The US has opened an investigation into two top Indian IT companies — Tata Consultancy Services and Infosys — for possible violations of rules for H-1B visas for foreign technology workers, according to a media report.
The Labour Department had opened the probe into the two Indian companies for possible visa violations for workers under contracts with an electric utility, Southern California Edison, which recently laid off more than 500 technology workers, the New York Times reported.
“Many said they were made to train replacements who were immigrants on temporary visas, known as H-1B, brought in by the Indian firms, Tata Consultancy Services and Infosys,” the influential daily reported.
The probe was announced by two Senators, Richard Durbin, a Democrat, and Jeff Sessions, a Republican, after they were notified by the labour department, it said.
The US government move comes days after the Times had reported that around 250 Walt Disney employees had been laid off and replaced with Indians holding H-1B visas.
About 250 Disney employees were told in late October that they would be laid off, the Times said.
“Many of their jobs were transferred to immigrants on temporary visas for highly skilled technical workers, who were brought in by an outsourcing firm based in India,” it said.
“Over the next three months, some Disney employees were required to train their replacements to do the jobs they had lost.”
The layoffs at Disney, Southern California Edison and other companies, “are raising new questions about how businesses and outsourcing companies are using the temporary visas, known as H-1B, to place immigrants in technology jobs” in the US, it said.
In Bengaluru, TCS officials were not accessible while a Infosys spokesperson told IANS that the company would soon respond to the media report.
Meanwhile, Indian stock broking firm, Angel Broking does not foresee any financial implication for both the global software majors for whom North America continues to be a major outsourcing market, accounting for about 60 percent of export revenue.
“This development (probe) is in the normal course of business and hence, we believe that it won’t have major impact on the business dynamics,” Angel Broking’s vice-president (research) Sarabjit Kour Nangra said in a statement from Mumbai.
The broking firm maintained that buying shares of TCS and Infosys at a price target of Rs.3,168 and Rs.2,630 would not be a risk.
Asserting that they fully comply with the US immigration laws, Indian global software majors Infosys and Tata Consultancy Services (TCS) on Friday denied receiving indication of any fresh probe into alleged violation of H1-B visas by them.
“We have received no indication of any broader investigation of visa practices by the US Department of Labor,” the city-based Infosys s aid in a statement here.
Similarly, a TCS spokesperson told IANS from Mumbai that it had rigorous internal controls to ensure full compliance with all regulatory requirements related to US immigration laws, including those related to H-1B visas.
H1-B visas, which permit foreign nationals to work in the US for a maximum of six years, are granted to overseas firms for sending their skilled employees to work on onsite projects of their clients across north America.
Both the IT majors have hundreds of their techies working in the US firms on H-1B or L-1 (temporary) visas, generating over 60 of their export revenues.
“We are committed to complying with the US immigration laws. The US labor department regularly selects a percentage of visa and labour condition applications for extra scrutiny in this (IT) industry. We work closes with the department to assist them in this activity in the ordinary course of our business,” Infosys said.
The outsourcing majors’ reaction came in response to a media report earlier in the day that the US government had begun investigating alleged H1-B visa violations by them.
Echoing the firm stand of Infosys and TCS, a top official of the IT industry representative body (Nasscom) said a deliberate attempt was being made to project the Indian IT sector wrongly without considering their commitment to compliances and contribution to the US enterprises.
“Indian software firms have been complying with the US visa regulations and cooperating with the US labor department in responding to any query on judicious use of its visas,” Nasscom president R. Chandrashekhar told IANS from New Delhi.