The U.S. Department of Labor has issued an investigation to determine if Indian third-party information technology companies -Tata Consultancy Services and Infosys – have violated American labor laws. This investigation directly relates to the use of H-1B visas, a non-immigrant visa that allows a U.S. employer to temporarily employ foreign workers in specialty occupations. Both companies deny the allegations.  This investigation reaffirms the U.S. government’s previously stated position that it will investigate vigorously and, if necessary, fine companies that violate U.S. immigration laws.  Employers using third-party sourcing entities should review these relationships closely and make sure suitable compliance procedures are in place.  Failure to do so could have devastating consequences.

This is not the first time that the U.S. government has investigated Indian third-party information technology outsourcing companies for immigration-related challenges.  Less than two years ago, Infosys paid $34 million following a lengthy investigation and settlement with the Department of Justice for systematic visa fraud and abuse of immigration policies.  In response to this record settlement amount involving immigration violations, government officials stated that the U.S. government would aggressively pursue companies that circumvent immigration processes, including the H-1B and B-1 visa classifications, which are used extensively by Infosys and and Tata.  In a October 2013 press release, U.S. Attorney Bales, asserted: “The H-1B and B-1 visa programs are designed and intended to protect the American worker; and we will vigorously enforce the requirements of those programs.” In that same press release,  David M. Marwell, Special Agent in Charge of Homeland Security Investigations in Dallas, concurred:  “This settlement against Infosys is the largest immigration fine on record.  The investigation indicated that Infosys manipulated the visa process and circumvented the requirements, limitations, and governmental oversight of the visa programs.  The investigation also showed that more than 80 percent of Infosys’s I-9 forms for 2010 and 2011 contained substantive violations.  Ultimately, these actions by Infosys cost American jobs and simultaneously financially hurt companies that sought to follow the laws of this nation.  Companies that misuse the visa process can expect to be scrutinized and held accountable.” As noted in an article by Ian Macdonald, employers should consider the following:

  • Review all contracts with third-party sourcing entities and ensure compliance with the Immigration Reform and Control Act of 1986, making sure that clear guidelines for control of vendor employees are specified.
  • Communicate with and train all managers who oversee projects staffed by contractors to ensure they understand what interactions with vendor employees are permissible with respect to avoiding co-employer liability.
  • Require review by designated employees rather than individual managers on all requests by employees of third-party sourcing entities for immigration-related information or assistance, such as internal posting notices, business invitation letters and employment verification letters for work conducted at client worksites.
  • Require third-party sourcing entities to apply the same standards of compliance to all outsourcing entities they subcontract work from.
  • Only conduct business with third-party service providers that are enrolled in the E-Verify program.
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Photo of Ian Macdonald Ian Macdonald

Ian R. Macdonald Co-Chairs the firm’s Labor & Employment Practice’s International Employment, Immigration & Workforce Strategies group. He focuses his practice on developing, assessing and managing global mobility programs for multinational companies on a range of challenges affecting the movement of people capital

Ian R. Macdonald Co-Chairs the firm’s Labor & Employment Practice’s International Employment, Immigration & Workforce Strategies group. He focuses his practice on developing, assessing and managing global mobility programs for multinational companies on a range of challenges affecting the movement of people capital domestically and internationally, including secondment agreements, benefits transferability, local host country employment concerns and immigration.

Ian and his team work closely with companies to manage and modify, where needed, corporate immigration programs to maximize efficiency, service and regulatory compliance levels. He is experienced with the full range of business immigration sponsorship categories (visas and permanent residence), anti-discrimination rules to reduce or eliminate risk of employment litigation, employer sanction cases, and I-9 and E-Verify compliance. Ian assists clients with establishing risk-based performance standards (RBPS) and Department of Homeland Security protocol, providing risk assessment assistance to corporations subject to Chemical Facility Anti-Terrorism Standards (CFATS) and assisting clients with ITAR/Export Control compliance within the immigration context.

Ian has developed strategic relationships abroad that he utilizes when working with clients to ensure compliance with foreign registration requirements. He is experienced with analyzing complex global mobility opportunities on country-specific matters to facilitate the transfer of personnel. Ian is also experienced in counseling employers on immigration strategy as well as immigration consequences of mergers and acquisitions, reduction in workforces, and furloughs.

Prior to joining the firm, Ian worked for the United Nations, various non-governmental think tanks and corporate law firms in London, Washington, D.C., New York and Atlanta.