Infosys says its use of B-1 visas was for legitimate purposes

The company was responding to reports of an impending fine of about US$35 million by the U.S. government.

Indian outsourcer Infosys said its use of B-1 visas in the U.S. was for legitimate business purposes and was not designed to circumvent the requirements of the H-1B visa program.

"No criminal charges have been filed against the company and no court rulings have been issued," said Infosys, which in the third quarter derived over 61 percent of its revenue from providing low-cost services to North America.

The response from Infosys late Tuesday comes in the wake of reports that the U.S. government is planning to fine India's second-largest outsourcer about US$35 million on Wednesday over the company's use of B-1 visas which are intended for short-terms visits instead of longer duration H-1B temporary work visas.

The use of workers from India on outsourcing projects has traditionally been a contentious issue, particularly as Indian outsourcers are seen as displacing U.S. workers.

Infosys said it is in the process of a resolution with the U.S., but added that "the resolution has not been finalized."

A company spokeswoman late Tuesday declined to provide further information, including whether a settlement was likely to be announced Wednesday.

"Infosys denies any claims of systemic visa fraud, misuse of visas for competitive advantage, or immigration abuse. Those claims are untrue and only unproven assertions," the company said in the statement.

Infosys announced a provision of $35 million towards "visa related matters," while announcing its earnings earlier this month. In a subsequent statement, the company clarified that the sum would include legal costs relating to a proposed resolution with U.S. agencies over their "investigation into the Company's compliance with Form I-9 requirements and past use of B-1 visas."

Form I-9s are used for verifying the identity and employment authorization of individuals hired for employment in the U.S.

Infosys received in May 2011 a subpoena from a grand jury in the United States District Court for the Eastern District of Texas that required that the company provide to the grand jury certain documents and records related to its sponsorships and uses of B-1 business visas. The company said it complied with the subpoena. The company has also confirmed that the U.S. Department of Homeland Security had said it found errors in a significant percentage of its Forms I-9 that it had reviewed, and may impose fines and penalties on the company for the alleged errors.

Infosys came under scrutiny in the U.S. after Jack Palmer, an Infosys employee in the U.S., alleged that the company committed visa fraud and that he had faced mistreatment for questioning the practice.

John Ribeiro covers outsourcing and general technology breaking news from India for The IDG News Service. Follow John on Twitter at @Johnribeiro. John's e-mail address is john_ribeiro@idg.com

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