The US Department of Justice recently announced it had reached a settlement with the IT consulting firm Infosys Corporation (Infosys) which included a record payment of US$34 million in civil fines. The investigation arose out of a whistleblower case filed by a manager who alleged that the company misused the B-1 visitor visa in order to circumvent the H-1B work visa process.

According to court documents and the settlement agreement, the government alleged that Infosys circumvented the law and governmental oversight of the H-1B visa program by “knowingly and unlawfully” using B-1 visa holders to perform skilled labor in order to fill positions in the United States for employment that would otherwise be performed by US citizens or require legitimate H-1B visa holders. The complaint filed against the company also alleges it did so in order to increase profits, minimize costs of securing visas, increase flexibility of employee movement, obtain an unfair advantage over competitors, and avoid tax liabilities. The government also alleged that Infosys failed to properly maintain I-9 records for many of its foreign nationals in the United States as required by law.

The settlement agreement includes civil forfeiture fines of US$10 million, a civil penalty fine of US$24 million and continued auditing of the company’s use of B-1 and H-1B visas and its I-9 compliance. To date, this represents the largest civil penalty ever levied against a company for immigration-related violations.

While this landmark case arose out of the alleged misdeeds of one company, the impact will likely be felt by all employers utilizing B-1 and H-1B visas. We expect to see not only increased scrutiny by immigration and consular adjudicators of these visa categories but possibly the rejuvenation of Congressional efforts to restrict the use of the B-1 or H-1B visa. In addition, the focus on the company’s I-9 practices sends a message to all US employers that the government is continuing its efforts to enforce these laws and hold employers accountable for sloppy or improper employment verification practices.