Infosys DOJ Investigation: H-1B Worker Classification Probe

Infosys says the Justice Department is investigating how it classified some H-1B workers in immigration filings, two weeks after the Labor Department froze its green card sponsorship.

Infosys, one of the largest H-1B employers in the United States, says the Justice Department is investigating how it classified some of its H-1B employees in immigration documents filed with federal agencies. The Infosys DOJ investigation appears in a short note to the company’s financial statements for the quarter ended Sept. 30, approved by its board on Oct. 23. It opens a second federal front: on Oct. 8, the Labor Department suspended Infosys and seven other employers from PERM, the labor certification program that starts most employment-based green cards.

What the Infosys DOJ investigation note says, and what it leaves out

Under the heading “Government Investigation,” the note says the department “is conducting an investigation regarding how the Company classified certain H-1B visa-recipient employees in immigration documents filed with certain U.S. government authorities.” Infosys adds that it “is engaged in discussions with the DOJ regarding its ongoing investigation and continues its own inquiry,” and that it cannot yet say whether the matter could have a material adverse effect on its business. The company’s statements for the quarter ended June 30, furnished to the SEC in July, carried no such note.

The note does not say whether the inquiry is civil or criminal, how many workers it covers or which agencies received the filings. Much turns on the word “classified.” An H-1B employer classifies a job on the labor condition application filed with the Labor Department, where the occupational code and wage level set the minimum pay, and again on the Form I-129 petition filed with USCIS. Placing a job in a lower-paid occupation or wage level than the work warrants lowers what the employer owes. Whether that is the issue here is unknown, though the plural “authorities” is consistent with filings that went to more than one agency.

Employees of Infosys who’s current H1b extension or H1b transfer is pending will be impacted till the investigation comes to a conclusion, and USCIS starts processing all the H-1b petition again. Infosys will have no choice but to transfer employees (who’s H1b extension are pending) from USA to to other foreign offices before the H-1b extension employees hit their 240 days from the expiry of I-94. Employees who’s H-1b transfers are pending have to face uncertainty since they will not know if their H-1b will be ultimately approved but legally they can be employed till their H-1b transfer petition is adjudicated even if it takes more than 240 days from expiry of I-94. If USCIS concludes based on their investigation that the correct wage levels were not used based on the experience required for the roles, then they will issue Request for Evidence (RFE) or Notice of Intent to Deny (NOID) after the conclusion of investigation on all pending cases. It will be most likely a boilerplate RFEs or NOIDs on all pending H-1Bs and if the question is about incorrect use of wage level then it is almost difficult to cure this deficiency since USCIS would expect Labor Condition Application (LCA) validity starting the validity date requested in the H-1b petition. Applying now for a LCA and getting a back dated validity is not possible. Infosys will have to respond to all the RFEs or NOIDs and if the H-1b is denied there will be no option but to terminate the H1b employee and move them out of USA to other offices in Europe, America or Asia. Employees can still technically transfer their H-1b to another employer if they are willing to file a H-1b based on a H-1b pending with a company like Infosys. Same is the situation with employees of other companies like Infosys who are going through investigation. Even if an employee finds an employer who is ready to file a H-1b transfer, in the event the H-1b of Infosys gets denied then the H-1b transfer with the new company will be approved for consular processing. Right now the Presidential Proclamation has been stayed by two Courts but we are not sure how long it will last. So even if a H-1b is approved for consular processing there is uncertainty about the $ 100,000 fees and also the fact that H-1b visa appointments are almost non-existent in India.

A $34 million precedent and a large H-1B workforce

Infosys has been here before. In 2013 it paid $34 million, then the largest payment in an immigration case, to resolve civil allegations from federal prosecutors in Texas that it used B-1 business visitors for skilled work, misstated the purpose of travel to consular officers and failed to keep proper Forms I-9 for many foreign employees. No criminal charges were filed. The new note does not link the current inquiry to that case.

The company still keeps thousands of workers in H-1B status. In fiscal 2025, USCIS approved 263 Infosys petitions for initial employment, 32nd among employers, and 2,634 petitions for continuing employment, 10th, with a denial rate of about 1 percent, according to H-1B Employer Data Hub figures compiled by the National Foundation for American Policy, a research group that studies trade and immigration. The continuing-employment figure is the better gauge of how many current workers could be touched by questions about past filings. The program as a whole is dominated by Indian workers, as India’s share of H-1B approvals shows.

What it means for Infosys workers and the PERM freeze

On paper, nothing changes for Infosys employees today. An investigation of an employer does not cancel approved petitions. USCIS can revoke an H-1B approval for fraud or material misrepresentation, but under 8 CFR 214.2(h)(11) it must first send a notice of intent to revoke and let the employer respond. No such step has been reported.

The sharper consequence may fall on green cards. Officials cited no regulation when they announced the PERM suspension on Oct. 8, as coverage of the Indian firms in the PERM freeze noted. The closest fit, 20 CFR 656.31(b), lets the Labor Department halt processing for an employer under investigation for possible fraud or willful misrepresentation for up to 180 days, with extensions tied to whether an indictment is returned. An open Justice Department inquiry is the kind of fact that could keep such a hold running longer. Infosys told Indian stock exchanges on Oct. 10 that it did not expect a significant financial effect from the PERM suspension, Reuters reported. Its new note is more guarded.

The disclosure fits a pattern of enforcement aimed at named employers, from the PERM freeze on eight technology and outsourcing firms to Cloudera’s $2 million settlement and two-year PERM bar. Cloudera’s case, like the department’s earlier PERM cases against Apple and Facebook, ended in a negotiated settlement. The Infosys note leaves open both that path and something more serious.

What to watch

SEC filings: the Form 6-K that furnishes the September-quarter statements, and any added detail in Infosys’s next annual report on Form 20-F.
Justice Department action: any settlement or charging document, which would show what “classified” meant.
The PERM suspension: whether the Labor Department publishes a written basis and duration for the Oct. 8 hold.

This article is for general information and is not legal advice.

Sources

Vasanth Vaidyanathan, Esq.

Administrator

Vasanth Vaidyanathan is an immigration attorney with over 20 years of experience focused exclusively on U.S. immigration and nationality law. He holds a LL.M. from California Western School of Law, San Deigo and advises individuals and businesses on employment and family-based immigration matters, including H-1B, PERM, EB categories, and adjustment of status. He has also been a featured speaker at immigration seminars across the U.S. To reach Vasanth visit: https://www.vnathan.com/

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