Cognizant to pay $509,000 in back wages

U.S.-based offshore outsourcing companies, has agreed to pay $509,607 to 67 workers for misusing a key temporary visa program.

The company violated the provisions of the H1-b visa program that require employers to pay visa holders at the same rates as U.S. workers in the same position, the U.S. Department of Labor said.

Cognizant failed to pay the 67 IT workers "the proper wages, failed to offer all H1-b workers equal benefits or eligibility for equal benefits, and failed to maintain required records," the department said.

The violations occurred between August 2006 and February 2008, said department spokeswoman Leni Fortson. She said the workers initially held three-year visas but didn't get a bump in seniority or pay when the visas were renewed for another three years.

Once alerted to the violations, Cognizant "agreed to future compliance and to pay all back wages," the department said.

The company would not comment on the agreement, said spokeswoman Hannah Sloane.

Cognizant provides software development and other computer services from offices around the world, employing more than 60,000 workers, mostly in India.

The H1-b program is intended to enable employers to temporarily hire qualified foreign professionals such as computer programmers, engineers, physicians and teachers, in the absence of U.S.-based applicants. Large corporations such as Microsoft argue that the visas enable them to hire the best workers from around the world, helping to make U.S. companies globally competitive.

Critics say employers use the program to hire foreign workers at lower-than-market pay rates for jobs that would otherwise be available to U.S. workers.

"It's a bit surprising," said Ron Hira, assistant professor of public policy at Rochester Institute of Technology, who has studied the H1-b visa program, referring to the violations.

"They are one of the leading offshore outsourcing firms," he said. "And the H1-b program is critical, it's part and parcel of their business model."

He noted that the visas are so important to Cognizant that its annual report cites the possibility of changes to the H1-b program as a "risk factor" to the company's health.

The last report, released in February, said that "our future success will depend on our ability to attract and retain employees with technical and project management skills from developing countries," and to secure visas for them to work in the U.S.

The report noted that the company was under investigation in connection with the H1-b program.

Trade magazine Computerworld, in a February report, found that Cognizant received the seventh-largest number of new H1-b visas last year. The company received 467 new visas, fewer than four large India-based outsourcing companies, as well as Microsoft and Accenture.