Computech, which handles ERP implementations, application support and development, and remote database management, today has 400 to 500 employees in the U.S. and India, with more than 200 of those based in the U.S.

According to the settlement, the company can't hire H-1B workers for 18 months.

Kancharla, who denied the federal 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."

Some companies that have hired large numbers of H-1B visa holders have been accused by groups representing technology workers of being "body shops" that underpay foreign workers and help U.S. companies 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."