An Indian employee of Tata America International has filed Tuesday a lawsuit in an U.S. court, charging that Tata has unjustly enriched itself by requiring all of its employees in the U.S. who are not U.S. citizens to endorse and sign over their federal and state tax refund checks to Tata.
The employee's law firm, Lieff Cabraser Heimann & Bernstein, announced Tuesday that Gopi Vedachalam filed a nationwide class action lawsuit in U.S. District Court in San Francisco against Tata America International, and its parent corporations Tata Consultancy Services and Tata Sons.
Tata Consultancy Services (TCS) is India's largest software and services outsourcer. Indian outsourcers typically depute staff to the U.S. to work on client's sites.
A spokesman for TCS in Mumbai said that the company has as yet not received the papers relating to the case. "We have however been advised that we are compliant with all state and federal laws (in the U.S.)," he added.
The case constitutes one of the first class action lawsuits for violation of labor laws against a company engaged in "reverse outsourcing," bringing foreign citizens to the U.S. to work in U.S. corporations, the law firm said.
The complaint charges that most Tata employees in the U.S. are not U.S. citizens. These employees are granted visas, which allow them to work and live in the country. Tata requires each employee to sign an agreement which states that the employee's gross amount of compensation will be includable as earnings in the U.S. and reported to the U.S. Internal Revenue Service. The complaint alleges that these employees are not paid the amount promised them in these agreements.
The complaint further alleges that at least until July last year Tata required its employees that were not U.S. citizens to sign power of attorney agreements delegating an outside agency to calculate and submit each employee's tax return to state and federal authorities. Tata then required these employees who received tax refunds from state and federal tax authorities to endorse the tax refund checks and send them back to Tata, according to the complaint.
The complaint charges that Tata's conduct violates California Labor Code Section 221 which makes it unlawful "for any employer to collect or receive from an employee any part of wages theretofore paid by said employer to said employee."
From 2000 to 2003, plaintiff Gopi Vedachalam worked in Hayward, California, as a Tata project manager, according to information provided by the law firm. Since 2003, he has worked as a Tata project manager for a client in Woodland Hills, California. Vedachalam is asking the federal court to certify the case as a class action and issue an injunction against Tata, preventing it from requiring its employees to endorse their tax refund checks to the company to the extent it is still doing so. The complaint also seeks compensation and damages for current and former employees who were not paid what they were promised and who were deprived of their tax refunds.