Thursday, October 31, 2013

Department of Justice (DOJ) Announces Record Breaking Fine For Infosys Limited (INFY)

On October 30, 2013, the Department of Justice (DOJ) announced the largest immigration-related violation fine against tech giant Infosys Limited (INFY), a publicly traded company.

Infosys, which operates in more than 30 countries with more than 160,000 employees (roughly 15,000 people in the United States), had been under investigation since May of 2011, for using short-term B-1 visas to bring thousands of workers to the United States instead of the more expensive H1-B visa for specialized workers. The U.S. caps the number of H1-B visas issued each year, making the process highly competitive among companies looking to hire foreign employees.

The settlement highlights of $34 million;

  • $5 million is to be paid to Homeland Security Investigations
  • $5 million to the Department of State, and
  • $24 million paid to the DOJ.
An Infosys consultant flagged what he said was an illegal practice and contacted authorities. The whistleblower, Jay Palmer of Alabama, stands to collect millions from the settlement under the False Claims Act, a federal whistleblower law, which could award him as much as twenty-five (25) percent, according to U.S. Attorney John M. Bales.

In the press release, the DOJ alleged that "Infosys failed to maintain I-9 records for many of its foreign nationals in the United States in 2010 and 2011 as required by law, including a widespread failure to update and re-verify the employment authorization status of a large percentage of its foreign national employees."
According to the settlement agreement, Infosys phased in a new electronic I-9 system to replace its "hard copy" system while also implementing new I-9 compliance procedures in 2011.  It also enrolled in and began using E-Verify in 2011. Infosys is also forbidden from using invitation letters and will be required to comply with rules on keeping its I-9 forms.

The audit revealed more than 80 percent of Infosys’s I-9 forms for 2010 and 2011 contained substantive violations. As a result, Infosys must submit to additional auditing for I-9 forms.  The auditing of at least 4% of the company's forms must be conducted by an independent third-party auditor one year from the settlement and an additional year thereafter.

Infosys was also accused of making errors on thousands of I-9 Forms that are required to determine a person's work eligibility.  Agents from Homeland Security Investigations who reviewed about nine thousand (9,000) I-9 Forms as part of the federal probe found more than 80 percent of them had errors.

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