Infosys onboarding delays: Centre asks Karnataka to take appropriate action

The Union Labour Ministry instructed the Karnataka State Labour Commissioner's Office to address the situation and ensure compliance with relevant labour regulations

The Union Ministry of Labour and Employment has urged the Karnataka government to take “appropriate action” following concerns raised over delays in onboarding fresh graduates at Infosys, a major player in the IT sector, according to a report by Moneycontrol.

The ministry instructed the Karnataka State Labour Commissioner’s Office to address the situation and ensure compliance with relevant labour regulations.

A letter from the ministry dated September 3 highlighted that intervention had been sought to safeguard these graduates from potentially exploitative corporate practices. The letter added that since the Karnataka government holds authority under applicable labour laws, the state was asked to investigate the issue and take necessary steps, keeping both the applicant and the ministry informed, Moneycontrol cited the letter as saying.

 

Business Standard could not independently verify the details of the report.

This move by the central government gains significance amid reports that Infosys has postponed the onboarding of 2,000 engineering graduates from the 2022 cohort.

Last week, Infosys CEO Salil Parekh assured that all offers extended to freshers would be honoured, though there had been changes to the original timelines.

"Every offer that we have given, that offer will be (for) someone who will join the company. We changed some dates but beyond that everyone will join Infosys and there is no change in that approach," Parekh told PTI.

As of June 2024, the Bengaluru-based IT giant employed 315,000 people.

The Nascent Information Technology Employees Senate (NITES), a union representing IT and ITES workers, recently filed a complaint with the Ministry of Labour and Employment against Infosys over the delayed onboarding of 2,000 engineering graduates. These graduates were selected for system engineer and digital specialist engineer roles during the recruitment drive for 2022-23.

Infosys begins onboarding

Earlier this week, reports surfaced that some of the graduates awaiting onboarding had started receiving confirmation emails from Infosys on Monday. Their joining date has been set for October 7.

In a message to some graduates, Infosys’ talent acquisition team reportedly wrote, “Your scheduled date of joining the company will be October 7, 2024. Your location for employment is Mysore, India.”

Since April 2022, these engineering graduates—numbering around 2,000—have faced onboarding delays despite receiving offers for system engineer (SE) and digital SE roles. Their salary packages range between Rs 3.2 lakh and Rs 3.7 lakh annually.

Infosys’ mounting troubles

In a separate development, Infosys has been hit with a tax demand exceeding Rs 32,000 crore ($4 billion) by Indian authorities. The demand pertains to services the company received from its overseas branches between July 2017 and the 2021-22 financial year. This amount is equivalent to 85 per cent of its revenue for the quarter ending June 30.

Infosys has maintained that it has paid all its legally required dues, with investors also expressing confidence that the company need not provision for this liability. Earlier reports from Reuters suggested that while the tax notice was issued based on current regulations, the Union Finance Ministry now believes it contradicts India’s broader policy of exempting services exports from taxation.