A US court recently refused to dismiss a lawsuit against IT giant Cognizant for defrauding the federal government’s worker visa programme.
As per a lawsuit filed by a former executive under the False Claims Act (FCA), Cognizant — one of the largest and most renowned sponsors of H-1B visas for foreign information technology specialists — had been bringing workers to the US using business or intra-company visas, instead of making use of the H-1B work permits, which are more expensive.
Jean-Claude Franchitti, a former assistant vice president of a New Jersey-based company called Teaneck, accused Cognizant of underpaying for visa costs for its foreign employees by not applying for the required H-1B visas but instead for the L-1 and B-1 visas.
Last week, the United States District Judge for the District of New Jersey, Peter Sheridan, said the company must pay the fee for the privileges associated with its desired visa. In an argument, the IT giant claimed that the FCA did not apply to records and statements made under the US Internal Revenue Code.
“By paying for L-1 and B-1 visas but directing its employees to perform work that required the more expensive H-1B visa, Cognizant decreased—and made false statements material to—its obligation to pay money to the government,” the Judge was quoted as saying in his order.
“The internal email correspondence submitted by Franchitti is plausibly sufficient to allege that Cognizant committed this violation knowingly. Finally, Cognizant’s false statements are material because if it accurately represented the nature of its employees’ work, its visa applications would likely have been rejected or its employees’ visas revoked, consistent with USCIS policy and practice,” he wrote.
The Judge noted that although the company had not violated tax laws, it could be violating immigration laws.
“In sum, because Franchitti’s claims concern a violation of the immigration – not tax – laws, and because the secretary of labor – not the IRS – is the authority tasked with enforcing the prevailing wage provision, the tax bar does not apply here,” the Judge said.
Cognizant, which has maintained a large base in India, applies the appropriate visa category to deploy staff on American projects.
The H-1B is a visa in the United States under the Immigration and Nationality Act, section 101(a)(15)(H). This visa allows US employers to employ foreign workers in speciality occupations temporarily. The duration of stay is three years and can be extended to six years. After this period, however, the visa holder may have to reapply.
To remain in H-1B status, a person already in the status must continue to be employed by their employer. If their employment ends for any reason, they must leave the United States. They can, however, continue to stay in the US if they apply for and are granted a change of status or if they manage to find another employer compatible with the H-1B status.
The H-1B visa has its roots in the H1 visa of the Immigration and Nationality Act of 1952. The Immigration Act of 1990 created the split between H-1A (for nurses) and H-1B.