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Infosys Fined $35M For Illegally Bringing Programmers Into US On Visitor Visas 201

Posted by Soulskill
from the if-you-ain't-cheatin'-you-ain't-tryin' dept.
McGruber writes "The U.S. government fined Infosys $35 million after an investigation by the Department of Homeland Security and the State Department found that the Indian company used inexpensive, easy-to-obtain B-1 visas meant to cover short business visits — instead of harder-to-get H-1B work visas — to bring an unknown number of its employees for long-term stays. The alleged practice enabled Infosys to undercut competitors in bids for programming, accounting and other work performed for clients, according to people close to the investigation. Infosys clients have included Goldman Sachs Group, Wal-Mart Stores Inc. and Cisco Systems Inc. Infosys said in an email that it is talking with the U.S. Attorney's office, 'regarding a civil resolution of the government's investigation into the company's compliance' with employment-record 'I-9 form' requirements and past use of the B-1 visa. A company spokesman, who confirmed a resolution will be announced Wednesday, said Infosys had set aside $35 million to settle the case and cover legal costs. He said the sum was 'a good indication' of the amount involved."
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Infosys Fined $35M For Illegally Bringing Programmers Into US On Visitor Visas

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  • Big deal (Score:5, Informative)

    by Anonymous Coward on Tuesday October 29, 2013 @06:39PM (#45274177)

    I'm sure Infosys made more than $35mln by bringing those programmers in the way they did. Aside from not having to pay for the H1B visas, they could pay the programmers much less this way. Of course nothing will change. They'll start doing the same thing again. These settlements show when you have enough money, anything is legal.

    • Re:Big deal (Score:5, Informative)

      by mythosaz (572040) on Tuesday October 29, 2013 @06:41PM (#45274203)

      35M is enough that someone internal is going to pay the price -- and by price, I mean leave his executive position and go to work for another tech company in high management for a similar paycheck where he'll repeat the process.

      • You can bet that whomever decided to do this either:
        a. Had a legal team calculate the cost in fines and deduced they'd make more money than the fines would cost them by doing this.
        or
        b. (most likely) didn't check, didn't care, implemented the strategy and raked in large bonuses until the feds started asking questions at which time he/she either retired or moved on to another job. Ironically they likely will point to Infosys for the rest of their career and say "See how great they were doing right up until I

      • Not really? He probably brought in a couple of hundred million. This would just be considered the costs of business. Hell, this is just like Microsoft.
      • 35M is enough that someone internal is going to pay the price -- and by price, I mean leave his executive position and go to work for another tech company in high management for a similar paycheck where he'll repeat the process.

        That depends on whether Infosys made a significant profit by this maneuver even taking the 35M into account.

        If they made 500M (bullshit number just for example) in profits this way overall and had to pay 35M in penalties they'd say 'well done we came out ahead'.

    • Re:Big deal (Score:5, Informative)

      by casings (257363) on Tuesday October 29, 2013 @06:44PM (#45274231)

      Whats worse is they even probably had a strategic team analyze how much they would get fined if they were caught, and decided it was worth the risk.

      As long the US government gets their cut, the people who get screwed are the people who play by the rules. Fuck everything about big business and their collusion with the government.

      • the IRS has been cracking down on companies that hire contractors for what are really full time positions. Contractors pay a lot less in taxes (well, the companies do, the contractor gets screwed but over all it's less tax revenue) and generally cost local gov'ts more.

        The people winning are the corporations that get to drive down labor costs while using the United States' expansive military to make the world safe for their bank accounts.
    • Re: (Score:2, Insightful)

      by Anonymous Coward
      Imagine if they faced the kinds of fines leveled at file sharers/pirates.
    • by Zemran (3101)

      "Infosys had set aside $35 million to settle the case and cover legal costs. "

      Meaning that they expect to discount the $35m by at least the cost of the legal expenses. So the people have to carry that burden... Surely it is time that such negotiations go 2 ways. i.e. "You want to argue the penalty, OK $45m..."

  • When (Score:5, Insightful)

    by msobkow (48369) on Tuesday October 29, 2013 @06:40PM (#45274189) Homepage Journal

    When is the punishment going to be "No, you're out of business, you fraud. You don't play fair. You cost us jobs. You're GONE."

    These bastards *made* more than 35 million off the scam. They're turning a profit off it.

    • by mjwalshe (1680392)
      Or ban them for having any visas for a year or so - if you abuse the system you should forfeit your privileges just as a number of "colleges" have been in the UK
    • Fraud as in a felony!? To hell with the fine, people need to be behind bars for this shit!

    • Re:When (Score:5, Insightful)

      by thej1nx (763573) on Tuesday October 29, 2013 @11:40PM (#45276511)
      How about being reasonable, and having it as "You broke laws and made profit illegally, so we take away ALL of that illegal portion of your profits that was made illegally and charge a 5-10% penalty on top of that, so that it is no longer profitable for you to break our laws" ?

      Corporations care just for the profits. If it is profitable for them to break laws, despite the current penalties involved, they will do so. Make it unprofitable and they are as law-abiding as the next guy.

      You know, it might be kinda better than all that xenophobic bullshit about FOREIGNERS making profittttsss off you.... and trying to shut them down and costing even the legitimately employed folks of the company, their jobs. But I guess, racism and xenophobia is more popular...

    • by houghi (78078)

      A fine is intended like a slap on the hand. You notice it, but you will not die from it.
      If they do it again, I am sure they will pay a LOT more.

      Also next to a fine there may be other payments they must do. How it works in Belgium is that you A) need to pay back the money you made of of it and B) pay a fine.

      If the 30MM is all they had to pay, then it is not a fine but a settlement.

  • by Ol Olsoc (1175323) on Tuesday October 29, 2013 @06:43PM (#45274223)
    My guess is that more American companies will be looking into this as a solid business model, and that the fines will just be a cost of doing business.

    Anything to get rid of those pesky American workers.

    • by icebike (68054) on Tuesday October 29, 2013 @06:50PM (#45274305)

      But why bother?

      H1B is not all that hard to get.
      You just lay off your current workers, then lie about there being no available US workers that meet the (carefully crafted) criteria.

      • Re: (Score:2, Informative)

        by Anonymous Coward

        One word: Quota

        There's a finite number of H1B's that are available every year, with a lottery-type system to see who gets them.

      • Except they don't. Where is this mysterious foreign worker that works for less money under the H-1B program? I've never met one, and I think I know why: The terms of obtaining them require that they are paid the same as anybody else working in that particular job.

        Slashdot likes to have it both ways on this one: They claim that Americans are stupid, as marked by poor test scores below most of the developed world. Yet at the same time they insist that there's no need for H-1B visas because we have plenty of w

        • by russotto (537200)

          Except they don't. Where is this mysterious foreign worker that works for less money under the H-1B program? I've never met one, and I think I know why: The terms of obtaining them require that they are paid the same as anybody else working in that particular job.

          There's a billion ways around those rules. But if you work for a decent company you're unlikely to see too many of these lower-paid visa workers. The companies which hire them (like Infosys) tend to hire them by the planeload, and hire them almos

        • by LoRdTAW (99712)

          My guess is they are paid the lowest possible amount of money to stay legal and their wage stays stagnant. Companies know eventually the H1-B will move on or leave the country so they look at it long term. An American worker will eventually want more and more money the longer they stay. An H1-B knows they could be replaced by another so they may not be as aggressive is asking for more money. So they are paid a fair wage on paper but it never increases or increases very little (dollar raises, 50 cent raises

    • by dcw3 (649211)

      My guess is that more American companies have been using this as a solid business model,.

      FTFY

  • by Anonymous Coward on Tuesday October 29, 2013 @06:46PM (#45274253)

    For each and every position which they did not higher industry median wage for they should pay 3 times the difference in wages + benefits (including pay-ins to the government) that were not disbursed. Further they should also have to pay some type of fine per position, per (year/quarter) that the violations occurred.

    In other words, they should for SURE show a net loss for this bad behavior. If the behavior is egregious enough those in authority at the time should also face real jail time.

    Anything less than that is a slap on the wrist and will not curb this behavior among companies who look at the balance sheet and conclude that the fines are a cost of doing business.

    • by icebike (68054)

      The nail was hit on the head in the second sentence.

      However, it wouldn't be the CEO who goes to jail but some lowly middle management type.

      The CEO will simply deny any knowledge that this was going, on and everyone down the chain of
      command will insist they never told the CEO what was going on, and anyone who refuses to tow the
      company line will be forced to accept an assignment in Russia. *cough*.

  • Missing Step 2 (Score:3, Insightful)

    by Notabadguy (961343) on Tuesday October 29, 2013 @06:47PM (#45274275)

    We're missing step #2, which is "And since you're defrauding the government among other customers, you're blacklisted from doing business with them again."

    $35m isn't a drop in the bucket.

    • Re:Missing Step 2 (Score:5, Informative)

      by Anonymous Coward on Tuesday October 29, 2013 @07:05PM (#45274419)

      "35m isn't a drop in the bucket."

      Yes it is.

      Revenue US$ 7.39 billion (2013)
      Operating income US$ 1.90 billion (2013)
      Profit US$ 1.72 billion (2013)

      • Yes - it *is* a drop in the bucket. Total Profit US - 1.72 billion. Let's presume that a significant portion of their profit is derived from overcharging for illegally underpaid Indian works on B-1 "Business visit" visas.

        Losing $35,000,000 is a drop in the bucket when faced with the windfall of cash that they illegally made.

    • You're absolutely right....except you're assuming there is an actual finding/admission of guilt.

      The article speaks of a "settlement" being announced. To my eyes, the probability of that settlement including an admission of culpability approaches zero.

      Infosys will not be blacklisted, they'll mind their manners and volume for a bit, then quietly pick up where they left off on the contract pile.

      And....allowing for that tiny percentage sliver, what if they do admit guilt and are barred from government contract

      • by Zak3056 (69287)

        I have a better punishment: no visas of any kind for three years. No h1b, no b1, your CEO can't have a visa for his quarterly visit, nothing. The punishment should fit the crime.

        • by dk20 (914954)
          Fine the companies who had the workers.
          While not truly at fault, perhaps the burden should be with the one who pays the bills to ensure compliance with US laws?

          Plus, one never knows what the arrangements were.
  • H1B Scam (Score:5, Insightful)

    by oldhack (1037484) on Tuesday October 29, 2013 @06:50PM (#45274299)

    Dump H1B. Instead of giving out Visa for foreign nationals, we should try to KEEP foreign graduates in this country - make it easier for foreign students graduating from US colleges to live and work in the US.

    This is no brainer - many of the best and brightest from all over the world are already here in our universities.

    • Re: (Score:3, Informative)

      by Anonymous Coward

      And it would completely leave anyone who is not a student in the cold. I'm in the US on an H1B, working at a small tech startup. Since I joined the company, we have already doubled in size, hiring plenty more Americans. Are H1Bs sometimes abused? Yes, sure, it happens. On the other hand, I and other people like me are actively helping the US economy by creating new jobs.

      • Re: (Score:3, Insightful)

        by Obfuscant (592200)

        Since I joined the company, we have already doubled in size, hiring plenty more Americans. ... On the other hand, I and other people like me are actively helping the US economy by creating new jobs.

        Do you honestly think there was nobody in the US who could have done your job? And that the growth of the company you work for is mainly because of your work product?

        Arguing that H1Bs really help the US economy requires the answer to both to be "yes". Otherwise, you are simply taking a job that some US resident could have filled and claiming that you're helping him out by having it.

      • by oldhack (1037484)
        Nothing personal to you AC, and good that you're doing well here. But a large number of capable foreign students, some of world's best and brightest, come here on their own and graduate from our reputable schools, are already here and familiar with the land, and want to work and live here. When we are failing to accommodate these people, the industry's clamor for more H1B is utter nonsense - it serves the industry's aim to suppress wage rather than attracting talent to America.
  • by Anonymous Coward on Tuesday October 29, 2013 @07:08PM (#45274443)

    There are both good and bad reasons to grant Visas to tech workers. We should not turn down genuine talent that wants to work here. Having bright minds emigrate, work, live, contribute, and integrate here is probably one of the biggest foundations of America's success.

    What we don't want is a bunch of scum fucks importing slave-pay workers to save a buck. I say bring in the IT/tech talent, but on the condition they are paid competitive wages and compensation (And enforce that with some teeth!). You also need to make sure they have freedom and mobility so their sponsor company can't hold their visa over them as a form of extortion.

    Granting guest workers MORE privileges and protections will ensure that they're less attractive to unscrupulous outfits looking to save money instead of hiring available domestic talent. Companies that genuinely need foreign talent will happily pay for it.

    • by nomadic (141991)
      I think we should definitely allow and encourage the best and brightest to come here; the problem is not that we're doing that, but that we're not supporting the best and brightest HERE. In addition to all the sleazy financial reasons companies prefer foreign tech workers, there's a weird (and wrong) cultural perception in business that they're "better," but that's not really based on experience but rather just kind of fad-seeking echo chamber that is modern corporate America.
    • We should not turn down genuine talent that wants to work here.

      yes, yes we should turn they down!

      when people who have been born here, raised here, paid their dues here and have a vested interest in what happens here (long-term) can't find a job, you better BELIEVE we should give them preference. big-time preference.

      when our unemployment is reasonable again (low low single digit numbers) THEN its time to reconsider importing labor. but we have so many unemployed americans here, I find it disgusting that

    • by sjames (1099)

      That's why I would prefer to do away with H1-B entirely. Make it a bit easier to get a green card instead.

  • I am angered and saddened by what companies like Infosys have done to the US immigration system. I remember having to fight really hard to get my first H1B in the US because of those companies (I got my US higher ed paid by the NSF yet I'm not American, and I'm not a programmer).

    After they have completely wrecked the H1B system they are now going to wreck the visitor visa system.

    I am angry because they destroyed the reputation of the H1B system, one of the few legal ways to become a citizen. I am saddened

  • by Anonymous Coward

    Infosys is not the only one gaming the system. My fortune 20 company is addicted to these "by the pound consultants" from the likes of Infosys/Tata/Berlasoft/you-know-who-you-are as well. There is zero effort put into sourcing local staff and the company pays substantial sums to these firms (who pocket half or more of the hourly rate) when they could just as easily get local employees for the same cost. Then there's the poor sods that are being raped by several levels of middle men and have to live 10 to

  • First there was the green card
    Then it got slow, bloated and hard to get.
    So they invented the H1-B which was quick and easy.
    Then it got slow, bloated and hard to get.
    So they invented the guest worker pass
    continue....

    Just fix the green card and the others are unnecessary. If someone is a net benefit to the country, there's no reason to limit their stay.

    The US government provided the visas and the visa rules to Infosys. It looks to me that they took the hint. The US does not look like it 'wants' people on H1s

  • H1B != B-1 (Score:5, Informative)

    by slew (2918) on Tuesday October 29, 2013 @08:21PM (#45275009)

    I think people are confusing H1B (which have their own problems), with the B-1 visas that Infosys was caught abusing...

    H1B are for employing people that live HERE to work HERE and are paid at a level to live HERE. B-1 visa are for people that live THERE, but are temporarily working HERE, but are paid to live THERE (which is generally much lower). For example, a person employed with the same company but lives say in India, that needs to come to the US to attend a meeting, or conference, or perhaps for a couple months for training or maybe even negotiate a contract in person would need a B-1 to get into the country (you technically can't do any of these things on a tourist visa).

    The duration of an H1B is 3 years (extendable to 6 years), the duration of a B-1 is typically 6 months (extendable to 1 year). Think of the B-1 as a visitor visa to do technical visiting (there is a separate P-visa for an athlete or artist to make a performance in the US for money which is another type of visa).

    The abuse that Infosys was doing is that they were submitting manufactured documentation for the B-1 that they were coming to the US to attend training, meetings or conference, but employing B-1 visa folks to work on long term projects. That is a big NO-NO because then you can paying foreign wages (instead of H1B equivalent wages) to people work on projects even though they are here, undercutting everyone (including H1Bs).

    Infosys could have gotten the "death-sentence" (which some companies have gotten) which is no B-1 visas for a year, but they are of course big enough to avoid that and only need to pay $35M. This slap on the wrist is what to get upset about, not tangle this up with the separate H1B discussion. At least H1Bs are supposed to get paid a prevailing wage and their numbers are supposed to be limited, so at least on paper, it's reasonable. There are none of the similar statutory limitations on a B-1, so when you are abusing it, you are really going to town.

  • by Alejux (2800513) on Tuesday October 29, 2013 @09:01PM (#45275315)
    I can just imagine someone screaming that and suddenly all the programmers running out of their cubicles in panic!
  • So many problems will be addressed by that.

  • These were short term visas. Require these 'visitors' sponsors to delivery proof of exit (plane tickets, etc) or deliver the 'visitors' to INS for deportation for overstaying. Failure by the sponsor results in daily fines to cover 3x costs of arrest and deportation, and equal punitive damages. Too many and these sponsors lose their privilege to use these visas, fire at least 3 years.

    And after, say, 7 days overstay, fine the sponsors client where the visitor was working, which is registered in advance.

    • by Alioth (221270)

      They already do. If you come in on a visa, you get a white I-94 card when you arrive, and you return this I-94 when you leave. It's how the DHS knows you don't overstay. If the airport authorities have collected the I-94 and you boarded the aircraft, they know you have left.

      They will deport you if you overstay. The trouble is if someone overstays, since the US so far doesn't insist on making visitors wear a GPS tracker, you have to go and find them to deport them which can be quite difficult.

      • So make the sponsor either responsible or penalize them. Overstays could be considered 'working after expiration'. And if they aren't working for the sponsor, make the sponsor, liable for losing them.

  • by Anonymous Coward on Tuesday October 29, 2013 @11:22PM (#45276371)

    Hint: I am in India, though I do not work for "Indian" company.

    All my friends in TCS, Infosys, Wipro etc., went to US through B1 route if the duration was less than 2-3 months. B1 Visa explicitly forbids working, but is for meetings and stuff.
    Yet they went on customer sites etc.,
    They are even trained to give specific answers to Immigration and say a lot about meetings and stuff. Some are even booked as members on cheap conferences spaced 15-20 days apart so it all looks like the real deal.

    These companies are unethical scum, and due to their bottom feeding attitude, they have spoilt the reputation of the "Indian software Engineer". The world now views the Indian software engineer as a low cost labour intensive guy fit for only data entry with the help of a spell checker.
    That brush gets broadly applied to us product design software engineers doing real software work, and getting 2-3X the salary the bottom feeders pay.

    Speaking of ethics, employees of these companies take their Earned or Paid leave, and then come to office, so that do not lose out the govt sop of leave travel allowance. But any actual leave is hard to come by unless you are on bench.

    During their foreign stints, they were forced to handover any allowance in lue of extra working hours given to them by the employer(some US employers used to give sops) to their parent company.

    If you are hiring a cheap bottom feeder from India, all I can say is "All the best". The low quality work will blow up in your face 1-2 years from now, and no amount of patchwork will fix it.
    Then you will go to a bar after your layoff and lament how you only get cheap unskilled monkeys from India. But the fact is you are the retard who went bottom feeding and found only slime.

    • If you are hiring a cheap bottom feeder from India, all I can say is "All the best". The low quality work will blow up in your face 1-2 years from now, and no amount of patchwork will fix it. Then you will go to a bar after your layoff and lament how you only get cheap unskilled monkeys from India. But the fact is you are the retard who went bottom feeding and found only slime.

      The people who hire the "cheap bottom feeder from India" won't be laid off, they are the ones doing the layoffs. The people mandating that we use the Indian slave labor are 2 levels below CEO. CEO->CTO->Director. Anyone below that has no choice, besides a mass exodus.

  • Seriously, Infosys and other companies that play games like this, should be denied business licenses, but at the least, should not be able to get any gov. contracts any more.
  • If a company is above board, all they have to do, is offer up a reward of getting H1B's local LEGAL jobs, if they will rat out situations in which they are employed illegally. By doing this, any company that chooses to cheat, will quickly get nailed.
  • by ThatsNotPudding (1045640) on Wednesday October 30, 2013 @07:45AM (#45278499)
    Lame, low governmental fines = The Cost of Doing Business. I suspect they could find this amount under their couch cushions.

    Major Federal violations such as this should _start_ at 10% of the total corporations' gross profits encompassing the entire time span of the violation, rapidly rising with discovery of any willful cover-up.

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