The United States Labor Department has opened an investigation into outsourcing companies Tata Consultancy Services and Infosys, for possible violations of visa rules for technology workers, says a report in the New York Times.
Shares of TCS fell 2 percent, while Infosys was down 0.99 percent at 3 pm today.
The investigation centres around Southern California Edison, an electric utility, which recently laid off more than 500 technology workers. Many of the them have claimed that they were made to train replacements brought in on H-1B visas from India by the two companies. Senators Richard Durbin (Democrat, Illinois), and Jeff Sessions (Republican, Alabama) announced the start of the investigation.
This comes after 250 employees of Disney were laid off in October. They were asked to train their replacements — who were immigrants on H-1B visas brought in by an Indian outsourcing firm — before they left the company. The experience was described as "humiliating" by one of the laid off workers.
Such incidents are raising questions in the US Congress over whether skilled immigrants arriving on temporary H-1B visas are complementing Americans workers or displacing them from their jobs. According to federal guidelines, such visas should be given to foreigners who have advanced skills to fill positions for which American workers cannot be found. But companies have taken advantage of legal loopholes so that they can avoid hiring American workers first or provide guarantees that their jobs will not be displaced, the report said.