US President Donald Trump signed a proclamation on Friday that will impose a $100,000 annual fee for companies seeking to sponsor foreign workers through the H-1B visa system.
The H-1B visa is one of the most sought-after non-immigrant visas in the United States, allowing foreign workers to fill high-skilled roles in industries like technology, engineering, science, and mathematics. For years, this program has been a major avenue for skilled professionals, especially from India, to work in the US. However, recent changes to the H-1B visa process, including a new $100,000 annual fee, could significantly impact both foreign workers and companies seeking to hire them.
What is H-1B visa?
The H-1B visa allows US employers to sponsor foreign workers for positions that require specialized knowledge or technical skills.ย Applicants must hold at least a bachelorโs degree or its equivalent in the specific field they wish to work in. Over the years, the program has been a lifeline for companies, particularly in the tech industry, to fill skill gaps with highly qualified foreign talent.
However, some argue that it has been abused, with some companies using it to hire workers at lower wages compared to American employees
Trumpโs new executive order: A $100,000 annual feeย
In a move to reform the H-1B program, US President Donald Trump signed a proclamation on Friday imposing a new $100,000 fee on companies that sponsor foreign workers through the H-1B visa system. The new fee, which applies to both new applications and petitions supplementing existing ones, aims to ensure that the program prioritizes highly skilled workers rather than workers who could potentially be replaced by American employees.
White House staff secretary Will Scharf stated, โOne of the most abused visa systems is the H-1B non-immigrant visa program… This proclamation will ensure that the people they’re bringing in are actually highly skilled and not replaceable by American workers.โ
How will the new rule affect employers?ย
Under the new executive order, companies applying for an H-1B visa must pay the $100,000 fee annually. This is a stark increase compared to the previous administrative fees, which were around $1,500.
The Department of State or the Department of Homeland Security (DHS) will require employers to provide proof of payment during the visa processing. If the payment is missing, the application will be rejected. This change is expected to make it more difficult for companies, particularly tech giants, to hire foreign workers unless they are highly specialized and qualified.
Who will be the most affected by the H-1B visa changes?ย
The new fee is expected to significantly impact Indian workers, who make up the majority of H-1B visa holders. According to the U.S. Citizenship and Immigration Services (USCIS), Indian nationals accounted for 71% of all approved H-1B applications in recent years, with the second-largest group being Chinese workers. There are two primary groups of Indians who benefit from the H-1B program: IT professionals employed by major tech companies like Infosys and Tata Consultancy Services (TCS), and Indian students who graduate from U.S. universities with advanced degrees and seek to stay and work in the US.
In fact, about 65% of Indian H-1B visa holders work in computer-related fields, according to BBC’s 2023 report. The median salary for an H-1B holder is approximately $118,000 per year.ย
What does the Trump order mean for H-1B visa holders and employers?ย
For many companies, particularly in the tech sector, this new rule could alter their hiring practices. The $100,000 fee is a considerable financial burden, especially for smaller firms or startups. Larger corporations with deep pockets, however, may find ways to absorb the costs. Employers will now need to demonstrate that they are hiring workers with specialized skills and cannot easily find an equivalent American worker. The aim is to prevent companies from using the H-1B program as a cost-cutting mechanism by hiring foreign workers at lower wages.