Washinton : The US Justice Department is likely to penalise Infosys with record immigration fine over misuse of business visas (B1) on Wednesday, according to a report by the Wall Street Journal. The B-1 visa is issued for short-term visits and restricts employees from engaging in gainful employment during their stay.

India’s second largest outsourcer has been under investigation in the US, its biggest market, for allegedly sending software engineers on visitor, rather than work, visas at big corporate clients across the US.

The US government is likely to fine Infosys about $35 million, the Wall Street Journal reported. The Bangalore-based company had earlier this month announced that it had made a provision of $35 million (Rs. 219 crore) for “visa related matters” based on discussions with US government agencies.

“As we are engaged with the US attorney’s office on a civil resolution of its government’s investigation into our compliance with Form I-9 and past use of B-1 visas, we have set aside a reserve of $35 million, including legal costs,” Infosys chief executive S D Shibulal said earlier this month.

The I-9 form is used by an employer to verify an employee’s identity and to establish that the worker is eligible to accept employment in the US. Every employee hired has to complete an I-9 form at the time of hire.

A district court in Texas had served a legal notice to Infosys on May 23, 2011 on the alleged misuse of B-1 visa rules by the company. In a regulatory filing in June 2011, the company admitted that any action by the US government against it in this regard would seriously affect its business in the North America market, which accounts for about 60 per cent of its export revenue.

In August 2012, a US court had dismissed harassment charges filed by a US employee, Jack Palmer, who had said he was retaliated against by the company after pointing out what he said was the misuse of U.S. B1 visas.

The dismissal of Mr Palmer’s lawsuit, however, had no bearing on the grand jury probe (by Texas court) against Infosys.

Infosys shares traded flat after earlier falling by as much as 0.6 per cent to a low of Rs. 3,304.65 on the NSE.