Infosys' visa-related costs jump over 50% at Rs 308cr in FY'13

 Stricter norms and higher rejection rate of work permits have pushed up the visa-related cost of country's second largest software services company, Infosys by more than 50 % to Rs 308 crore in 2012-13 fiscal.

According to Infosys' Annual Report 2012-13, the company's overseas travel expenses included visa charges of Rs 308 crore for year 2012-13.

Compared to visa charges of Rs 202 crore in 2011-12, the cost of work permits for the company has gone up by 52.4%, the report said.

 
Difficult visa norms are adversely impacting the operating margins of the Indian IT players, who get close to 80 % of their revenues from the US and Europe.

With increase in rejection rates, companies often apply for more number of visas, pushing their visa-related costs higher, the annual report said.

The overseas travel expenses for Infosys was also higher at about 2.7 % (or about Rs 992 crore) of its total revenue of Rs 36,765 crore for the fiscal 2012-13, compared to 2.2 % (over Rs 687 crore) in the year ended March 31, 2012.

The company, which had faced allegations of visa misuse in the past, has said that it was in discussion with the US Attorney's Office on the subpoena it received from a US District Court in 2011.

"In light of the fact that, among other things, the foregoing investigation and review may not be complete and we remain in discussions with the US Attorney's Office regarding the matters," Infosys said in its report.

The IT major had received a subpoena (a writ requiring appearance in court to give testimony) from a grand jury in the US District Court for the Eastern District of Texas, requiring it to provide certain documents and records related to sponsorships and use of B-1 visas.

In addition, the US Department of Homeland Security has reviewed its employer eligibility verifications on Form I-9, which found errors in "significant percentage" of the forms.

 

(DHS) may impose fines and penalties on us related to such alleged errors. At this time, we can not predict the outcome of the discussions with the DHS or other governmental authority regarding the review of our Forms I-9," it said.

Form I-9 is used by an employer to verify an employee's identity and to establish that the worker is eligible to accept employment in the US and every employee hired has to complete an I-9 form at the time of hire.

Failing to comply with Form I-9 requirements has a penalty of $ 110 (minimum) to $ 1,100 (maximum) for each form.

Last year, Infosys won the case against its former employee Jack Palmer, who had alleged that the company was misusing B-1 visas.