under those visas. So it actually says that if a company has more than 75 percent of its U.S.-based employees on that type of visa, the H-1B visa, they'll be unable to apply for more visas. So these Indian companies are not thrilled with what's in the Senate version of immigration legislation.

YOUNG: Well, meanwhile, this allegation - and you keep underscoring that, although they are paying this huge fine - this allegation that Infosys was going with the easier-to-get no cap B-1 visas came to the public's attention back in February of 2011 with Jay Palmer, an Infosys consultant, started interacting more and more with these visiting employees. Here's what he told CBS News.

(SOUNDBITE OF ARCHIVED BROADCAST)

JAY PALMER: I had an employee over from India that had been over several times before, and he came up to me, and he was literally in tears. He told me he was over here illegally. He didn't want to be here. He was worried that he would get caught.

YOUNG: So it was one of the workers actually blowing the whistle, but Palmer went on to say that these workers brought over on these B-1 visas said on their visa applications that they had specialized expertise. Was that true? Again, the accusation, the allegation is that Infosys was doing this to, you know, end-run American jobs. Was part of that saying that people had specialized expertise that they didn't?

BELLINI: Well, you know, it's interesting, because his allegations sparked the investigation into Infosys. It's now costing them $35 million - probably being announced tomorrow. Let me read to you what he also shared with the Senate Judiciary Committee on Immigration back in 2011. He said: I constantly complained that Infosys was sending me freshers, quote-unquote, "freshers" - on H-1B visas. A fresher is a common Indian term for a person with no experience or specialized talent, usually just out of college.

Now, Mr. Palmer has said that the company would send over whatever fresher got the visa first. So, I mean, it's also important to note that Mr. Palmer's suit emphasis for harassment and for breach of contract. The federal judge dismissed that case, but his attorney says he's been cooperating with the investigation.

YOUNG: Well, we're going to hear more about this and maybe find out if it's more widespread than the allegations, which they still just are against Infosys.

Jason Bellini of The Wall Street Journal, thanks so much.

BELLINI: Thank you.

YOUNG: You're listening to HERE AND NOW. Transcript provided by NPR, Copyright NPR.

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