Infosys pays $34 mn fine to settle US visa row

In what may be termed as the heaviest immigration fine slapped by the US government against an outsourcing firm, Indian IT bellwether Infosys Ltd Wednesday agreed to pay $34 million (Rs.208 crore).

The amount is the fine imposed on the firm to settle a visa row it was embroiled in over the last two years.

"We have agreed to pay $34 million to resolve all allegations for which we have taken a reserve of $35 million, including attorney's fee," the $7.4-billion global software major said in a statement here.

The settlement is related to Immigration-9 (I-9) paperwork errors in 2010-11. The company began correcting the errors before the probe began.

Overseas firms sending employees to the US for onsite work for their clients have to complete the I-9 form to verify the identity and employment authorisation of each employee coming to the US on a specific visa like H1-B.

Infosys, however, maintained that there was no evidence that the I-9 paperwork violations allowed its employees to work beyond their visa authorisation.

"As reflected in the settlement, we deny and dispute any claim of systemic visa fraud, misuse of visas for competitive advantage, or immigration abuse. Those claims are untrue and are assertions that remain unproven," the statement noted.

Asserting that the use of B-1 visas was for legitimate business purposes and not intended to circumvent the requirements of the H-1B programme, the company said only 0.02 percent of the days that its employees worked on US projects in 2012 were performed by B-1 visa holders.

"Our policy demands adherence to all laws, rules and regulations everywhere we operate, and we take our compliance obligations seriously," the statement pointed out.

The US immigration authorities issues B-1 visas for short-term visits to attend business seminars and restrict employees from engaging in gainful employment during their stay.

In the settlement agreement, the US government, however, acknowledged that Infosys demonstrated a commitment to compliance with the immigration laws through its current visa and I-9 practices.

"The settlement removes uncertainty of prolonged litigation and allows us to focus on delivering measurable results for our clients," the statement added.

Clarifying that there were no criminal charges or court rulings against it, the company said there were no limitations on its eligibility for federal contracts or access to US visa programmes following the settlement.

An overseas employee with an H-1B visa can remain in the US for at least three years and is paid locally, while their companies withhold federal and state income tax.

The US issues about 65,000 H-1B visas a year at $5,000 per employee, including $2,000 in filing and legal fee.

The US departments of Justice and Homeland Security carried a joint investigation after the Eastern District court in Texas served a legal notice May 23, 2011 on the company, alleging misuse of B-1 visa norms by it in the past.

In a regulatory filing to the U.S. SEC (Securities and Exchange Commission) in June 2011, the company admitted that any action by the US government against it in this regard would seriously affect its business in the North America market, which accounts for about 60 percent of its export revenue.