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Jun 222011
 




If it were human, Indian software services provider Infosys would be feeling a sharp pain in its back-side today.

For the New York Times has thoroughly buggered India’s software darling in a critical piece posted on its home page.

The NYT story says that Infosys is:

facing an expanding federal investigation prompted by claims from an American whistle-blower that it misused short-term visitors’ visas to bring in low-cost workers from India.

Citing a lawsuit alleging Visa malpractices engaged in by Infosys, the NYT story paints a dark picture of the company that has brought so much misery to U.S. programmers by importing Indian software coolies on H1B and other Visas.

Infosys Project Manager Jack ‘Jay’ Palmer filed the lawsuit after his internal efforts to resolve his concerns went nowhere.

Infosys is also one of the largest users of H1B Visas, which lets foreign workers with specialized skills work in the U.S. for a few years.

But as the U.S. unemployment picture worsened, the American authorities started clamping down via number of methods including reduction in Visas and strict examination of documents.

At the crux of Jack Palmer’s lawsuit is the allegation that Infosys then illegally got workers into the U.S. on B1 Visas, which are non-work Visas, and illegally put them to work here at client sites.

Here’s an excerpt from the lawsuit:

In March of 2010, Plaintiff was invited to Bangalore, India for planning meetings. During one of the meetings, Infosys management discussed the need to, and ways to, “creatively” get around the H-1B limitations and process and to work the system in order to increase profits and the value of Infosys’ stock. The decision was made by management to start using the B-1 visa program to get around the H-1B restrictions.

If, a big If, Infosys indeed did what it is being accused of, then it’d be a major violation of American immigration laws.

The New York Times‘ story says:

Aside from Mr. Palmer, at least two other Infosys managers in the United States have submitted internal whistle-blower reports pointing to Indians on business visitor visas who were performing longer-term work not authorized under those visas, according to internal documents and current Infosys managers.

Infosys has denied the allegations in Palmer’s lawsuit.

IT Employees Count at Infosys, Wipro & TCS

Infosys – A History of Dirty Practices

Notwithstanding its sterling reputation with the unwashed masses, Infosys has never been an exemplar of probity.

Those familiar with the early years of the company will remember how the company raised money under false pretenses.

In its IPO filing with the stock exchanges in the mid-1990s, Infosys said it’d use the money to buy a mainframe computer and build housing for employees. Neither of which was done by the company, at least in the initial years after the Indian public offering. IBM employees in India who tried to get Infosys to buy their mainframe were frustrated over Infosys’ indifference despite their public posturing.

Subsequently, some top senior Infosys officers were guilty of leaking highly sensitive company information to the media before they were discussed by the board or made public through proper channels. Infosys was lucky that the Indian stock exchanges were lax and did not care to investigate the company for such illegal disclosures.

A few years back, Infosys got into serious trouble with the California Labor Department for screwing employees over overtime salary. A worried Infosys quickly settled by paying $26 million, the majority of which went to the affected employees.

Given the uncertainty of litigation outcomes, what are the odds that Infosys will settle this immigration nightmare by paying a hefty fine?

Watch this space!

Related Content:
Lawsuit filed by Jack Palmer
Indian Company Under Scrutiny Over U.S. Visas
What California Laws did Infosys Violate

  7 Responses to “New York Times Slams Indian Coolie Factory Infosys”

  1. There is no “if”.

    Indian IT “Services” firms (especially the giants) do it. They send people in short term “business visas” (i.e, B1) and get productive work done which should NOT be the case. What is more funny is, they would submit a letter to the consulate ‘assuring’ that the concerned would not involve in any of productive work during his/her stay in business visa.

    SearchIndia.com Responds:

    You write: There is no “if”. Indian IT “Services” firms (especially the giants) do it.

    Do you have any first-hand information that you can share with us about any of the Indian IT giants doing it?

    • In such cases there is no difference between Infosys and Saravana Bhavan.

      SearchIndia.com Responds:

      Is Infosys the new Saravana Bhavan on immigration matters?

      Of course, Infosys is innocent till a court decides otherwise.

    • I don’t have any evidential material to support my argument, but I’ve seen it happening. I’ve read through the documents, letter for the consulate, etc where they mention the concerned person would not indulge in any productive work / employment during the stay. But the actual purpose of travel would be to ‘code’.

      For ex., in the below link, some deepak shenoy, elaborates the process of IT companies which pay the employee through “allowances” since they cannot pay him/her directly. [he reportedly traveled in one of such visas].

      http://capitalmind.in/2011/05/infosys-investigated-for-misusing-b-1s/

      And if you see the comments in TOI article, you would realize Indians are not surprised by it. I mean, it’s a usual thing for them. And some people traveled whom I met, do not even know what they are undergoing is something illegal. As in most of the cases, Clients (north american corporates) are ‘just OK’ with it.

      http://timesofindia.indiatimes.com/tech/news/software-services/US-employee-accuses-Infosys-of-visa-tax-fraud/opinions/7592193.cms

      And, it is not limited to Indian IT companies. I’ve seen it happening with North american companies who opened IT services shops in India as well. They open IT services arms in India, since they get resources for low-wages. When it comes to profitability, ‘Corporates’ are not any different in India / North America. But, well, it all started with Indian companies ;-) and the global companies learnt the tricks of profitability from them, I would say.

      http://www.itbusinessedge.com/cm/blogs/tennant/ibm-global-services-reportedly-cited-for-visa-fraud-in-india/?cs=46678

      SearchIndia.com Responds:

      Interesting links and it does look like the abuse of B1 Visa is widespread. But we doubt much will come from the Infosys case because the political process here too has become very corrupted.

      In our view, lobbying and campaign contributions go hand in hand and vitiate the whole environment making tough action impossible.

      • If all they have any sense, Indian companies should move towards ‘thinking’ and bringing up creative products to the market, giving up “services” at low wages.

        SearchIndia.com Responds:

        Won’t happen.

        Even the giant TCS could not make much headway with the financial accounting package Ex. One of the rare exceptions is Tally.

        Indians will mostly continue to do coolie work in IT.

  2. While mis-use of Visa is a serious offense and it should be dealt with in the most serious manner I can’t help but think of even more serious and sinister things that happen. For example liberators becoming occupiers, War on terror being fought with terrorists as partners, dropping nuclear bombs and other minor things like that.

    Although there is no obvious link between the two, it seems what goes around comes around albeit in a different way.

    Compared to the latter crimes the misuse of visas is nothing nevertheless it should not go unpunished.

    SearchIndia.com Responds:

    Your points are, as you yourself tacitly acknowledge, non-sequiturs to the alleged immigration violations.

    At the end of the day, most likely we’ll see a fine of a few million dollars, which is chump-change for a company of Infosys’ size.

    The outsourcing virus is already out of the bottle and nothing can be done to stem the relentless destruction of the U.S. middle class at the behest of the large American corporations like GE, Goldman, Morgan Stanley and scores of others that employ Indian IT and BPO outsourcing providers like Infosys, Wipro, TCS and the like. Not to forget others like IBM that likely have more employees in India than in the U.S.

    It’s a great tragedy that’s unfolding every day and like all great tragedies happening in slow motion, the gross calamitous impact will be felt/realized years later.

    • Oh yes… I didnt mean to allude that one leads to the other. It was just a random chain of thought.

      I have a feeling that the outsourcing bubble will burst within the next decade but the damage that has already happened is hard to repair. There has to be equilibrium at some stage.

      SearchIndia.com Responds:

      This concept of equilibrium is a fantasy or fallacy that we engage in. Given the dark side of human nature, the state of nature is disequilibrium.

      As China gets into the IT services game in a large way, the bells will likely toll for India.

  3. A reprieve for Infy:
    http://www.rediff.com/business/slide-show/slide-show-1-infosys-wins-case-against-a-whistleblower-employee/20120821.htm

    SearchIndia.com Responds:

    Sad…blame the Alabama law. :(

    Thanks for the link.