California has settled with an India-based technology company that it accuses of misclassifying foreign workers and related tax fraud, the state attorney general’s office said Tuesday.
Infosys Limited, a business consulting, information technology and outsourcing company, and its subsidiary, Infosys BPM Limited, will pay California $800,000.
The company brought in workers using the wrong visas to underpay them and avoid paying California payroll taxes such as unemployment insurance, disability insurance and employment training taxes, Attorney General Xavier Becerra said in a news release.
About 500 Infosys employees were working in California on company-sponsored B-1 visas rather than H-1B visas from 2006 and 2017, the state said. Aside from paying state taxes, H-1B visas also require employers to pay workers the local prevailing wage and can be challenging to obtain because there are a limited number available each year.
The settlement “shows that attempting to evade California law doesn’t pay,” Becerra said in a statement.
The company said the settlement avoids the time and expense of litigation and notes that Infosys strongly disputes the allegations and admits no wrongdoing.
The company has annual revenue of $11 billion, and Becerra said the settlement covers California’s losses.
A whistleblower who brought the allegations to the attention of state officials will receive 15% of the settlement under state law.