yossarian6 - Fotolia

Indian suppliers investigated by US authorities over potential visa abuse

US government investigates potential breaches of immigration rules by IT suppliers

Infosys and Tata Consultancy Services (TCS) are being investigated by the US government over their practice of bringing staff to the US on temporary visas.

The US Labor Department will attempt to ascertain whether the Indian companies used temporary visas to replace US staff. The Indian staff were working at electric utility Southern California Edison.

As in the UK, offshore suppliers can gain visas that permit them to bring staff from India to the US if there is a shortage of the necessary skills. But there are allegations that such suppliers are bending the rules.

In the UK, the visas are known as intra-company transfers (ICTs) and permit companies that have a UK operation to bring staff in if they meet certain salary thresholds and if there is a skills shortage. The equivalent visas in the US are known as H-1Bs.

The UK government recently announced it had instructed the Migration Advisory Committee (MAC) to examine proposals to reduce the number of workers coming into the country from outside Europe. 

It will look at the minimum salary that must be paid to staff coming to work in the UK, as well as the where skills shortages exist.

A proposed increase in the minimum salary paid to staff brought to the UK by overseas suppliers – which could make it a less attractive option for those suppliers – will be fast-tracked by the government.

“This government is on the side of working people,” said prime minister David Cameron. “In the past, it has been too easy for businesses to recruit from overseas, undermining those who want to work hard and do the right thing. As part of our one-nation approach – pushed forward by my Immigration Taskforce – we have asked the Migration Advisory Committee to advise on what more can be done to reduce levels of work migration from outside the EU.”

Read more about ICTs

The US government has taken action before. In 2013, Infosys was forced to set aside $35m in relation to a US case that alleged abuse of visa requirements when offshore staff were brought to the US.

With the US presidential election next year, tackling immigration is seen as a vote winner. With large numbers of relatively low-paid Indian IT professionals on US soil working, local workers feel they are disadvantaged and unable to compete on price.

“This appears to be part of the build-up to the US elections next year,” said Mark lewis, outsourcing lawyer at Berwin Leighton Paisner. “In the UK, the big question is, Are there enough suitable qualified workers?”

According to freedom of information requests from website BackTheMac – a lobbying group that campaigns against purported abuse of ICT rules – in December 2014 there were 35,565 ICT employees in the UK from India, out of a total of about 60,000.

IT workers account for a large proportion of the ICT numbers. In December 2013, for example, at the top of the profession alone there were more than 12,000 IT software professionals, nearly 6,000 programmers and software development professionals, and just under 5,000 IT business analysts, architects and system designers.

Read more on IT outsourcing