Washington, December 18: Infosys, India's top IT major, has agreed to pay USD 800,000 to settle allegations of misclassification of foreign workers and tax fraud, officials announced Tuesday.

Infosys will pay California USD 800,000 (nearly Rs 56 crore) to resolve allegations that between 2006 and 2017, approximately 500 Infosys employees were working in the State 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. Infosys Shares Nosedive by 16% After Whistleblowers Allege 'Unethical Practices', Crash Wipes Rs 53,452 Crore Off Investors' Wealth in a Day.

H-1B visas also require employers to pay workers at the local prevailing wage, an official statement said.

"Today's settlement shows that attempting to evade California law doesn't pay. Infosys brought in workers on the wrong visas in order to underpay them and avoid paying taxes. With this settlement, California has been made whole," Becca said.

In the settlement, Infosys, however, denied the allegations and asserted of no wrongdoings. In 2017, Infosys had agreed to pay the State of New York USD 1 million to settle allegations of submitting wrong documents to federal authorities.

The Californian settlement that was carried out in November was released to the media on Tuesday. California initiated legal actions against Infosys after a compliant was filed by whistleblower Jack "Jay" Palmer, a former Infosys employee. Palmer has sued the Indian company in 2017.

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)