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US opens probe against TCS, Infosys for H1-B visa violations

US opens probe against TCS, Infosys for H1-B visa violations
The Department of Labour has opened the investigation against Tata Consultancy Services and Infosys 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 said. 

The power company had recently laid off more than 500 technology workers amid claims that many of those laid off 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 department, the report said.

The move by the Labour Department comes days after the NYT had 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 had said.

It had also cited the layoffs at the Southern California Edison power utility, saying that the layoffs are “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.” Meanwhile, shares of TCS and Infosys were under pressure today, falling by up to 2 <g data-gr-id="32">per cent</g>, following reports that the IT majors are being probed in the US for alleged visa rule violations. The <g data-gr-id="33">scrip</g> of TCS fell by 2.29 per cent to end at Rs 2,512.05 on BSE. During the day, it lost 3.65 per cent to Rs 2,477. Shares of Infosys also went down by 1.26 per cent to Rs 1,976.65. It dipped 2.31 per cent to Rs 1,955.50, intra-day.

“Software major TCS was in <g data-gr-id="26">news</g> today after market reports that the US is probing into probable violations of H1B visas,” said Rakesh Goyal, Senior Vice President at Bonanza Portfolio.  

Nasscom sees attempt to portray Indian IT sector negatively
 With TCS and Infosys being probed in the US for alleged visa rule violations, industry body Nasscom on Friday said attempts were being made to portray the Indian IT sector negatively without paying attention to “facts and logic”. Asserting that Indian IT firms have always remained compliant with the US visa regulations, Nasscom President R Chandrashekhar said its members continue to cooperate with the US authorities in respect of any requests for information. Asked whether he feels the issue could be a political rhetoric ahead of the Presidential elections in the US, Chandrashekhar said it is “unfortunate” that attempts are being made in some quarters to portray the contribution of Indian IT companies in a negative light and “to create negative sentiments about them by appeal to emotion rather than to facts and logic”. Such efforts would have “serious detrimental impact” on the strategic and mutually beneficial economic and trade relationship that the two countries are striving to nurture, Chandrashekhar said. The US, which is preparing for Presidential elections in 2016, is the largest market for the over $140 billion Indian IT services industry. Exports account for over $98 billion. Nasscom, which has been traditionally acting as a lobby group in the US on behalf of the Indian IT sector including on visa-related issues, said it is “stepping up” efforts to engage with the American government and lawmakers. 
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