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On September 19, 2025, the Trump administration signed a presidential proclamation that imposed a $100,000 fee on new H-1B visa petitions.
The announcement triggered confusion among visa holders and employers. Major corporations issued urgent directives to H-1B employees traveling internationally, advising them to return to the U.S. before the Sunday morning deadline.
The administration framed the policy as necessary to protect American jobs and curb abuse of the visa program. Critics called it economic self-harm that would stifle innovation and drive jobs overseas.
What is the H-1B Visa Program?
The H-1B visa was created by the Immigration Act of 1990 to help U.S. employers address labor shortages in professional fields. It allows companies to temporarily hire foreign workers with specialized knowledge.
Specialty Occupations Defined
The H-1B covers “specialty occupations” that require specialized knowledge and at least a bachelor’s degree in a specific field. U.S. Citizenship and Immigration Services defines this as roles needing “theoretical and practical application of a body of highly specialized knowledge.”
While most associated with technology roles like software developers and data scientists, the program covers finance, engineering, architecture, healthcare, scientific research, and education. The sponsoring employer must prove the job meets these criteria and the employee has the required credentials.
The Lottery System
H-1B visas are employer-sponsored – individuals cannot apply on their own. The program has a strict annual cap of 65,000 visas, plus 20,000 additional visas for applicants with master’s degrees or higher from U.S. universities.
Demand vastly exceeds supply. In fiscal year 2025, the government received approximately 425,000 petitions for 85,000 available slots. This creates a random lottery where qualified applicants have roughly a one-in-five chance of selection.
Certain employers are exempt from the annual cap, primarily universities, affiliated non-profits, and governmental research organizations. This exemption has been critical for universities and research labs to attract global talent.
Current Cost Structure
Sponsoring an H-1B worker has always been expensive for employers. Federal regulations require the sponsoring company to bear nearly all costs, which consist of multiple government filing fees.
| Fee Name | Amount (US $) | Responsible Party |
|---|---|---|
| H1B Electronic Registration Fee | $215 | Employer |
| Form I-129 Filing Fee | $780 ($460 for smaller employers/nonprofits) | Employer |
| ACWIA Education and Training Fee | $1,500 ($750 for employers with ≤25 employees) | Employer |
| USCIS Anti-Fraud Fee | $500 | Employer |
| Public Law 114-113 Fee | $4,000 (for firms with >50 employees and >50% on H-1B/L-1 visas) | Employer |
| Asylum Program Fee | $600 ($300 for smaller employers) | Employer |
| Premium Processing Fee (Optional) | $2,805 | Employer or Employee |
| Visa Application (‘MRV’) Fee | $205 | Typically Employee |
The American Competitiveness and Workforce Improvement Act (ACWIA) fee specifically funds job training programs and scholarships for American workers in STEM fields. This system attempted to balance foreign talent access with domestic workforce investment.
The $100,000 Fee Proposal
The presidential proclamation established new conditions for H-1B worker entry into the United States under the Immigration and Nationality Act authority.
Core Requirements
The proclamation mandated:
- A $100,000 supplemental payment must accompany any new H-1B petition for foreign nationals outside the United States
- The restriction took effect at 12:01 a.m. Eastern Daylight Time on September 21, 2025
- The policy lasts for 12 months, with potential extension upon federal agency recommendation
The administration also directed the Department of Labor to revise and raise prevailing wage levels for H-1B workers. The Department of Homeland Security was instructed to prioritize “high-skilled, high-paid workers” in the lottery system.
Policy Rollout Confusion
The policy announcement was chaotic. Commerce Secretary Howard Lutnick initially implied the $100,000 fee would be annual and apply to both new petitions and renewals. This interpretation sparked immediate panic.
Major corporations including Microsoft, Google, Amazon, and JPMorgan Chase issued urgent directives to H-1B employees traveling internationally, advising immediate return to avoid being barred from re-entry.
Within 24 hours, the White House and USCIS issued clarifications that walked back the most severe interpretations:
- The $100,000 is a one-time fee per new petition, not annual
- The fee applies only to new petitions for individuals currently outside the United States
- The policy does not affect current H-1B visa holders or renewals
- It does not apply to individuals already in the U.S. filing for change of status to H-1B
The contradictory statements between senior cabinet officials and subsequent official clarifications suggest a policy potentially driven more by political messaging than careful implementation.
Arguments Supporting the Fee
The administration and supporters advance several interconnected arguments centered on protecting American workers and reforming what they view as a flawed program.
Curbing Abuse and Outsourcing
The central justification claims the H-1B program has been “deliberately exploited” and “prominently manipulated,” particularly by IT and outsourcing firms. The White House proclamation states these companies use the visa to replace American workers with cheaper foreign labor.
The document cites that IT workers’ share in the H-1B program grew from 32% in fiscal year 2003 to over 65% recently. A study cited shows a 36% discount for H-1B “entry-level” positions compared to full-time traditional workers.
The proclamation alleges companies lay off thousands of American workers while simultaneously receiving thousands of H-1B visa approvals, sometimes forcing dismissed American employees to train their foreign replacements. The fee is presented as a powerful disincentive to this “replace and outsource” model.
Raising Wages and Prioritizing Americans
Making foreign labor more expensive, proponents argue, will compel companies to invest in the domestic workforce. Commerce Secretary Howard Lutnick stated the fee would make it “just not economic anymore” for companies to use H-1B visas for trainees or entry-level positions.
“If you’re going to train people, you’re going to train Americans. Stop bringing in people to take our jobs,” Lutnick argued.
This reasoning assumes the H-1B program has flooded the entry-level job market, particularly in tech, with cheaper foreign labor. This allegedly makes it harder for recent American college graduates to find jobs and suppresses wage growth.
A White House spokesperson framed the policy as “commonsense action” that “discourages companies from spamming the system and driving down wages.” The dramatic cost increase aims to force a market correction benefiting domestic workers.
Ensuring Elite Talent Only
Another key rationale suggests the $100,000 fee will serve as a market-based filter ensuring the H-1B program attracts truly exceptional talent, not just competent workers who are cheaper to hire.
Lutnick said the fee forces a crucial business decision: “is the person valuable enough to have a $100,000-a-year payment to the government, or they should head home, and they should go hire an American.”
Ron Hira, an associate professor at Howard University who has researched the H-1B program for decades, suggested the fee could improve a system where employers often hire workers with “ordinary skills” because “they’re cheaper and they’re indentured to their employer.”
A company willing to pay the $100,000 fee provides clear evidence the worker possesses “super-specialized” skills unavailable in the domestic labor market.
Generating Federal Revenue
The administration presents a fiscal argument for the policy. President Trump stated revenue from the new fee would reduce taxes and the national debt, framing it as a direct financial benefit to Americans.
Commerce Secretary Lutnick projected the fee, along with a proposed “Gold Card” visa program for wealthy investors, could raise over $100 billion for the U.S. Treasury.
Arguments Against the Fee
Opponents – including business groups, economists, immigration lawyers, university leaders, and technology executives – argue the policy is misguided and legally dubious, threatening severe economic damage and innovative capacity.
Economic Harm and Innovation Loss
The central economic argument warns the fee will trigger “brain drain,” actively deterring the world’s most talented individuals from bringing skills to the United States.
Atakan Bakiskan, an economist at investment bank Berenberg, labeled the move “anti-growth policymaking,” warning “the brain drain will weigh heavily on productivity” and “investments in artificial intelligence are unlikely to offset the damage caused by the loss of human capital.”
Critics argue high-skilled immigrants are not economic drains but powerful growth engines. Economic models from institutions like the Wharton School and organizations like the Bipartisan Policy Center consistently show increasing high-skilled immigration boosts GDP, raises average wages, and spurs innovation.
Venture capitalist Deedy Das articulated tech community fears: “If the US ceases to attract the best talent, it drastically reduces its ability to innovate and grow the economy.”
Job Offshoring Risk
A critical flaw in the policy’s logic, opponents argue, is assuming companies unable to hire H-1B workers will automatically hire Americans instead. Many argue companies will simply move jobs or entire projects overseas.
David Bier, an immigration expert at the Cato Institute, pointed to President Trump’s 2020 H-1B program suspension, which research showed led to increased job offshoring – the opposite of the policy’s stated intent.
Business leaders in India predict the fee will accelerate U.S. firms shifting work to offshore Global Capability Centres. The ultimate effect, critics warn, is the policy will not protect American jobs but export them, resulting in net U.S. economic loss.
Legal Authority Questions
The proclamation faces immediate and significant legal challenges. Immigration law experts argue the President lacks unilateral authority to impose such a fee. Congressional power sets visa fee structures, and the executive branch is generally limited to charging fees that recover administrative processing costs.
Aaron Reichlin-Melnick of the American Immigration Council stated bluntly, “the president has literally zero legal authority to impose a $100,000 fee on visas. None. Zip. Zilch.”
Immigration attorneys describe the move as “executive taxation without Congress approval” and widely expect courts to enjoin it. This legal uncertainty adds another business risk layer, as companies may hesitate making long-term plans based on potentially invalid policy.
Pay-to-Play System Creation
Critics argue the fee fundamentally transforms the H-1B visa from a merit-based system into an “elitist ‘pay-to-play’ system” accessible only to wealthy corporations.
While large tech companies might absorb the cost for critical hires, the fee would devastate startups, small and medium-sized businesses, non-profits, universities, and rural hospitals that rely on H-1B talent but operate on tight budgets.
This would effectively shut these entities out of the global talent market, stifling competition and concentrating foreign expert hiring ability among a few corporate giants. Rather than leveling the playing field for American workers, critics say it would heavily favor the largest incumbents, potentially harming U.S. economic dynamism.
Financial Impact Analysis
The proposed $100,000 fee carries concrete and substantial financial implications across wide U.S. economy sectors. Financial analysts and industry experts have begun quantifying potential damage and outlining strategic shifts companies will be forced to make.
Corporate Bottom Line Impact
The most immediate and severe impact will hit the heaviest H-1B program users, particularly Indian IT services firms and U.S. technology giants. Indian IT companies, which derive up to 85% of revenue from the U.S. market, could face severe financial blows.
Analysts project the fee could reduce their core operating profits (EBITDA) by 7-15% and, based on past visa sponsorship levels, add $150 million to $550 million in annual immigration costs for each leading firm.
The underlying math is stark. With median H-1B salaries for these firms ranging from $80,000 to $120,000, the one-time $100,000 fee can approach or exceed an employee’s entire first-year compensation. This makes the business case for sponsoring an onshore H-1B worker economically unviable for many roles.
While the full impact won’t be felt until the fiscal year 2027 lottery cycle, the policy announcement has already introduced significant uncertainty into ongoing contract negotiations and new project pipelines.
Key Industry Effects
While administration rhetoric often focuses on IT outsourcing firms, examination of top H-1B sponsors reveals the program is deeply embedded in core American economy sectors. The heaviest users are not just foreign consulting companies but iconic U.S. technology firms, major financial institutions, and leading professional services firms.
| Rank | Company Name | Industry | Approved H-1B Visas (FY2025) |
|---|---|---|---|
| 1 | Amazon | Technology/Retail | 10,044 |
| 2 | Tata Consultancy Services | IT Services/Consulting | 5,505 |
| 3 | Microsoft | Technology | 5,189 |
| 4 | Meta Platforms | Technology | 5,123 |
| 5 | Apple | Technology | 4,202 |
| 6 | Technology | 4,181 | |
| 7 | JPMorgan Chase | Financial Services | 2,440 |
| 8 | Deloitte | Professional Services | 2,353 |
| 9 | Infosys | IT Services/Consulting | 2,004 |
| 10 | Cisco Systems | Technology | 1,570 |
| 11 | Wipro | IT Services/Consulting | 1,523 |
| 12 | General Motors | Manufacturing | 574 |
| 13 | Visa Technology | Financial Services | 466 |
| 14 | EY | Professional Services | 2,697 |
| 15 | PricewaterhouseCoopers | Professional Services | 1,217 |
This data provides a counter-narrative to claims the program is primarily used by a handful of outsourcing companies to undercut American labor. Instead, it shows the policy will directly impact talent acquisition strategies of companies driving U.S. innovation and economic growth.
Business Strategy Shifts
Faced with this new cost structure, companies are expected to make significant strategic adjustments to mitigate impact. Analysts predict a multi-pronged response including:
Accelerated Offshoring: Moving more work, particularly software development and IT support, to delivery centers in India and other low-cost locations.
Expanded Near-shoring: Shifting roles to countries in similar time zones, such as Canada and Mexico, to facilitate collaboration while avoiding high U.S. visa fees.
Increased Local Subcontracting: Relying more heavily on U.S.-based contractors and consulting firms, which could lead to wage inflation in the domestic tech sector as demand increases for limited local talent pools.
Cost Pass-through to Clients: IT service providers and consultants will likely build higher visa costs into contracts, meaning American corporate clients will bear the ultimate financial burden.
Universities and Research at Risk
Perhaps no sector is more uniquely vulnerable to the proposed fee than American higher education and scientific research. While these institutions are exempt from the annual H-1B cap, they are not exempt from fees, creating potential crisis for the nation’s innovation engine.
America’s Research Dependency
U.S. universities and research labs are profoundly dependent on global talent. National Science Foundation data reveals nearly 40% of all science and engineering graduate students, over 57% of postdoctoral researchers, and more than 40% of all PhD-level science and engineering workers in the United States are foreign-born.
For decades, universities have used the cap-exempt H-1B visa to attract the world’s best researchers at modest academic salaries. This regulatory advantage has been key to establishing American universities as global leaders.
The $100,000 fee threatens to shatter this model. Many public and private universities, already facing budget constraints, simply cannot afford such sums for each international researcher or faculty member they wish to hire.
Harvard University, for example, sponsored an average of 125 new H-1B petitions per year between 2017 and 2024. Under the new rule, this would represent an annual cost exceeding $12.5 million.
The consequences could be devastating. Universities may be forced to lay off essential teaching and research staff, abandon research projects, and eliminate entire STEM degree programs, particularly at regional public universities.
The impact would also hit healthcare hard, as many teaching hospitals and clinics in underserved rural areas rely on international medical graduates on H-1B visas to fill critical residency slots and provide patient care.
Long-term Innovation Impact
This dynamic reveals a potentially self-defeating policy consequence. Foundational scientific research conducted in university labs is the wellspring of innovation that ultimately fuels private sector growth, including the major tech companies shown in the data above.
By making it financially impossible for universities to attract the best global talent, the policy could choke off this pipeline at its source. In five to ten years, the very companies the policy ostensibly aims to help could face a domestic talent pool that is smaller and less exposed to cutting-edge global research, undermining long-term American competitiveness.
International Student Pipeline Threat
The policy also directly threatens the international student pipeline. The H-1B visa is the primary pathway for international students, particularly those with advanced STEM degrees, to remain in the country after graduation and contribute their skills to the U.S. economy.
If employers are no longer willing or able to sponsor them due to prohibitive cost, the incentive for top students worldwide to invest hundreds of thousands of dollars in U.S. education will be significantly diminished.
Education consultants report students are already beginning to look at alternative destinations like Canada, Australia, and Europe. This could trigger a long-term “reverse brain drain,” where top talent that once fueled U.S. innovation instead drives competitor economies.
National Interest Exemption Uncertainty
The proclamation includes a provision allowing the Secretary of Homeland Security to waive the $100,000 fee if hiring a particular worker is deemed in the “national interest.” This could theoretically provide a lifeline for universities and research institutions hiring for critical roles, such as leading semiconductor physics experts or pandemic vaccine researchers.
However, the proclamation provides no clear criteria for what constitutes “national interest,” creating an uncertain environment. This lack of clarity makes it difficult for institutions to engage in long-term planning and recruitment necessary for major research projects, as they cannot determine if potential hires will qualify for exemptions.
Global Competition Context
The H-1B fee debate occurs during intense global competition for limited high-skilled talent pools. The U.S. policy shift represents significant divergence from other developed nations’ approaches, potentially altering global migration patterns.
Indian Government Response
The country most directly affected is India, which accounts for over 70% of all H-1B visa holders. Reaction from the Indian government and industry was swift and critical.
Nasscom, India’s IT trade body, warned of “ripple effects on America’s innovation ecosystem.” The Indian government raised concerns about “humanitarian consequences” for families that could be disrupted.
Some Indian voices, however, frame the policy as a potential long-term benefit for their own country. They argue the U.S. is scoring a “self-goal” that will force a generation of talented Indian engineers and scientists to remain home or return from the U.S., fueling domestic innovation and turbocharging India’s tech industry.
International Comparison
The proposed U.S. fee makes its high-skilled immigration system a global outlier. Most primary competitors for talent, such as Canada, the United Kingdom, and Australia, have moved toward points-based systems designed to attract individuals based on human capital – age, education, skills, and language ability – rather than employer willingness to pay exorbitant fees.
Canada: Uses the Express Entry system, which ranks candidates based on a Comprehensive Ranking System (CRS) score. Individuals do not need job offers to enter the pool. Total government processing fees for individual permanent residence are typically around $2,300 CAD (approximately $1,700 USD).
United Kingdom: The Skilled Worker visa requires employer sponsors and involves application fees ranging from £769 to £1,751 (approximately $950 to $2,150 USD), plus annual healthcare surcharges of £1,035 (approximately $1,275 USD).
Australia: The points-tested Skilled Independent visa (subclass 189) allows individuals to apply for permanent residency without employer sponsors. Base application charges start from AUD 4,910 (approximately $3,200 USD).
This comparison highlights profound strategic divergence. While competitor nations refine meritocratic systems to attract talent directly, the $100,000 fee risks making the U.S. system appear primarily wealth-based and entirely dependent on employer whims.
A top AI researcher might qualify for Canadian permanent residency based on their own credentials for a few thousand dollars. To come to the U.S., they would depend on a company’s willingness to pay a six-figure sum.
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