Infosys to settle US work visa case
by Kartikay Mehrotra,
2013-10-30 05:30:13.0
NEW DELHI — Infosys is preparing to pay about $35m to avoid restrictions on its use of US work visas under a potential resolution of the company’s use of entry permits, says a person with direct knowledge of the talks.
The company reached a settlement with the US Attorney’s Office for the eastern district of Texas that will be announced on Wednesday, sources said on Monday.
Infosys, India’s second-largest software exporter, received a federal grand jury subpoena seeking records related to its sponsorships for B-1 business visas and its use of them, according to an October 11 regulatory filing.
The company and some of the employees are targets of the investigation, according to the filing. Infosys said it was co-operating with the probe. The Bangalore-based firm also said it had reserved $35m for a settlement tied to the investigation and that it was engaged in talks to resolve the matter. "The resolution has not been finalised," according to Tuesday’s statement.
The company resolved two whistle-blower cases in Alabama and California in the past 14 months after employees alleged it misused B-1 visas, which are temporary business permits, to avoid limits on H-1B employment visas, which allow US employers to temporarily employ foreign workers in speciality occupations.
Proposed changes to immigration laws in Congress, which would limit the ability of large Indian companies to access H-1B visas, may damage Infosys’s business model of relying on North America for more than 60% of its revenue.
"This investigation has been on since 2011, so any damage to the company’s reputation is already done," said Ankur Rudra, a Mumbai-based analyst with Ambit Capital.
"Now they get on with business, which may be a little more expensive going forward in terms of finding talent, but the result could have been worse," he said.
The information-technology industry was spending about 25% to 30% more for on-site workers as H-1B visas become more difficult to attain, Mr Rudra said.
Companies, including Infosys, are losing about 1% of their annual revenue by subcontracting employees instead of sending cheaper labour from India to work face to face with their clients in lieu of obtaining visas, he said.
The Infosys settlement with the US was reported earlier by the Wall Street Journal.
Bloomberg
Infosys CE S.D. Shibulal speaks during the announcement of the company's quarterly financial results at their headquarters in Bangalore, India, earlier this month. Picture: REUTERS
NEW DELHI — Infosys is preparing to pay about $35m to avoid restrictions on its use of US work visas under a potential resolution of the company’s use of entry permits, says a person with direct knowledge of the talks.
The company reached a settlement with the US Attorney’s Office for the eastern district of Texas that will be announced on Wednesday, sources said on Monday.
Infosys, India’s second-largest software exporter, received a federal grand jury subpoena seeking records related to its sponsorships for B-1 business visas and its use of them, according to an October 11 regulatory filing.
The company and some of the employees are targets of the investigation, according to the filing. Infosys said it was co-operating with the probe. The Bangalore-based firm also said it had reserved $35m for a settlement tied to the investigation and that it was engaged in talks to resolve the matter. "The resolution has not been finalised," according to Tuesday’s statement.
The company resolved two whistle-blower cases in Alabama and California in the past 14 months after employees alleged it misused B-1 visas, which are temporary business permits, to avoid limits on H-1B employment visas, which allow US employers to temporarily employ foreign workers in speciality occupations.
Proposed changes to immigration laws in Congress, which would limit the ability of large Indian companies to access H-1B visas, may damage Infosys’s business model of relying on North America for more than 60% of its revenue.
"This investigation has been on since 2011, so any damage to the company’s reputation is already done," said Ankur Rudra, a Mumbai-based analyst with Ambit Capital.
"Now they get on with business, which may be a little more expensive going forward in terms of finding talent, but the result could have been worse," he said.
The information-technology industry was spending about 25% to 30% more for on-site workers as H-1B visas become more difficult to attain, Mr Rudra said.
Companies, including Infosys, are losing about 1% of their annual revenue by subcontracting employees instead of sending cheaper labour from India to work face to face with their clients in lieu of obtaining visas, he said.
The Infosys settlement with the US was reported earlier by the Wall Street Journal.
Bloomberg
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