United States: Flurry Of Visa Fraud-Related Lawsuits Filed Against Indian IT Firms

Immigration status and working conditions are the focus of lawsuits against three of India's largest IT outsourcing firms, Infosys Technologies, Larsen & Toubro InfoTech, and Tata Consultancy Services. Current and former employees allege that the firms engaged in visa fraud/misuse and harassment. These allegations have far-reaching implications as they attract increased government scrutiny.

A brief summary of each of these lawsuits follows.

Infosys Technologies

This whistleblower case alleges misuse of the controversial B-1 in lieu of H-1B immigration status. In the complaint, the plaintiff claims that, in an effort to avoid the restrictions of the H-1B visa program, the company illegally brought foreign workers to the United States on B-1 business visitor visas and allowed them to engage in regular employment activities at U.S.-based company projects. The plaintiff contends that he was harassed after refusing to participate in the alleged scheme to use short-term B-1 business visitor visas for work requiring an H-1B visa.

The B-1 visa category applies to temporary business visitors who come to the United States to conduct activities of a commercial or professional nature, such as consulting with business associates, negotiating a contract, or attending business conferences. B-1 business visitors must continue as employees of the company abroad, remaining on the foreign employer's payroll in the home country since they cannot receive compensation from a U.S. source. This means that these B-1 visa holders are paid at the generally lower wage rates of the home country. B-1 visa holders are prohibited by law from "performing skilled or unskilled labor" in the United States.

The visa fraud allegations raised in the lawsuit have not only attracted the attention of federal investigators and led to a criminal investigation into irregularities in the company's visa and hiring practices, but also have drawn the attention of U.S. Senator Charles Grassley (R-Iowa), the senior Republican on a Senate committee overseeing immigration and visa policy. In an April 2011 letter to the U.S. Department of Homeland Security (DHS) and the U.S. Department of State (DOS), Senator Grassley sought a thorough review to ensure that that the B-1 visa program has not become a "subterfuge" for companies seeking to avoid the annual caps and prevailing wage requirements imposed by the H-1B visa program.

The Infosys case has resulted in increased scrutiny of the B-1 visa category and additional pressure on U.S. consulates and embassies abroad, and U.S. Customs and Border Protection officers at U.S. ports of entry, to closely scrutinize B-1 visitors to ensure that they are coming to the United States for appropriate B-1 purposes and not to work. In its May 2011 response to Senator Grassley, the DOS stated that, at one consulate, the B-1 visa refusal rate had since increased by 25% and disclosed that in "the last year, five large employers have been suspended from this program as a result of fraud discovered in visa applications filed by purported employees."

Larsen & Toubro InfoTech

A sexual discrimination lawsuit filed against Mumbai-based IT services firm, Larsen & Toubro, by two former employees, one of whom worked in human resources, includes allegations of immigration law violations, including H-1B visa fraud and document fabrication. The complaint alleges that Larsen & Toubro circumvented H-1B visa quotas by applying for and obtaining business visas on false representations and placing such visa holders on work assignments at client sites. The lawsuit also makes a number of allegations concerning false information submitted to the federal government in connection with L-1B visas (intra-company visas for persons with "specialized knowledge") pertaining to the location where the individual employees would be working, the tasks they were being brought into the United States to perform, and their reporting responsibilities. The complaint contains several other allegations as well, including:

  • Backdating documents and creating new ones;
  • Misrepresenting the wages paid to employees in visa applications;
  • Rejecting, in advance, applications received in response to advertisements that are required as part of the pre-filing recruitment efforts in the first step toward obtaining a "green card";
  • Falsely certifying that notices of positions for which H-1B workers were being hired had been posted and changing the location of the employee "from that which the U.S. government had granted the H-1B visas";
  • Failing to pay wages "which had been certified to the U.S. government in the H-1B visa application";
  • Falsifying applicants' experience in applications for extending H-1B visas in order to avoid having to pay higher wages;
  • Providing false job descriptions in the H-1B applications to the U.S. government; and
  • Failing to keep proper Public Access Files, including documents mandated by law, such as wage rate statement, actual and required wage memo, prevailing wage document, job posting, and benefits offered.

In light of the interest generated by the Infosys case, it is very likely that the allegations against Larsen & Toubro will also draw the attention of federal investigators.

Tata Consultancy Services

This class action lawsuit was brought by non-U.S. citizen plaintiffs who were sent to the United States from India to work on software projects. One of the plaintiffs was the recipient of an L-1 visa, which allows foreign companies to transfer workers to their U.S. subsidiaries. The plaintiffs allege that the company violated U.S. tax and wage laws.

The federal government has already initiated and dedicated substantial resources toward a number of fraud detection initiatives. These high-profile cases are now generating increased government scrutiny, including spurring the government to say that it intends to tighten visa regulations and to close loopholes that critics argue enable employers to abuse the immigration system and displace qualified U.S. workers with foreign nationals because they are cheaper to employ. A more robust enforcement regime may herald potentially stricter measures, including amendments to existing laws or the enactment of new legislation imposing restrictions on the deployment of, and regulating the wages of, work visa holders at client locations. This, in turn, may adversely impact the ability of companies to obtain visas and conduct business in the jurisdictions where they operate.

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