NEW YORK: Going by a report in New York Times, the US government has opened an inquiry against two of the major Indian outsourcing companies for probable violations of H1-B rules.

“The Department of Labour has opened the investigation against Tata Consultancy Services (TCS) and Infosys for “possible violations of rules for visas for foreign technology workers under contracts they held with an electric utility Southern California Edison,” the NY Times said.

Both TCS and Infosys obtain their biggest share of revenues from the US markets. While Infosys went down by 2 per cent on Friday, the shares of TCS dropped by 3.35 per cent.

Intended for high skilled workers, Indian outsourcers are one of the largest beneficiaries of the H1-B visas.

The report further added: The power company had recently laid off more than 500 technology workers amid claims that many of those laid off were made to train their replacements who were immigrants on the temporary work visas brought in by the Indian firms. Senators Richard Durbin of Illinois and Jeff Sessions of Alabama announced the investigation after they were notified by the labor department.

The step from the US Labor Department comes days after the paper reported that several employees at the Walt Disney were laid off and swapped with Indians holding H1-B visas.

According to that report, about 250 Disney employees were told in late October last year that they would be laid off and many of their jobs were transferred to immigrants on H1-B visas brought in by an outsourcing firm based in India.

Further citing the layoffs at the Southern California Edison power utility, it added that the layoffs are ‘raising new questions about how businesses and outsourcing companies are using the temporary visas, known as H-1B, to place immigrants in technology jobs in the United States.’