This fall, President Trump took aim at the H-1B visa, in a move that has been telegraphed for years amid criticism that the program diverts jobs away from American workers. In September, Trump announced that new applications for the work visa would now be subject to a $100,000 fee—a bold attempt to curtail excessive use of the H-1B program.
The H-1B program, which was established through the Immigration Act of 1990, has been widely embraced by tech employers to enable hiring skilled talent from abroad, with companies like Amazon and Meta sponsoring thousands of H-1B workers every year. While H-1B workers hail from dozens of countries, an outsized portion of them—about 80%—are hired from India and China. But the program has also repeatedly come under fire due to claims that it outsources jobs and undercuts wages by paying foreign workers below market rate.
Trump’s proclamation has sparked confusion as employers have scrambled to figure out how the fee would reshape their hiring and recruitment plans—and which workers would be subject to it. For the big tech companies that are among the most avid users of the H-1B visa, a $100,000 fee is not a huge price to pay.
But lawyers say many companies that use the visa more sparingly are now unable to shoulder the steep cost of hiring H-1B workers.
“What we’re seeing is the $100,000 fee is not just impacting small employers who are like, ‘we can’t pay that,’” says immigration lawyer Sandra Feist, who works with many people who are seeking an H-1B visa. “No employer that I have spoken with—and that includes very large organizations and large universities—has said it’s worth it. This impact is being felt across all sizes of companies and institutions.” In fact, the U.S. Chamber of Commerce, a major business lobbying group, has filed a lawsuit challenging the fee, deeming it “unlawful” and “cost-prohibitive” for employers seeking to hire H-1B workers.
Feist says several companies she works with that typically enter the H-1B lottery on an annual basis are reevaluating their hiring strategy and planning to sit it out next year. In many cases, the muddled rollout of the fee and the lack of clarity on exceptions has created a chilling effect that is discouraging employers from sponsoring foreign workers altogether, even if they already have a visa.
“There are a lot of instances where this fee does apply and is prohibitive, but there are also many circumstances where this fee would not apply based on the current guidance that we’ve received,” Feist says. “But employers are so fearful of the uncertainty and volatility around immigration.”
How the fee is impacting employers
The same logic has influenced how early and mid-stage startups are approaching hiring at the moment, according to Sophie Alcorn, an immigration lawyer who works with tech startups and founders. A significant portion of H-1B visas are held by people who came to the U.S. as students and simply changed their immigration status.
But many founders are now hesitant to hire foreign nationals, even if they have already obtained a work visa or are currently authorized to work in the U.S.
“A lot of small businesses just don’t have the resources or information to understand that if those people are maintaining valid status in the U.S., then the $100,000 fee would not apply to them,” Alcorn says, citing the example of speaking with a recent graduate who had three job offers revoked when their immigration status was disclosed. (This person was authorized to work without restriction for the year ahead.)
H-1B workers can often play a significant role at small companies and startups, where they might be the sole person hired with their particular skillset, Alcorn says.
Due to the visa fee, however, Alcorn has found that startups are steering clear of those workers and opting instead to hire people who have secured the O-1 visa. (That visa does not have to be tied to the employer, and is awarded to people who possess “extraordinary ability” in their field. It can offer more flexibility and job mobility than the H-1B, particularly in fields that rely on freelance or contract work.) But this can deny opportunities to workers who don’t have the qualifications they might need to secure an O-1. “A lot of the really brilliant, talented engineers are not famous and don’t have a public profile,” she adds. “Many of them are not PhD researchers. They’re often very scrappy individuals with a lot of work experience.”
The $100,000 fee is supposed to only apply to new applications—but existing H-1B workers are feeling the effects of it all the same. While H-1B workers can transfer their visa status if they find a new job, the restrictions of the visa can leave people in a precarious limbo if they get laid off. H-1B workers who lose their jobs are granted a 60-day grace period to find new employment and retain their visa status. In this job market, however, it’s no small feat for workers to land a new role within that timeframe.
Sharadha Kodem, an immigration lawyer who represents many H-1B workers, says that with the $100,000 fee in place, employers may be forced to pay up if they want to hire an H-1B worker but are unable to do so within 60 days. If a worker has to leave the country in the interim, their new employer risks being saddled with the $100,000 fee when they return with a new visa, Kodem says.
What this means for foreign workers
For aspiring H-1B workers—be it students or refugees with temporary status protecting them from deportation—the fee has thrown a wrench in their future plans.
The Trump administration has claimed that the $100,000 fee will not be levied on current H-1B workers or recent graduates who are seeking to change their status and switch to an H-1B visa. But their guidance also notes that the fee will be imposed if a worker is “deemed ineligible for a change of status or extension.” This vague language gives the administration “broad discretion” to determine who is eligible for a change of status, Feist says—and whether they will be slapped with a $100,000 bill. A recent Washington Post report found that foreign workers are already facing greater scrutiny—and denials—when they apply for work visas, including the H-1B.
It’s not just tech workers or H-1B visa aspirants from India and China who are impacted by stringent policies like this one. “I’m working with a costume designer from Ukraine, and our plan was to file in the lottery this spring,” Feist says. “I’ll have to revisit that in light of the $100,000 fee.” Feist is working with several people from Ukraine who have temporary protected status, for whom securing an H-1B would have been their best chance at staying in the U.S. If the administration has the final say on whether the fee should be waived, they could arbitrarily foist it on applicants from certain countries, Feist says.
“The general hope is that, as the administration sees what a chilling effect this has on employers who are seeking essential workers that they can’t find in the U.S. workforce, that they will slowly narrow the scope of the fee and perhaps provide more clear guidance,” she adds. “Our hope is that the administration sees the light.”
Why this does not address H-1B abuses
The Trump administration has framed this fee as a ploy to discourage companies from abusing the H-1B program or using it to source cheaper labor. In practice, however, the fee seems to be making it more difficult for companies to use the program the way it was originally conceived: to recruit highly skilled talent that they can’t find stateside.
Meanwhile, for the leading tech companies that routinely file thousands of H-1B petitions to sponsor workers from abroad, $100,000 amounts to the equivalent of a paltry rounding error—and hardly qualifies as an obstacle. Those companies will likely face less competition for H-1B approvals, as the fee deters many employers from applying at all.
“This is benefiting the exact employers that [the administration says] they are targeting,” Feist says. “It is only very large companies that over rely upon H-1B and sponsor tens of thousands of them each year that will benefit from this. And normal employers who are hiring an ophthalmologist or a teacher or a therapist or an architect—they will be disadvantaged.”
The debate over the H-1B program dates back decades, with people on both sides of the aisle calling for reform long before President Trump assumed office.
One of the key critiques of the program has been that deep-pocketed companies can effectively game the lottery by flooding it with applications—and that certain companies use the H-1B visa to undercut wages. The H-1B program has wage requirements but offers four different wage levels, and some research indicates that many workers are being paid at the lowest wage levels, which are supposed to be reserved for entry-level jobs. (Other research has found that employers are by and large paying market rate.) The backlog of green card applications also leaves many H-1B workers without a legitimate path to citizenship, forcing them to spend decades in the U.S. on a visa that is tied to their employment.
Daniel Costa, the director of immigration law and policy research at the Economic Policy Institute, says that employers who pay lower wages to H-1B workers—which typically includes outsourcing and staffing firms like Infosys, Cognizant, and Tata—still benefit from the program, even if they are now saddled with the $100,000 fee.
“They’re multi-billion dollar companies, and they get a lot of wage savings from using the program,” he says. “So [the fee] is not very well-targeted, and it could have unintended effects. And it just doesn’t get at the heart of what’s wrong with the H-1B program.”
What could actually reform the H-1B program
The new fee fails to reform the H-1B program in a meaningful way, and it seems even Trump is of two minds about the role of this visa. Even as Trump has cracked down on legal immigration, he has touted the value of H-1B. In a Fox News interview last month—not long after he introduced the $100,000 fee—Trump said the U.S. workforce lacked “certain talents” and needed the H-1B visa to bring over highly skilled workers. “You can’t take people off an unemployment line and say, ‘I’m going to put you into a factory and we’re going to make missiles,’” he added.
There are changes to the H-1B program that could move the needle, though it’s not clear whether those efforts will actually target the companies that lean heavily on the H-1B visa.
The Trump administration is putting forth proposals that would likely amend the lottery system and prioritize applications for H-1B petitions that are at a higher wage level—in other words, give more weight to jobs that pay better. In theory, this could help prevent tech companies and outsourcing firms from exploiting the lottery system, while also ensuring H-1B workers are paid fairly.
But some lawyers argue that it would simply reinforce the advantage held by tech firms, who can afford to pay higher wages, and make it more difficult for other applicants to land an H-1B visa if overall wages are depressed in their sector. The Labor Department has also stepped up enforcement of the H-1B program through an initiative called Project Firewall, which is intended to investigate potential abuses of the H-1B visa, including but not limited to wage theft.
Still, as Costa points out, the threat of enforcement may not be a deterrent for billion-dollar employers that have come to rely on the H-1B visa.
“Companies get disbarred from the program very, very rarely,” he says. “If the penalty is mostly just recovering back wages, then you’re just paying what you owed that worker anyway.”