Technology companies including Infosys and Tata Consultancy Services, may find themselves in the line of fire as anger against outsourcing in America turns bellicose as a new government led by Donald Trump takes charge in the world¡¯s biggest market for information technology services.
In what many view as a sign of things to come, the US Labour Department sued software giant Oracle, earlier this week, accusing the California headquartered company for discriminatory hiring practices against White, Hispanic and African-Americans in favour of Asians, particularly ¡°Asian Indians¡±.
PTI
¡°I would expect to see a rise in the number of lawsuits which are then further amplified by a populist press,¡± said Peter Bendor-Samuel, CEO of IT consultancy firm, Everest Group, adding that rising protectionism in both the US and the UK fosters an environment which encourages law suits. Samuel also sees ¡°increased scrutiny¡± from US regulators creating more friction.?
For their part, Indian firms such as Infosys and TCSBSE -0.12 % are bracing to deal with changing circumstances. ¡°We continue to hire and in vest locally. However, given the skill shortages in the US and the availability of technically skilled workforce in various global markets, we also rely upon visa programs to supplement these skills,¡± said Infosys COO Pravin Rao.?
¡°In addition, the president is a seasoned entrepreneur and as such we expect the administration to be business friendly and innovation friendly,¡± said Rao. TCS and Oracle declined comment.?
The $150-billion Indian outsourcing industry has been a favourite punching bag of American politicians, of all hues, for over a decade. While it is common practice for politicians ¡ª from senators to Presidential hopefuls ¡ª to take pot shots at outsourcing, Trump is the first to have campaigned virulently against outsourcing and then be elected to the highest office in the country. Indian firms such as Infosys and TCS along with several American firms too have been subject to law suits and state scrutiny over alleged visa misuse and discriminatory practices in the past few years.?
AFP
¡°American tech workers are now grasping that Equal Employment Opportunity laws protect them and that prestigious law firms are willing to take these cases on contingency,¡± said Donna Conroy, executive director of the Chicago-based tech advocacy group Bright Future Jobs. She added that US Equal Employment Opportunity Commission can also independently initiate investigations against an employer ¡ª without an aggrieved party.?
The possibility of disgruntled employees taking the legal route for old grievances is also high, say industry watchers. A worker in America has up to seven years, after termination, to file a lawsuit against his employer, said Rajiv Dabhadkar, founder of the National Organisation for Software and Technology Professionals, which works for Indian workers overseas.?
¡°As the lawsuits by American citizens would increase, state authorities will be forced to scrutinise contracts with offshore companies that manipulate the wages of their foreign employers to displace resident workers. Contracts could be terminated or not extended,¡± said Dabhadkar.
ET
Indian IT companies like TCS and Infosys are no strangers to legal troubles in the US. US national Jack Palmer triggered a US investigation of Infosys¡¯ visa practices after he alleged possible visa violations at the company in 2011. While he lost the long-drawn battle in the Alabama court in August 2012, he filed a fresh lawsuit against the firm demanding reappointment and compensation for alleged wrongful termination in 2014. Infosys also had to pay $34 million to end a federal investigation into visa fraud and errors in its hiring records. In April 2015, a former American employee sued TCS alleging it favoured workers of South Asian descent.?
ALSO READ:?Here's Why Indian Job-Seekers Should Be Concerned About US Proposed Changes In H-1B Visa Policy
Patrick Thibodeau, national correspondent, Computerworld, told ET that the Barack Obama administration never pursued a national origin discrimination case against any IT offshore industry firm (or the company that hired the contractor). ¡°But the Trump administration may be different.¡±?
TOI
The Trump administration can bring about H-1B reform in three ways. ¡°It can issue executive orders that change some of the rules around the work visa, it can push for legislative reforms in Congress, and it can bring court cases accusing firms of discrimination when they replace a US worker with a visa holder. The Trump administration is likely to use all three approaches,¡± he said. In his confirmation hearing for the post of attorney general of the US, Senator Jeff Sessions reiterated that the Trump administration will push for legislative reform to curb what he termed as ¡°abuse of H-1B visas for foreign workers¡±.?
IT industry body Nasscom which is in the process of sending a delegation to meet US policymakers is hopeful of Indian companies coming out clean. ¡°Our companies operate in more than 80 countries and work with more than 75% of Fortune 500 companies,¡± said Shivendra Singh, vice-president, global trade development, Nasscom. ¡°They follow the due process of law and meet regulatory standards.¡±?