Whistleblower presents evidence of alleged visa abuse

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. customers. 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.

The visa holders thus

By paying the visa holders thus, the IT service provider avoided running afoul of visa restrictions, according to Palmer's lawyer Mendelsohn. It as well avoids having to pay taxes on the workers' revenues, the attorney adds.

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."

The B-1 visa holders were assigned to fixed price

The B-1 visa holders were assigned to fixed price, to put it more exactly 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 afterwards 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.