Cognizant Abused H1B Visa Program To Save Money; US Court Takes Action

The company underpaid visa costs by applying for the L-1 and B-1 visas, instead of the costlier H-1B.

Cognizant has been accused of misusing the US government’s worker visa programme.

A case was filed by Jean-Claude Franchitti accusing Cognizant of bringing workers to the US using business or intra-company visas, instead of using the more expensive H-1B work permits.

A US court has refused to dismiss the lawsuit filed under the False Claims Act (FCA).


The Accusation

Franchitti is a former assistant vice president of Cognizant.

He said that the company underpaid visa costs for its foreign employees by applying for the L-1 and B-1 visas, instead of the costlier yet compulsory H-1B.

Cognizant along with numerous other IT services firms such as TCS and Infosys use their large base of Indian workers and send them to work on projects in the States.

What Are The Visas?

Cognizant arranges for its foreign workers 3 different types of visas.

  • H-1B- This is a work permit issued for specialised skills, frequently used for computer programmers.
  • L-1- This visa is issued for transfer of employees within the company for a certain period.
  • B-1- Also known as a business visa, this is issued for those scheduled to attend conferences, negotiate contracts and participate in training.

The Verdict

The judge ruled that the company is obliged to pay the required fee to avail the benefits of the desired visa.

The firm had posed a counterargument that the FCA is not applicable to records and statements made under the US Internal Revenue Code.

The judge replied that Cognizant had paid for L-1 and B-1 visas for those employees who were made to perform work which mandated the costlier H-1B visa.

Why Did Cognizant Do It?

The court took Franchitti’s side and said that the proof he submitted was sufficient to prove that his former company committed the violation with full awareness.

Cognizant took the fraudulent step because its visa applications would have been either rejected or revoked if it disclosed the true nature of its employees’ work.

The rejection would have come about in accordance with USCIS policy and practice.

Silver Lining

The firm can breathe a sigh of relief at the fact that allegations that it had purposely submitted false documentation including fraudulent invitation letters and job descriptions has been dismissed.

The case has also been noted to be in violation of immigration laws but not tax laws.

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