Software-services company Infosys has agreed to pay $800,000 (approximately Rs 5.6 crore) to settle allegations of misclassification of foreign workers and tax fraud, a senior U.S. official said.
“Infosys will pay California $800,000 to resolve allegations that between 2006 and 2017 approximately 500 Infosys employees were working in California on Infosys-sponsored B-1 visas rather than H-1B visas,” California attorney general Xavier Becerra said in a statement on Tuesday.
“This misclassification resulted in Infosys avoiding California payroll taxes such as the unemployment insurance, disability insurance, and employment training taxes. H-1B visas also require employers to pay workers the local prevailing wage,” the statement noted.
Becerra in his statement pointed out that “Infosys brought in workers on the wrong visas in order to underpay them and avoid paying taxes”.
However, the Bengaluru-based IT firm denied the allegations and admitted no wrongdoing in an email response to Fortune India.
“Infosys’ agreement concludes the California attorney general’s investigation into allegations related to the payment of state payroll taxes for some employees traveling on B-1 visas dating back to 2006,” Infosys said, adding, “The agreement—which notes that Infosys strongly disputes the allegations and in which Infosys admits no wrongdoing—will result in the case being dismissed with prejudice and was reached to avoid the time, expense, and distraction of protracted litigation on allegations dating back more than 13 years.”
“Infosys maintains robust policies and procedures to ensure adherence with all applicable regulations and laws,” the IT firm added.