Firm underpaid foreign workers, owes them $2.4m
Patni violated visa rules on high-skill staffers, US says
Patni Computer Systems Ltd., an Indian outsourcing firm with its US headquarters in Cambridge, has agreed to pay more than $2.4 million after federal investigators found it underpaid hundreds of employees hired under a controversial visa program for highly skilled foreign workers.
The Department of Labor said Patni hired 607 employees to do computer work in 32 states in 2004 and 2005, but they were not paid prevailing local wage rates, as required under the H-1B visa program.
Patni will pay the workers more than $2.4 million under an administrative settlement, said John Chavez, a regional spokesman for the department.
The company, headquartered in Mumbai, was started by Narendra K. Patni , a Massachusetts Institute of Technology graduate who conceived one of the earliest "offshore" business models with his wife, Poonam, in the early 1970s. They currently divide their time between Boston and India.
A spokesman for the company's US operations said it has contacted the employees due to receive money. The spokesman, Jason Ouellette , said the wage violation "was the result of an accounting error." He declined to elaborate.
The visa program permits US companies to temporarily hire nonimmigrant foreign workers in professional occupations, and is heavily used in high-technology industries in need of highly skilled workers. Employers are required to offer prevailing wages to avoid undercutting US workers' pay.
Patni is one of several Indian firms operating large technology services centers in the United States to handle jobs outsourced from US companies. Patni provides information technology consulting, software development, and other business services.
The company went public on the New York Stock Exchange in December 2005, pricing its shares at $20.34 each. The shares closed at $26.50 yesterday, up 43 cents, or 1.65 percent for the day.
Patni was among nine India-based companies that recently were sent letters by US senators Chuck Grassley, Republican of Iowa, and Dick Durbin, Democrat of Illinois, who question their use of the visa program and their wages. The nine firms collectively used nearly 20,000 of the 75,000 H-1B visas that were available last year.
Grassley said the visa program has been subject to fraud and abuse.
But the US high-tech industry has long argued that too few visas are available to meet their needs. This year, the limit for applications for the visas was reached in record time, and companies including Microsoft Corp. want Congress to authorize more visas.
Robert Weisman of the Globe staff contributed to this report.