The US Department of Labor has announced an investigation against Indian IT majors Tata Consultancy Services (TCS) and Infosys for possible violations regarding the use of H-1B visas. However, both the companies on Friday denied any deviation from the regulations.
The probe was launched following reports that the two companies had displaced US employees in their IT outsourcing contracts with an American corporation, replacing them with cheaper resources from India, thereby allegedly violating labour regulations.
A TCS spokesperson in an e-mailed response to FE said, “TCS maintains rigorous internal controls to ensure we are fully compliant with all regulatory requirements related to US immigration laws, including those related to H-1B visas.”
A Infosys statement said: “The US Department of Labor (DOL) regularly selects a percentage of visa and laboor condition applications for extra scrutiny in this industry, and we work closely with the DOL to assist them in this activity in the ordinary course of our business. We have received no indication of any broader investigation of Infosys visa practices,” it said.
Media reports in the US have alleged that TCS and Infosys had displaced American IT employees from Southern California Edison, a utility firm where these companies had bagged outsourcing contracts, and replaced them with Indian professionals. Besides, there were also reports that American workers were displaced at Disney Corporation.
Indian IT services companies have long been the largest recipients of non-immigrant H-1B work visas, leading to intense scrutiny by lawmakers and other public bodies. The prevalent notion in the US is that Indian IT companies regularly replace American tech workers with lower-cost resources from India. The Indian companies have steadfastly denied any violations of US labour regulations while using H-1B visas, pointing to the existing demand-supply mismatch in America.
The Indian IT industry trade body, Nasscom, in response to these latest developments, said, “We believe that Indian IT companies have been and will remain compliant with all US visa regulations… In a recent investigation, in respect of one Indian company, they had shared all information sought by US authorities and we are given to understand that no instance of violations or wrong doing was found.”
The $146-billion Indian IT industry has long relied on H-1B visas to execute its contracts, but there is a move to put more stringent conditions on the use of H-1B visas through provisions in the proposed immigration bill.
Sanjoy Sen, doctoral research scholar, Aston Business School, UK, said, “What is also quite clear is the organised backlash against the cost-effective deep tech skills that India has to offer… Regulatory compliance management specifically including immigration will continue to feature among top concerns of global CEOs of these organisations.”
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