Forbes reports today:
India’s second-largest outsourcing firm, Infosys, announced that it has agreed to pay $34 million to complete a civil settlement and conclude investigations by the U.S. Attorney’s Office and resolve all issues with the U.S. Departments of State, Immigration and Homeland Security relating to I-9 paperwork errors and visa matters.
The settlement is the largest ever visa fine imposed by the U.S. government. Investigators were looking into allegations that the company had illegally placed workers with its American customers on the quick-to-get, short stay B-1 visas usually meant for business visitors attending meetings or conferences instead of the longer duration, more expensive H-1B visas which take longer time to procure.
I expect to see more of these types of stories in the coming months and years. It is well known in the IT industry at this point that these firms act as body shops bringing young talent over to the US under less than ideal working conditions, and work them hard under labor conditions that draw parallels to indentured servitude.
On the flip side, the companies that have these workers on projects are getting poor quality work for several reasons: 1) IT work is thinking work, people under adverse working conditions have a harder time focusing and making good decisions, 2) these companies train the workers on how to get through the interview even if the worker doesn’t have the skills required for the job and they don’t typically provide training to the worker, and 3) workers under these conditions don’t take a long-term view with the contracting company, which leads to poor architecture decisions and design practices.
Finally, the over-reliance on outsourcing to “low cost” labor providers in IT has a negative impact on the US economy. It puts downward pressure on IT wages, it reduces the available job pool for American citizens, and it results in massive outflows of capital through remittances.
All this being said, many IT workers of Indian (or other descent) naturalize in the US through the legitimate routes and processes and have the right qualifications. They are employed by good companies with fair working practices and are not being exploited. Obviously the analysis above does not apply to people working and living under the right conditions.
The point is that there are too many outsourcing companies that exploit their workers creating a negative human impact and I for one am happy to that beginning to be addressed.