Infosys Controversy: Homeland Security Investigates Indian Software Giant

MUMBAI, April 22 (Reuters) - Infosys, India's No. 2 software services exporter, is under scrutiny from the U.S. Department of Homeland Security for likely errors in employer eligibility documents of its staff working in the United States, the company said in a statement.

The Department of Homeland Security (DHS) is reviewing the employer eligibility verifications on Form I-9, said Nasdaq-listed Infosys in an April 18 filing on the U.S. Securities and Exchange Commission (SEC).

"In connection with this review, we have been advised that the DHS has found errors in a significant percentage of our Forms I-9 that the Department has reviewed," Infosys said in the SEC filing.

If the DHS concludes that the Forms I-9, used to verify the authorisation of employees to work in the U.S., contains errors it is likely to impose fines and penalties, the company said.

In January, Infosys said it was being investigated in Texas over its sponsorship and use of short-term U.S. business visas.

Jack Palmer, a company employee, has reportedly accused Infosys of misusing the B1 visas to send employees from India to the U.S., its largest export market. Infosys has denied the reports.

Infosys said it could not estimate any loss it might incur from "unfavourable outcomes" related to the ongoing investigation and review.

"In the event that any government undertakes any actions which limit any visa program that we utilize, or imposes sanctions, fines or penalties on us or our employees, this could materially and adversely affect our business and results of operations," the company added.

Infosys, which reported its fiscal fourth quarter earnings on April 13, disappointed investors with weaker-than-expected revenue growth outlook for the fiscal year 2013 due to an uncertain global economy.

The news sent its shares plunging more than 12 percent in their biggest fall in nearly three years and wiped off more than $3 billion from the company's market value.

Comments

[Tenjikuronin]

10:33 PM on 04/23/2012

Instead of complaining in the comments of this article, perhaps people should go out and work on making themselves more competitive in the global marketplace. Until they do that, they will continue to get outshined by Indian workers in every aspect.

[DBG Enterprises]

11:23 PM on 04/23/2012

Most of the global market wages are against us law...India's per capita income (nominal) is

$1219, ranked 142nd in the world, while its per capita purchasing power parity (PPP) of US $3,608 is ranked 129th.

It is estimated that India's Per Capita Income will register an average growth rate of 13% during 2011-20 so as to reach $ 4,200 by 2020.

Despite significant economic progress, a quarter of the nation's population earns less than the government-specified poverty threshold of $0.40/day. 27.5% of the population was living below the poverty line in 2004–2005.

http://en.wikipedia.org/wiki/Income_in_India

[Tenjikuronin]

11:28 PM on 04/23/2012

True. and all good information.

However, my comment was geared more towards the people on previous pages who were badmouthing Indians while offering no real solutions on how to adapt the American workforce to the current global marketplace.

[demannmarine]

03:23 PM on 04/23/2012

I saw about 20 landscapers and 10 roofers yesterday working that probably didnt fill out the I-9 form AT ALL!!

[Sundialsvc4]

01:27 PM on 04/23/2012

Oh, come on ... you are SURPRISED at this?

Perhaps one reason why these companies are "suddenly concerned" is that the =Indian= labor pool that they've been tapping into for so long is getting tired of playing along. The word is getting out fast (they "tweet" along with the rest of us ...) that what's actually happening to them over here in the US is a pretty raw deal and with no future in it. Which is true.

[tqmek]

12:47 PM on 04/23/2012

Hey outsourcing, that what you get.

[nonChristian]

11:58 AM on 04/23/2012

I am of Indian origin and I have heard SOME tales about this company. I think it is very good it is being scrutinised. The Indian government should do the same and check whether it is complying with India's labour laws, because apparently it is turning into another Foxxcon.

About visas, Americans need to stop complaining about jobs going to India. Show me how many technically qualified people are unemployed, virtually none. You can't expect tech companies to hire "religion" studies majors. Create more engineers and certainly American companies will hire them. The process to send a tech job offshore or to hire a foreigner is so much that most companies will avoid it but once they are forced to do it, it is done.

[Sundialsvc4]

01:34 PM on 04/23/2012

What I think they're talking about here, nonChristian, is a situation that is patently unfair to =all= concerned. Labor laws, =and= immigration laws, are designed for the protection of the laborer and of the immigrant. If you find that you have traveled thousands of miles from your homeland, only to find yourself in a situation where the labor and/or immigration laws of either your home country or your guest country are being violated ... then it is "at your expense" no matter who or where you are, and no one anywhere should tolerate that.

I see Indian folks ... good, earnest, smart folks ... living 17 to an apartment. (I counted.) I've seen plenty of situations where I asked them, "well, why don't you speak up about it?" And what I got in response was a silent, but pregnant =look= which said everything: "I Can't."

People, left to their own devices, WILL take untoward advantage of their fellow man. And absolutely no good thing will ever come of it. The Government of the United States should be enforcing its own law, and likewise the Governments of India should be doing the self-same thing. But these things don't happen on their own. As FDR once quipped: "I agree with you. Now, make me do it."

[special38x2]

09:00 PM on 04/23/2012

Nice post

[Ed Forney]

04:50 PM on 04/23/2012

You may be right, but It's pretty frustrating when you can't understand a damned word they say!

[Almaden]

11:49 AM on 04/23/2012

This is a blatant disregrad for the American immigration laws!! One can not blame them for the fact that our govern ment will not enforce immigration & work visas laws!!
And obviously bringing their own citizens based on these bogus applications to work in the US & keep money in their own citizen's pockets & within their own country!!
When the govern ment in this country is going to stand for legal American citizens?? If forign companies want to work in the US & have operations here then they have to employ Americans!!! Period!! Boycott INFOSYS & ban them from this country!!!

[Rexter]

11:47 AM on 04/23/2012

Too funny! DHS is worried about I-9 issues with Indian firm when there are 12 million undocumented workers/aliens/immigrants/whatever in the USA and probably 6 million of them have some serious I-9 issues.

To put it in perspective, here are a handful of workers from India we can investigate, and maybe find some violations. Or, I could walk out of my office and onto the street and find millions of people with definite violations. DHS is a farce, but so are the immigration laws. Just pick what you want to enforce, whatever is politically correct.

[special38x2]

09:02 PM on 04/23/2012

Point!

[tkns]

11:45 AM on 04/23/2012

It's funny, republicans are the ones that fear the "outsiders". Yet they are the ones embracing free trade, despite its horrendous effects on American families. Democrats embrace it completely-but at least they mouth a few token protests . But republicans -sigh-there is nobody worth voting for.

[david3830]

10:15 AM on 04/23/2012

Why are they not hiring American's

[Mr e MaN]

10:48 AM on 04/23/2012

not smart enough, alagedly, and not cheap enough.

[parlimentMike]

11:02 AM on 04/23/2012

They offer $35 an hour for Project Managers in some markets. That's 1099 with zero benefits. And it's a 6-month gig.

[mrbradw1961]

11:06 AM on 04/23/2012

At $35/hr one can afford their own benefits.

[squirt280]

10:03 AM on 04/23/2012

DHS protecting our Homeland (Hitler Term) is the same as a Wild Pack Wolfs protecting the Sheep.

[Don Clanton]

10:46 AM on 04/23/2012

Homeland
Noun

Wikipedia has an article on:
Homeland
homeland (plural homelands)
One’s country of residence.
One’s country of birth.
The traditional territory of an ethnic group.
(South Africa, historical) An area set aside for black South Africans under the policy of apartheid.

Notice, No Hitler references.

[Don Clanton]

10:48 AM on 04/23/2012

Hitler's preferred term was "Der Vatterland", the Fatherland.

[Dongflopper]

09:49 AM on 04/23/2012

India exporting job's to America? Unheard of, except for the fact the jobs are still going to their citizens!

[Proud Vietnam Veteran]

10:29 AM on 04/23/2012

And the moneys going homee to India!

[flying hawk]

04:37 PM on 04/23/2012

Fanned By another old Vet.

[parlimentMike]

11:07 AM on 04/23/2012

Part of the problem is the IT understanding of the people hiring these outsourcers. They fall for impossible low-ball numbers time after time, and end up reworking everything, so they then have to search out a low price to cover their previous fail.

[Saxton]

05:05 PM on 04/23/2012

But try to explain that to senior management.

[rehaha]

09:02 AM on 04/23/2012

Time for someone in government to stand up for Americans. We will not survive by letting people scam our immigration laws and steal jobs legal residents should be doing. Ban Infosys from US shores.

[hoosierhelen]

09:26 AM on 04/23/2012

I agree!

[parlimentMike]

11:09 AM on 04/23/2012

We have to stand up for Americans by voting out our representatives in Washington. John McCain led the IT outsourcing charge for Qwest back in the '90s

[tincup2005]

08:59 AM on 04/23/2012

We worry too much about leaving a good world to our children when we should instead be more concerned with leaving good children to the world. Our kids are falling behind the world in science and math and one reason is we coddle them, letting them spend more time on Facebook than putting the faces in text books. Our kids have become lazy and there is no one to blame but ourselves, their parents, who give them too much and ask too little in return.

[parlimentMike]

11:12 AM on 04/23/2012

Gross inequalities in our society have as much to do with that as anything else. The fight for the bottom in wages has taken both parents out of most homes for the same effective pay as one used to make.

The widening income gap isn't a symptom, but a cause of the problem.

[undrgrndgirl]

11:48 AM on 04/23/2012

amen. i'm glad to see someone else has caught onto this truth...except that i disagree that two incomes create the effective pay of one income of the past... depending on the rate of pay 3, 4 or even 5 full time incomes are needed to make the effective pay of the 50s -70s. my dad points out that back in the 60s the rule of thumb was to buy a home that was twice or three times your annual salary; try doing that anywhere in the u.s.!

[Ystorm]

08:37 AM on 04/23/2012

So to fix this mess we have to: Get rid of the "ICC" type of companies that India uses to get the visas here. We have to slap the idiot lazy people here to get a grip on reality and get a good education. We have to change the laws to benefit US companies not the global ones. Anything else?

[parlimentMike]

11:14 AM on 04/23/2012

We need to get Federal Agencies to enforce the rules rather than facilitate their avoidance.

[robertste998]

08:32 AM on 04/23/2012

Why not ask the GOP instead. They were the ones that sent American jobs there by the tens of millions. Don't worry, we will all be painting their toys for them at a fraction of minimum wage. Have you ever pulled a rickshaw? Have I got a job for you!

[Yolinda Beach]

09:14 AM on 04/23/2012

Sorry, the US citizens sent the jobs overseas. Buy made in the USA from American companies. Only you can bring jobs home. Do your part.

[emily00011]

09:57 AM on 04/23/2012

not that simple, first we need a decent wage to be able to "buy american". Shipping jobs overseas became an excuse to pay us less, therefore all we could afford is the cheap stuff made by cheap labor. Meanwhile the top executives pay themselves more and more.

[parlimentMike]

11:18 AM on 04/23/2012

When Wal-Mart advertised made in America they were not suffering from lack of customers. We expanded that chain sucking up American product by the camperload. Clinton opened up China. Wal-Mart corporate buyers did the rest.