Infosys faces record fine for gaming US work visa system

Global outsourcer falls foul of hot-button immigration and IT skills shortage arguments in the US

India outsourcing giant Infosys is facing a record immigration fine by US regulators who say the firm has been gaming the visa system to import its IT workers on the cheap.

According to published reports, the US State Department this week is expected to slap the outsourcer with a $35m (£28m) fine, the largest ever levied by the agency.

The punishment comes after a joint State Department and DHS investigation found multiple instances of Infosys using cheap and easy-to-acquire B-1 short-term business visitor visas to get workers into the US.

Infosys opted for the B-1s, which cost about $160 and are good for 90 days, instead of applying for the appropriate H-1B foreign worker visas that require a lengthy processing period and can cost as much as $5,000 per worker, and allow stays of up to three years.

Only 65,000 H-1B visas are issued annually, while the B-1 visas are largely unrestricted.

The probe comes at a time of heightened awareness in the IT and software development industries, where critics allege that firms like Infosys are flooding the American market with cheaper labour -- which some argue displaces US technology workers.

"This complaint and large settlement should be a wake-up call to all employers that the government is serious about enforcing the H-1B visa regulations," said Stephen Yale-Loehr, a Cornell University immigration-law professor in a Wall Street Journal report.

In an email to Reuters, an Infosys representative said the company is talking with the US Attorney's Office regarding a "civil resolution" of the government's investigation into the company's compliance with employment-record I-9 form requirements and its past use of the B-1 visa.

Infosys representatives conceded they had set aside $35m to settle the case and cover legal costs.

The most recent allegations against the Indian firm surfaced in February 2011 when former Infosys employee Jack Palmer sued the company for harassment and breach of contract, saying Infosys management retaliated against him when he blew the whistle on widespread violations of US immigration law.

Palmer's suit was dismissed, but he continued to cooperate with federal investigators, according to reports.

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