Bribery

Larsen & Toubro Ltd (L&T) paid million in bribes to Indian government officials on behalf of Cognizant Technology Solutions Corp. to secure permits, ranging from environmental clearance to power. L&T has made illicit payments and Cognizant reimbursed the money by disguising it as compensation for cost overruns.^[140]

Companies Act violations

In March 2019, significant publicity was raised because Cognizant repetitively violated the directives of the Registrar of Companies. The Company "has moved [sic] the Madras High Court fearing possibility of criminal prosecution being launched against it by [the] Registrar of Companies for alleged violation of the provisions of the Companies Act of 2013 and the Companies (Appointment and Disqualification of Directors) Rules of 2014." One of those questions was as to why the company had not disclosed complete information on stock options of its parent holding company — CTS Corporation in the United States — having been given to the employees, including its directors, and the payments running to several hundred crores of rupees (approx US $40 million) having been paid to the parent company in the US towards stock compensating recharge.^[141]

Discrimination

In 2018, a race discrimination suit was brought: "Three former employees claim they were forced out of their jobs and replaced with 'less qualified' Indians after being poorly treated by their Indian supervisors and colleagues, given unjustifiably low performance ratings and denied promotions." Cognizant said it was "national origin" and not race.^[142]

Layoffs

200 senior executives, above the Director's Level were dismissed because they were not able to catch up with the latest technologies. The number of the executives that were dismissed is unusually high and questions the ability of the company to catch up with the latest technologies.^[143]

In 2017, eight employees filed petitions with the labor department, complaining Cognizant forced them to resign as part of a performance-based review. The labor department closed the case in favor of employees and advised company management to give one more opportunity for the petitioners to prove themselves. At the time Cognizant had also rolled out a ‘voluntary separation program’ for directors, associate vice-presidents and senior VP's which offed them 6–9 months of their salary.^[144]

In 2017, approximately 6000 Cognizant employees in Hyderabad/Bangalore/Chennai lost their job as a part of company's annual performance review process.^[145]

Tax evasion

The Income Tax department has frozen Cognizant Technology Solutions Corp's bank accounts and deposits in Chennai and Mumbai for allegedly evading a dividend distribution tax (DDT). A Cognizant spokesman confirmed the report and said in a statement that a court has instructed the tax department not to take further action pending further hearings. Cognizant failed to pay the tax of more than 25 billion rupees ($385 million) in the 2016–17 financial year, according to The Hindu, citing officials from the tax department.^[146]

The court asked the company to deposit 15 percent of the disputed tax, amounting to 4.9 billion rupees ($75 million) as security deposit till it decides on the case.^[147]

Working conditions

In February 2018 the UK and Irish press expressed concerns about contractors employed by Cognizant in Dublin as part of the outsourcing contract with Google about the conditions of employment in relationship to compensation and basic employment allowances like sick leave.^[148]

Corruption

In 2016, Cognizant announced that it was cooperating with US authorities in an investigation related to the Foreign Corrupt Practices Act, and carrying out its own probe to determine whether some payments made in India breached the law. The company also said President Gordon Coburn had resigned and would be replaced by Rajeev Mehta.^[149]

Crawford & Company lawsuit

Cognizant has been sued by Crawford & Company, the US-based independent providers of insurance claims-handling services, for alleged breach of contract. Cognizant had been mandated by Crawford to implement PeopleSoft Financials software as part of an ERP project called Project Atlas that it was critical to Crawford's operations. Project Atlas included components for both internal operations and client-facing services.^[150]

Wage theft and H-1B visa violations

Cognizant leads the ranks of companies receiving H-1B visas from the United States. The company has been steadily increasing its U.S. work force. In January 2011, the company announced plans to expand its U.S. delivery centers, including a new 1,000-person (0.4% of worldwide workforce) facility in Phoenix, Arizona.^[151] In February 2011, Cognizant said it had 60 full-time recruiters actively hiring in the U.S.^[152]

In 2009, an investigation by the US Department of Labor (DoL) found Cognizant in violation of the H-1B provisions of the Immigration and Nationality Administrative Act. The DoL discovered that the company had stolen wages and benefits from 67 of its workers, for which they demanded they repay $509,607 in back wages. Joseph Petrecca, the director of the Wage and Hour Division's Northern New Jersey District Office noted that the company took immediate steps to correct the violations, saying the "level of cooperation sets a standard for others in the industry."^[153]

In 2016, the company was the subject of a lawsuit by workers for Walt Disney World who said workers from India were brought into the United States on H-1B visas in order to replace them.^[154] However, in October 2016, federal Judge Gregory A. Presnel of the United States District Court in Orlando dismissed the lawsuits, stating "none of the allegedly false statements put at issue in the complaint are adequate."^[155]

Cognizant was also required to pay $5.7 million in back pay and fines in a U.S. District Court ruling for a class action lawsuit. The lawsuit claimed that Cognizant did not provide quality assurance analysts the full value of their overtime pay.^[156]

Working conditions and mental health issues

In February 2019, an investigative report by The Verge described poor working conditions in Cognizant's Phoenix, Arizona, office.^[157] Cognizant employees tasked with content moderation for Facebook developed mental health issues, including posttraumatic stress disorder, as a result of exposure to graphic violence, hate speech, and conspiracy theories in the videos they were instructed to evaluate.^[157][158] Moderators at the Phoenix office reported drug abuse, alcohol abuse, and sexual intercourse in the workplace, and feared retaliation from terminated workers who threatened to harm them.^[157][159] In response, a Cognizant representative stated the company would examine the issues in the report.^[157]

The Verge published a follow-up investigation of Cognizant's Tampa, Florida, office in June 2019.^[160][161] Employees in the Tampa location described working conditions that were worse than the conditions in the Phoenix office.^[160][162] Content moderator Keith Utley suffered a heart attack while working for Cognizant in March 2018 and died in a hospital; the Tampa office lacked an on-site defibrillator.^[160][163] Moderators were required to sign non-disclosure agreements with Cognizant to obtain the job, although three former workers broke the agreements to provide information to The Verge.^[160][164] In the Tampa office, workers reported bed bugs, unsanitary work conditions, inadequate mental health resources, sexual harassment, workplace violence, and theft.^[160][165] As a result of exposure to videos depicting graphic violence, animal abuse, and child sexual abuse, some employees developed psychological trauma and posttraumatic stress disorder.^[160][166] Cognizant sanitized the office before The Verge's visit, a practice the publication described as a "dog-and-pony-show phenomenon".^[160] In response to negative coverage related to its content moderation contracts, a Facebook director indicated that Facebook is in the process of developing a "global resiliency team" that would assist its contractors.^[160]

On October 30, 2019, Cognizant announced that it would phase out a portion of its content moderation contracts in 2020.^[167][168]