Computech today has about 400 to 500 employees, according to its president, Ram Kancharla. He said the company is less dependent on H-1B workers today, but in 1998, there was a shortage of workers with the technology skills in Java- and Web-related work. Kancharla would not disclose the number of H-1B workers the company now uses but said most of the employees involved in the settlement have since left.

The firm, which handles ERP implementations, application support and development, and remote database management, does its work in India and the U.S. and has more than 200 employees based in the U.S.

Kancharla, who refutes the DOL allegations, said the company decided to settle after looking "at the cost of litigation and how long it's going to take and the kind of distraction to the business."

Companies that hire large numbers of H-1B visa holders have been accused in the past of being "body shops" that underpay foreign workers and help U.S. firms move work overseas.

"The Department of Labor aggressively enforces the law to ensure that temporary foreign workers are compensated fully and fairly," Secretary of Labor Elaine L. Chao said in a statement. "Abuse of the temporary foreign worker program is not tolerated and violators, as this case shows, are vigorously pursued."