New York(Sharemasterindia.com): The US government has opened an investigation against two of the biggest Indian outsourcing companies, Tata Consultancy Services (TCS) and Infosys, for possible violations of H1-B visa rules, according to a report.
"The Department of Labor has opened an investigation into two India-based outsourcing companies for possible violations of rules for visas for foreign technology workers under contracts they held with an electric utility, Southern California Edison," the New York Times reported.
Shares of TCS fell 2 per cent on Friday, while Infosys' shares declined nearly 1 per cent.
Infosys in a statement said that it is committed to complying with US immigration laws.
"The US Department of Labor (DOL) regularly selects a percentage of visa and labor condition applications for extra scrutiny in this industry, and we work closely with the DOL to assist them in this activity in the ordinary course of our business. We have received no indication of any broader investigation of Infosys visa practices." the Infosys statement read.
Indian outsourcers are among the biggest recipients H1-B visas, which are intended for highly skilled workers. TCS and Infosys derive their biggest share of revenues from US markets.
Southern California Edison had recently laid off more than 500 technology workers, many of who claimed that they were made to train their replacements who were immigrants on the temporary work visas brought in by the Indian firms.
Senators Richard Durbin of Illinois and Jeff Sessions of Alabama announced the investigation after they were notified by the labor department, the NYT report said.
The US Labour Department's move comes days after the New York Times reported that hundreds of employees at entertainment giant Walt Disney were laid off and replaced with Indians holding H1-B visas.
About 250 Disney employees were told in late October last year that they would be laid off and many of their jobs were transferred to immigrants on H1-B visas brought in by an outsourcing firm based in India, the report said. The NYT report also cited the layoffs at the Southern California Edison power utility, saying that they were "raising new questions about how businesses and outsourcing companies are using the temporary visas, known as H-1B, to place immigrants in technology jobs in the United States."
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