The Infosys 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.”
According to Palmer’s testimony, Infosys published “do’s” and “don’ts” for the invitation letters it began to require before initiating the process of applying for a B-1 visa for an employee. Infosys had submitted so many applications for B-1 visas that the U.S. consulate began denying the company’s applications, Palmer wrote in his testimony. He added that the consulate told Infosys that it needed “Americans” or American companies to issue “welcome” or invitation letters in order to avoid the suspension.
The “do’s and “don’ts”, posted on a Website open to employees of Infosys and provided to CIO.com by Mendelsohn, advised avoiding titles such as “programmer” or “analyst” in favor of titles such as “project leader” to indicate that the purpose of the visit was akin to “business discussions”, “meetings” or “training” rather than “implementation”, “testing”, “consulting” or anything that “sounds like work.” The how-to Website also advised providing a detailed justification of the visit and avoiding mention of any outsourcing contract rates. Because the B-1 visa is a temporary visa, invitation letter writers were instructed to request stays of four to six weeks at a time, according to the Website.
The B-1 visa holders were assigned to fixed price, rather than time and materials, contracts, according to Palmer’s testimony and an internal Infosys email provided to CIO.com by Mendelsohn, because time and materials deals require that everyone working on the project be named along with their hourly rate and U.S. social security number, which a business visa holder cannot obtain.
Palmer testified that he first raised his concerns within Infosys last year after attending meetings in India about how to “creatively” get around H-1B visa limitations and processes. In January 2011, Palmer reported this and other information to federal authorities and, according to his testimony, began to cooperate with the State Department and other federal agencies in a criminal investigation of Infosys. In March, Palmer himself filed a lawsuit against his employer in Alabama state court, which has since been moved to federal court. In May, Infosys confirmed 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.
In responses to CIO.com‘s questions about Palmer’s allegations and the documents provided by his lawyer, Infosys spokesperson Sarah Gideon released a statement that said, “There is not, nor was there ever, a policy to use the B-1 visa program to circumvent the H-1B program.” The statement also noted that Infosys employees travelling on B-1 visas at any point in time account for less than two percent of the total U.S. travel by the company’s employees. The statement indicated that the company will not address the specific allegations regarding how B-1 visa holders were paid, what work they performed, and what clients they visited, due to the ongoing litigation with Palmer.
However, the statement did note that Infosys had altered its own visa and immigration processes recently. “We have made changes in our policies regarding immigration and visa requirements,” the statement reads, “and we will continue to improve such policies as necessary to maintain the absolute best practices for compliance.”