Infosys may face more immediate problems. In his letter, Grassley asked: "Will the departments cease to approve visas for Infosys until the lawsuit in Alabama is settled?"

Infosys was the last year, receiving about 3,800 visas.

The B-1 visa is intended for short-term uses such as meetings and conferences. Palmer's lawsuit contends that the company was using B-1 workers in full-time positions as a means to get around the need for an H-1B visa, which, unlike the B-1, includes prevailing wage and tax withholding requirements.

"If the allegations against Infosys are substantiated, American workers will have been hurt by this company's fraudulent actions, and the integrity of both the B-1 and H-1B visa programs will have been compromised," wrote Grassley.

Grassley is also challenging the State Department's internal rules that allow for a "B-1 in lieu of H-1B visas," and argues that the threshold for issuing a B-1 under this provision is too low. He said a "thorough review" of the provision is needed, "especially at a time when American workers are vying against foreign workers for employment in this country."