The Trump administration has unveiled a significant new immigration rule poised to escalate the cost of employing H-1B visa holders and other employment-based immigrants in the United States. This proposed plan, part of a presidential proclamation, includes a hefty $100,000 fee for many H-1B applicants. Additionally, the Department of Labor (DOL) is anticipated to release new wage guidelines, effectively raising the minimum salaries U.S. employers must offer foreign workers—a move reminiscent of policies from the former administration’s first term.
H-1B visas serve as a vital entry point for highly skilled international professionals, particularly for graduates emerging from U.S. universities. Data indicates that international students comprise a substantial 73% of full-time graduate students in crucial fields like electrical and computer engineering. Despite this demand, the program operates with an annual cap of 65,000 visas, plus an extra 20,000 for those holding U.S. master’s degrees or higher, meaning only a limited segment of the global talent pool can access it. Employers who hire these workers already face government fees surpassing $6,000 and are required to pay the higher of either the actual wage or the prevailing wage for similar U.S. workers.
Understanding the New Rule’s Impact on H-1B and EB-3 Costs
The presidential proclamation explicitly states that the proposed $100,000 fee would be an insurmountable barrier for companies looking to hire new H-1B visa holders. However, U.S. Citizenship and Immigration Services (USCIS) has clarified that this particular fee would not apply to individuals already within the U.S. who are transitioning between visa categories, such as those moving from an F-1 student visa to an H-1B. Nevertheless, the rule is set to impact both existing H-1B visa holders and those applying for employment-based green cards, including EB-3 workers.
This isn’t the first time the Trump administration has pursued such reforms. Previous Department of Labor (DOL) rules, enacted on October 8, 2020, and January 14, 2021, also aimed to increase minimum salary requirements for foreign workers. However, these attempts were ultimately struck down by courts for failing to comply with the Administrative Procedure Act. It is anticipated that the current rule will operate within a similar structure, likely inflating prevailing wages to figures that many employers will struggle to afford.
Significant Prevailing Wage Hikes Under the Proposed Rule
The new Department of Labor framework is set to redefine the “prevailing wage” – the minimum salary an employer is legally required to pay a foreign national. This change would lead to substantial salary increases for entry-level (Level I) positions, with some roles potentially demanding annual salaries as high as $208,000. For instance, software developers in major tech hubs like San Jose and San Francisco could see their required wages surge by 62% above current market rates. Similarly, financial analysts in New York might need to earn more than three times the prevailing private market wage.
Vic Goel, a representative from Goel & Anderson, explained to Forbes that “The Department of Labor’s OEWS wage levels are designed to account for experience, supervision, and responsibility, where Level I signifies entry-level, and Level IV indicates greater independence and judgment.” He further clarified that this updated formula effectively elevates even entry-level salaries to what was previously considered Level II compensation, with corresponding increases across all higher levels.
Far-Reaching Consequences for Employers and Skilled Foreign Workers
According to analyses from the National Foundation for American Policy (NFAP), the initial DOL wage rule would have boosted Level I salaries by an estimated 39% to 45%. Such an increase would make it prohibitively expensive for employers to hire H-1B visa holders or sponsor other highly skilled immigrants. This could impact thousands of job roles across various sectors, including technology and healthcare. Forbes, citing NFAP’s findings, concluded that the rule “would likely lead employers to hire individuals outside the US or not at all.”
Many economists have criticized the rationale behind these new regulations, pointing out that H-1B visa holders often receive equal or even higher compensation compared to similarly qualified U.S.-born professionals. Madeline Zavodny, a professor at the University of North Florida, noted in an interview with Forbes, “Empirical evidence indicates that workers who hold an H-1B visa are typically paid at least as much as similarly employed US-born workers.”
The Trump administration’s latest regulations aim to concurrently revise both visa fees and wage stipulations, with the potential to profoundly alter the landscape of cost and accessibility for high-skilled international talent within the U.S.