Infosys to pay $800,000 to settle worker misclassification, tax fraud charges

New Delhi : Infosys on Wednesday agreed to pay a whopping amount of $800,000 to California as a settlement against the allegations of misclassification of foreign workers and tax fraud.

Infosys will pay California USD 800,000 (nearly Rs 56 crore) to resolve allegations that between 2006 and 2017, approximately 500 Infosys employees were working in the State on Infosys-sponsored B-1 visas rather than H-1B visas, California Attorney General Xavier Becerra said.

The misclassification of the employees was apparently done to avoid California payroll taxes such as unemployment insurance, disability insurance, and employment training taxes.

H-1B visas also require employers to pay workers at the local prevailing wage, an official statement said.

"Today's settlement shows that attempting to evade California law doesn't pay. Infosys brought in workers on the wrong visas in order to underpay them and avoid paying taxes. With this settlement, California has been made whole," Becca said.

While agreeing to the settlement, the Infosys kept its point and claimed that they are not involved in any of the wrongdoings.

In 2017, Infosys had agreed to pay the State of New York USD 1 million to settle allegations of submitting wrong documents to federal authorities.

California initiated legal action against the Infosys after a whistleblower, an ex-employee, slammed company of wrongdoings for financial gains.

Palmer has sued the Indian company in 2017.