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US tough on Indian IT Outsourcing, to check American lay-offs

According to US media reports released last week, the US Labor Department plans to investigate whether top outsourcing corporations can use H-1B visa workers to replace fulltime technology workers.

This action came in response to the lay-off of thousands of American workers and replacing them with H-1B visa holders, by a number of US employers. In addition, many of the replaced American employees report that they have been forced to train the foreign workers who are taking their jobs.

As a result, the US government is investigating multiple outsourcing contract involving Indian IT firms such as contracts with Southern California’s Edison, Walt Disney and Fossil with India’s IT outsourcing giants TCS & Infosys.

According to the IT industry body Nasscom’s president R Chandrashekhar, “An investigation could have long-term ramifications on future contracts between US corporations and Indian IT firms and that it would intensify efforts to resolve the issue. Undoubtedly (these probes) would have a damaging impact on future business. It is a serious concern.”

On the other hand, Infosys and TCS issued statements saying they are fully compliant with US immigration and visa laws.

“Infosys is committed to complying with US immigration laws. The US Department of Labor (DOL) regularly selects a percentage of visa and labor condition applications for extra scrutiny in this industry, and we work closely with the DOL to assist them in this activity in the ordinary course of our business. We have received no indication of any broader investigation of Infosys visa practices.”

TCS said that the company “maintains rigorous internal controls to ensure we are fully compliant with all regulatory requirements related toUS immigration laws.”

However, the industry experts said the politically charged debate on outsourcing is bound to heat up over the coming months with the US elections on the horizon.