Cognizant Technology Solutions is facing renewed legal pressure in the US after a federal appeals court agreed to revisit allegations that the company defrauded the US immigration system.
The case centres on claims by former Cognizant executive Jean-Claude Franchitti, who filed under the False Claims Act. He alleges the company routinely flew workers to the US on L-1 and B-1 business visas instead of H-1B work permits to avoid higher government fees, even while assigning them to roles that legally required H-1B status.
Court filings also accuse Cognizant of paying H-1B employees less than the prevailing wage, which Franchitti says deprived the government of payroll tax revenue. A New Jersey district judge in 2023 ruled the suit could proceed, calling it a plausible claim of “an ongoing conscious business practice to circumvent immigration regulations.”
Cognizant, headquartered in Teaneck and one of the top sponsors of H-1B visas with 3,172 approvals last fiscal, rejected the allegations. The firm regulations will not be liable for fees on visa categories it did not file.
The visa dispute comes alongside another setback. A US jury recently found Cognizant liable for discriminating against non-Indian employees in Silicon Valley, claiming the company preferred “visa-ready” Indian workers. Cognizant said it was “disappointed” and would appeal.
The issue isn’t new to Indian IT. TCS, Infosys and HCL have all previously faced US lawsuits over alleged visa violations. The US Court of Appeals for the Third Circuit review could now set a precedent for how such cases are handled going forward.
