Infosys Visa Probe: Experts Debate Impact on American IT Workers

Outsourcing industry watchers predict that the federal grand jury investigation into Infosys' use of B-1 business visas could make it harder for all outsourcing companies to bring foreign workers to the U.S. on any kind of business visa--potentially forcing them to hire more American IT workers.

By Stephanie Overby
Mon, July 11, 2011

CIO — Little is known for certain about the federal grand jury investigation of Infosys and its sponsorship of B-1 business visas.

In May, the Indian IT outsourcing company revealed that it had received a subpoena from a U.S. grand jury to provide records in connection with its use of B-1 business visas. A current* American employee of Infosys (INFY) alleged that the company was using the easier to obtain B-1 visa—intended to be used for travel to attend a specific event, receive short-term training, or conduct contract negotiations—in a fraudulent manner to import foreign workers to fill company roles stateside that actually required H-1B visas.

"It's hard to say what the State Department and U.S. Customs and Immigration Service (USCIS) are doing with respect to the investigation," says Ron Hira, associate professor of public policy at the Rochester Institute of Technology and co-author of Outsourcing America. "Neither agency has been forthcoming."

Some industry watchers predict that the probe could hamper the IT outsourcing industry's ability to use of a variety of guest worker and business travel visas, which in turn could lead these companies to hire more American IT workers.

"This could have some serious ramifications with the issuances of temporary work visas for employees of Indian-based service providers and non-Indian service providers seeking to bring Indian staff into the U.S.," says Phil Fersht, founder of outsourcing analyst firm HfS Research. "While valid H-1Bs and L-1s should still go through, the USCIS has the ability to probe visa applications hard when under scrutiny, and slow down the whole process for all providers, not only for Infosys."

Any media attention the Infosys case garners, particularly with the 2012 elections approaching and continued high unemployment rates, could drive further visa restrictions. "The publicity surrounding the investigation likely will generate continued Congressional interest and calls for further changes to the H-1B and L-1 programs to limit their perceived adverse effects on U.S. workers," says Carl W. Hampe, a partner in the immigration law group at Baker & McKenzie. "Companies sponsoring H-1B employees and those seeking the temporary transfer of their key personnel to the U.S. could face more obstacles."

Recent Visa (V) Reform Initiatives

IT service providers have been facing increased scrutiny of their use of visas to bring foreign workers to the U.S. in recent years. In 2004, Congress passed the L-1 Visa Reform Act, which increased limitations on the visas IT service providers use to bring specialized knowledge workers to client sites.

In recent years, USCIS has been more stringent in its assessment of H-1B visa petitions, reportedly beefing up its anti-fraud auditing efforts. Guidance issued by USCIS associate director Don Neufeld in 2010 required evidence of an actual employee-employer relationship between the visa petitioner and the H-1B employee. The so-called Neufeld memo "represented a significant change in policy and imposed substantial limitations on third party placement of H-1B visa holders. [It] was an example of efforts by USCIS to eliminate so-called [body shops]," says Paul W. Virtue, a partner in the immigration law group at Baker & McKenzie. Now, Virtue says, the U.S. government is turning its attention to B-1 business visitor visa abuse.

*Editor's Note: A previous version of this story inaccurately identified the Infosys worker as a former employee.

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