Infosys shares rose more than 1 per cent on Wednesday after the IT major agreed to pay $800,000 (nearly Rs 5.6 crore) to settle allegations of misclassification of foreign workers and tax fraud in the US. In a statement early on Wednesday, Bengaluru-based Infosys said its agreement concludes investigation by the California Attorney General into allegations related to the payment of state payroll taxes for some employees traveling on B-1 visas dating back to 2006.
Infosys said that according to the agreement, the company strongly disputes the allegations and admits no wrongdoing. The agreement will result in the case being dismissed with prejudice, it added.
The agreement, Infosys said, was reached to avoid the time, expense, and distraction of protracted litigation on allegations dating back more than 13 years. "Infosys maintains robust policies and procedures to ensure adherence with all applicable regulations and laws," said Infosys, India's second largest IT services exporter.
The allegations pertain to the period between 2006 and 2017, when approximately 500 Infosys employees were working in California on Infosys-sponsored B-1 visas rather than H-1B visas, California Attorney General Xavier Becerra said.
This misclassification resulted in Infosys avoiding California payroll taxes such as the unemployment insurance, disability insurance, and employment training taxes.
On the Bombay Stock Exchange (BSE), the Infosys stock rose as much as 1.09 per cent to touch a share price of Rs 737.25 apiece at the strongest level during the session.
At 11:21 am, Infosys shares traded 0.78 per cent higher at Rs 735.00 apiece on the BSE, outperforming the benchmark Sensex index which was up 0.10 per cent as the markets gave up some of the gains after touching record highs.
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