Infosys on Tuesday said it had received a subpoena from a grand jury in a district court in Texas, indicating that the case filed by a former US employee, Jack Palmer, cannot be taken lightly.
North America, which includes the US, is the largest revenue earner ($6 billion) for Infosys and accounted for 66 per cent of its sales last year. Infosys, which mentioned the employee lawsuit effects as a risk in its latest annual report, said the subpoena required it to provide information to the grand jury regarding the company’s sponsorships for, and uses of, B-1 business visas.
A subpoena is a writ by a government agency, most often a court, that has authority to compel a witness to give testimony or production of evidence. “We intend to comply with the subpoena and cooperate with the grand jury’s investigation,” Infosys said.
B-1 visas are issued for short-term business trips for such purposes as attending business seminars and restricts employees from engaging in gainful employment during their stay. On the other hand, H-1B visas are longer-term visas issued to people with a minimum bachelor’s degree who work in specialty occupations.
Palmer in his lawsuit had alleged, among other things, that Infosys was improperly utilising B-1 business visitor visa programme.
He had alleged that he was threatened and harassed after refusing to help Infosys bring workers on B-1 visas for work, which he believed required H-1B visas.
Following the filing of the lawsuit, US senator Chuck Grassley submitted a letter to secretary of state and the secretary of homeland security, requesting that their respective departments review the B-1 business visa programme and investigate the manner in which it was being used by companies, including Infosys.
Palmer, who is said to have worked for Infosys as a principal for enterprise solutions since August 2008, had filed the lawsuit early this year.
Infosys immediately did not comment on business effects due to the subpoena. “At this time we are not able to comment further… but do want to reiterate that we take our legal compliance obligations very seriously,” the company said.
Grassley, in a letter to the US administration, including Hillary Clinton, had earlier said, “If the allegations against Infosys are substantiated, American workers will have been hurt by this company’s fraudulent actions, and the integrity of both the B-1 and H-1B visa programmes will have been compromised.”
The subpoena, disclosed by Infosys after trading closed on Tuesday, could have an impact on its share price. “Though right now it is difficult to judge the monetary impact… on the company, the news may surely have some negative impact on the sentiments. The US government may cap short-term B-1 visas which may not only have a structural impact on Infosys but on the whole IT sector,” said Sanjeev Hota, assistant vice-president of research and IT analyst with Sharekhan.
Other analysts see the US senator’s support to the lawsuit adding to the anti-outsourcing decibel, but Som Mittal, president of Nasscom, India’s industry lobby representing the $76 billion outsourcing sector, did not see any threat to the IT industry immediately.
“At this point, it (the subpoena) is very company-specific,” said Mittal. Asked about US protectionist moves, Mittal said, “Since a jury has sent the subpoena, concerns about protectionism are not warranted.”
As of March 31, 2011, the majority of Infosys technology professionals in the US held H-1B visas. They number about 10,100, not including Infosys BPO employees or employees of wholly-owned subsidiaries. This visa allows an employee to remain in the US for up to six years during the term of the work permit and work as long as he or she remains an employee of the sponsoring firm.
Source:http://www.mydigitalfc.com/news/infosys-gets-subpoena-us-visa-use-142
