The US Department of Labor has opened up an investigation against TCS and Infosys for possible violations of H-1B visa rules, indicating that there could be tougher regulations ahead for onsite workers.

As the campaigning for the 2016 US Presidential elections starts to gain steam, Indian outsourcers find themselves in the midst of yet another storm.

In the latest round, the Labor Department is investigating possible violations of rules for visas for foreign technology workers contracted with Southern California Edison, an electric utility company.

Senators Richard Durbin of Illinois and Jeff Sessions of Alabama announced the investigation after they were notified by the Department, according to reports.

Rigorous controls

A TCS spokesperson said in a statement that TCS maintains rigorous internal controls to ensure that it is fully compliant with all regulatory requirements related to US immigration laws, including those related to H-1B visas. An Infosys spokesperson said: “Infosys is committed to complying with US immigration laws. The Labor Department regularly selects a percentage of visa and labour condition applications for extra scrutiny in this industry, and we work closely to assist them in this activity. We have received no indication of any broader investigation of Infosys visa practices.”

This development could have larger ramifications, industry watchers warned. “There could be regulations passed that may outlaw Indian onsite workers displacing Americans en-masse,” said Rajkamal Rao, Managing Director, Rao Advisors, an immigration expert.

Industry body Nasscom said Indian IT companies will remain compliant with all US visa regulations and these negative sentiments would have a serious detrimental impact on the economic and trade relationship between India and the US.

Incidentally, these issues are cropping up a few days after Disney reportedly laid off 250 tech workers and replaced them with a top 5 Indian outsourcing firm.

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