New York Attorney General (AG) Eric T Schneiderman has announced a $1 million settlement with Infosys for failing to properly compensate hundreds of workers, pay applicable taxes and systematically abusing the United States visa rules in placing foreign workers at client sites in New York State. “We will not permit companies to violate our laws in order to undercut New York workers. My office is committed to ensuring that our state’s labor marketplace is fair, competitive and transparent for all,” said Attorney General Schneiderman in a press release. Infosys which generates more than 60% of its revenue from US has a significant presence in New York State and provides consulting and outsourcing services to many New York-based clients in the financial sector, among other industries. This investigation by the AG’s office was carried out following a claim made by a whistleblower.
According to the Attorney General office, Infosys in order to circumvent the difficulty and expense of obtaining H-1B visa, knowingly and unlawfully obtained temporary visitor visas (B-1 visas) instead. B-1 visas are much easier to obtain. Because they apply only to visits, B-1 visa holders are not permitted to perform work of the kind Infosys workers were sent to New York to do, and they are not subject to the H1-B prevailing wage requirements. Infosys workers using B-1 visas were doing work that would otherwise have been performed by US citizens or H1-B visa holders, and were paid significantly less than what comparable US workers or H1-B visa holders would have been paid in the same positions, the press release said. Consequently, New York was deprived of taxes that should have been paid on the higher wages that Infosys avoided by its misconduct, it said.
The AG’s office also concluded that Infosys provided instructions to employees on B-1 visas on how to deceive US consular officials. It also submitted false information of the correct purpose of the employee’s visit. “Infosys knowingly and unlawfully obtained temporary visitor visas (B-1 visas) instead,” it said. “As a result of this conduct, in addition to securing employment of foreign workers at a much lower wage than applicable prevailing wage requirements, Infosys also avoided paying applicable payroll taxes on the wages of the foreign workers it improperly placed at New York client sites,” the AG’s office said.
This is the second time that Infosys has paid a fine to the US authorities for failure to comply with the law. It had in 2013 settled into a $34 million agreement with the US justice department for alleged misuse of the employment visas.