Worker Says Employer Forced Him to Hand Over Tax Refund

An Indian employee of an information technology consulting company filed a lawsuit Tuesday alleging that he and other foreign workers were required to hand over their tax refunds to their employers.

Starting when he came to the United States from India in 2000, Gopi Vedachalam was ordered to sign over federal and state tax refunds totaling about $25,000 to his employer, Tata America International Corp., according to the suit filed in San Francisco federal court.

Vedachalam’s employer is an American subsidiary of Tata Consultancy Services, the Indian company that originally hired him in Bangalore, India, in 1997.

Company officials said they had not had an opportunity to review the complaint, so could not comment on the charges.

“We take this very seriously,” said Michael McCabe, a New York-based spokesman for Tata Consultancy Services.

If the judge says the case merits class-action status, it could include 5,000 foreign workers the company employs in the United States who may also have been allegedly required to give up their tax refunds, Vedachalam’s attorney Steven Tindall said.

It could take until the end of the year for a judge to make that decision, attorneys said.

Through the company, Vedachalam was hired as a project manager for well-known U.S. corporations such as Target Corp. and 21st Century Insurance Group.

Each year that Vedachalam worked for Tata America, he was asked to sign agreements allowing an outside agency to fill out his tax-return forms, he alleged in the suit.

Once he received a check from federal and state authorities, the company required him to endorse it and send it to Tata America, the suit said.

Vedachalam said that when he was new to this country, he thought that this was the correct procedure.

He was shocked to find out that it was not, he said.

“I felt humiliated about the way they treated us,” he said. “It’s not fair to do it that way.”

In 2004, for example, the company sent Vedachalam a memo that said, “We are now forwarding you the tax refund check received from the Tax Authority. Please sign on the reverse of the check and return it to the below mentioned address.”

The suit alleges that Vedachalam and other foreign employees were never repaid that money.

The lawsuit also highlights other complaints, including one regarding the company’s “use it or lose it” vacation policy for its California employees.

As many as five vacation days can be transferred to the following year. Employees have to use their remaining vacation days or forfeit them, Tindall said.

The lawsuit asks that the company compensate employees for money and vacation time lost, cover their legal fees and pay any punitive damages.