Reacting to media reports suggesting that it is close to settling allegations of violations of U.S. visa regulations, Infosys, on Tuesday, said that a settlement is not immediately imminent.
Responding to reports that the company has agreed to pay a fine following a settlement with the U.S. Department of Justice, Infosys, in a statement, said although the company “is in the process of completing a civil resolution with the government regarding its investigation of visa issues and I-9 documentation errors, a resolution has not been finalised.”
Earlier this month, the company had announced that it had set aside $35 million for a possible settlement with U.S. federal agencies. On October 11, while announcing the company’s results for the second quarter ending September 30, Chief Executive Officer S. D. Shibulal said Infosys was “in discussions” with the U.S. Attorney’s office and other agencies for “a civil resolution of the government’s investigation into the company’s compliance with Form I-9 requirements and past use of B-1 visas.” The I-9 Form is used to ensure that employers ‘verify’ employees’ identity and eligibility to work in the U.S.
Mr. Shibulal confirmed that the company was issued a Federal grand jury subpoena, seeking details of the company’s sponsorship of U.S. visas. A joint probe by the Department of Justice and the Department of Homeland Security since 2011 resulted in the charges against the company.
Mr. Shibulal had told The Hindu then that the company had set aside $35 million, based on its understanding of the ‘ongoing discussions’ with U.S. agencies.
The provision resulted in 11 per cent decline in Infosys’ dollar-denominated profits, despite revenues increasing by 15 per cent on an annualised basis during the quarter. The provision accounted for a little over 9 per cent of Infosys’ net profit of $383 million in the second quarter.
In the last one-and-a-half years, Infosys has settled two claims, which alleged violations of B-1 visas, by whistle-blowers in Alabama and California. The B-1 visa is a temporary business permit, typically aimed at allowing company employees to travel to the U.S. to work onsite. The allegations centred on the abuse of B-1 visas to avoid the ceiling on the issuance of H1-B visas. The visa issue comes at a time when the Indian IT services industry has expressed its worries about impact of the U.S. Immigration Bill that is pending before the U.S. Congress.
In particular, they fear that the cost of doing business in the U.S.would increase.
