The U.S. Labor Department has cleared Infosys Ltd of any wrongdoing and closed its investigation after American technology workers at Southern California Edison complained their jobs were wrongfully outsourced to foreigners working on H-1B visas, Infosys has confirmed.
“Infosys fully cooperated with the (Department of Labor) in this activity,” the company told Reuters in a statement, noting the company was confident from the start that it had complied with U.S. immigration laws.
The Labor Department is still investigating similar complaints by U.S. workers into Tata Consultancy Services Ltd., a second IT firm hired by Southern California Edison, and HCL Technologies, an IT firm that Disney hired last year as part of a restructuring of its Orlando-based IT division, a department spokesman said.
H-1B visas are often used by the technology sector to bring highly skilled foreign guest workers to the U.S. Critics say the laws governing the visas are lax, and make it too easy to replace U.S. workers with cheaper, foreign labor.
Separately, the Justice Department is looking at whether HCL, Tata, Infosys, Disney and Southern California Edison discriminated against U.S. workers on the basis of citizenship, according to a person familiar with the matter.
The review, which may not become a formal investigation, was sparked after the Labor Department referred complaints it had received from workers.
Infosys said it had not received “any indication” of a review by the Justice Department.
The scrutiny by U.S. officials comes after the New York Times and other publications reported that laid-off American IT workers at Disney and Southern California Edison were being forced to train their H-1B replacements in order to receive severance.
Tata said the company is cooperating with the Labor Department’s ongoing probe and is “fully compliant” with U.S. immigration laws. Southern California Edison said its contracts with Infosys and Tata require both firms to follow all “applicable laws.”
Disney declined to comment on the U.S. government reviews. A spokesman said the company’s IT restructuring has led to a net increase of about 70 new in-house jobs. HCL declined to comment.
The lay-offs have prompted an outcry from some U.S. senators, several of whom also called for probes into abuses.
Companies such as Infosys that have a workforce composed of 15 percent or more H-1B workers are required to try recruiting U.S. workers first and attest they are not displacing Americans.
But they are exempt from these requirements if they pay H-1 B workers more than $60,000 or hire those with a graduate degree.
Experts who have studied federal H-1B pay data say that in the vast majority of cases H-1B workers are paid more than $60,000, complicating enforcement of discrimination claims by the Justice Department or wrongful displacement at the Labor Department.
Further, the Labor Department cannot launch an investigation into alleged H-1B visa abuses unless it receives a complaint from a worker or credible third party.
“Qualified American workers are going to keep getting replaced by less expensive foreign workers,” said Iowa Republican Senator Charles Grassley, one of several lawmakers planning to introduce a bill this year to bolster the Labor Department’s powers.
“Current law hamstrings the Labor Department so bad actors go unchecked.”