TCS to pay $29.8 m to settle wage dispute with ex-employees

Rajesh Kurup Mumbai | Updated on March 12, 2018 Published on February 26, 2013

Tata Consultancy Services, the country’s largest software exporter, has settled a wage dispute in the US by agreeing to pay $29.8 million (about Rs 160 crore).

The suit, which had alleged violation of the rights of non-US citizen workers in the US, was filed in 2006 by two former TCS employees. The employees — Gopi Vedachalam and Kangana Beri — had been sent from India to the US to work on projects.

According to the lawsuit filed in California, the employees had alleged that the company deducted taxes from their Indian salaries. They had accused the company of forcing them to sign documents to pay federal and state tax refunds.

The terms of the settlement were described in a filing on February 21 with the US District Judge Claudia Wilken in Oakland, California. The case was certified as a class, or group, lawsuit for all non-US citizens employed by the company in California from February 14, 2002, to June 30, 2005. In June 2006 and later in April 2007, Tata America International Corp, TCS and Tata Sons filed a motion to dismiss the case, stating it should be arbitrated in India rather than in the US.

On the settlement, a company spokesperson said: “TCS believes that it always acted appropriately, notwithstanding the allegations in this case. The company has admitted no wrongdoing and none has been found by the court. It agreed to settle this matter to eliminate any on-going distraction to its associates and management”..

The settlement also includes Tata Sons, the holding company of all Tata group firms.

On Tuesday, TCS shares closed up 1.56 per cent at Rs 1,494.30, touching a new high on the BSE.

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Published on February 26, 2013
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