Infosys Whistleblower Presents Evidence of Alleged B-1 Visa Abuse

Infosys whistleblower Jack Palmer has gone public with details of his assertion that the Indian outsourcer willfully violated U.S. immigration and tax laws to increase profit, by soliciting B-1 visas instead of H-1B visas for Indian employees. Meanwhile, Infosys continues to deny Palmer's allegations.

By Stephanie Overby
Mon, August 15, 2011

CIO — The Infosys (INFY) employee who is suing the Indian IT service provider for allegedly violating visa and tax laws in order to increase its profit margins has gone more public in recent weeks, providing written testimony of his claims to Congress and instructing his lawyer to share internal Infosys documents and emails with CIO.com that appear to back up some of his assertions.

The $6 billion company, based in Bangalore and employing more than 130,000 worldwide, refuses to address the specifics of Palmer's charges. But in an email to CIO.com, a spokesperson for the outsourcer admitted that the company has since altered its internal visa processes.

Jack "Jay" Palmer, a principal consultant in Infosys's enterprise solutions practice, provided written testimony to the Senate Judiciary Subcommittee on Immigration, Refugees and Border Security on July 26. His testimony indicated that Infosys was using the U.S. B-1 business visa—designed to allow foreigners to come to the U.S. for short periods of time for such things as meetings, contract negotiations or short-term training—to bring the outsourcer's Indian employees to perform software development, quality assurance and testing for U.S. clients. The B-1 visas were easier to obtain than the increasingly scrutinized H-1B skilled worker visas, according to Palmer's testimony, and unlike H-1Bs, B-1s did not have to be paid a prevailing wage because visitors on a business visa are not supposed to be drawing a salary in the U.S. at all.

Since B-1 visa holders cannot be paid for work by a U.S. entity, Palmer has said that Infosys avoided using its standard HR systems and processes when compensating the foreign workers. Instead, Palmer alleges the company made direct payments in rupees from India to bank debit cards to cover the Indian workers' wages and expenses. According to Palmer's written testimony, Infosys employees travelling to the U.S. on business visas were required to obtain debit cards from one of three multinational banks designated by the company.

By paying the visa holders in this way, the IT service provider avoided running afoul of visa restrictions (B-1 regulations only allow a business visa holder's business expenses to be paid in the U.S.), according to Palmer's lawyer Mendelsohn. It also avoids having to pay taxes on the workers' earnings, the attorney adds.

When a B-1 visa holder needed to stay on a project longer or return to the U.S. for a project, they submitted a request to have their bank card "reloaded," a term that was common parlance among that community of B-1 visa holders and their managers, according to Palmer's testimony.

According to an email from Infosys's internal counsel provided to CIO.com by Mendelsohn, the company's internal investigation following Palmer's allegations of visa abuse was less concerned with how the B-1 visa holders were being paid than the nature of their work in the U.S. "The validity of the visa is not determined by whether the person is paid in rupees or dollars, or even whether the client is billed for the services or not," the email reads. "Validity is determined by an examination of what work is being performed and whether it constitutes a 'legitimate business activity' for B-1 purposes."

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