In a significant escalation of his administration’s immigration policies, President Trump signed an executive order on Friday imposing a substantial $100,000 fee on new H-1B visas for skilled foreign workers. This new requirement affects individuals such as software engineers seeking employment opportunities in the United States.
The H-1B visa program was originally created to assist American companies in filling specialized roles where a shortage of qualified domestic workers exists. However, it has been a long-standing target of immigration hard-liners and far-right groups, who contend that the program is exploited by businesses to substitute American employees with foreign labor. This contentious issue has even caused division among President Trump’s own base, and his position on the program has evolved throughout his time in office.
Before the new order was signed in the Oval Office on Friday, Secretary of Commerce Howard Lutnick articulated the administration’s justification for the new fee, labeling the H-1B as the ‘most abused visa’ program.
Lutnick explained the administration’s goal: ‘The entire premise is that large tech companies and other businesses will no longer be incentivized to train foreign workers.’ He added, ‘They will now be required to pay the government $100,000, in addition to the employee’s salary, rendering it economically unfeasible. The expectation is that if training is necessary, it should be provided to recent graduates from our nation’s excellent universities.’
This substantial fee is expected to encounter immediate legal challenges. It is scheduled to be implemented on September 21st and will exclusively apply to new H-1B visa applicants, as confirmed in a Saturday memo from U.S. Citizenship and Immigration Services.
Here’s a closer look at the key details:
What is the H-1B visa program?
The H-1B program was established by Congress in 1990 in response to anticipated labor shortages. Upon signing the legislation into law, then-President George Bush stated that its purpose was to ‘encourage the immigration of exceptionally talented people, such as scientists, engineers and educators.’
These visas, which are initially valid for three years and can be extended, have been utilized by employers to recruit foreign professionals with niche skills, primarily in the science and technology sectors. The intent is to fill roles where a scarcity of American workers with comparable qualifications exists.
To participate, employers must submit a petition to the government outlining the job description and the qualifications of the chosen foreign worker. While the H-1B program grants temporary work status in the United States, not permanent residency, many employers do eventually sponsor these visa holders for a green card, initiating their journey toward U.S. citizenship.
As of Saturday, considerable confusion persisted regarding the specifics of the new fee. Secretary Lutnick initially stated on Friday that the $100,000 would be an annual payment by the hiring American company. However, White House press secretary Karoline Leavitt later clarified via social media that it would be a one-time charge.
Who are the workers under the program?
Each year, Congress allocates 65,000 H-1B visas for individuals holding a bachelor’s degree or its equivalent, with an additional 20,000 reserved for those with a master’s degree or higher. Notably, universities and research institutions are not subject to these annual caps.
A significant portion of H-1B visa recipients are professionals in the technology sector, such as software engineers and computer programmers. Leading tech giants including Amazon, Google, Meta, Microsoft, Apple, and I.B.M. were among the top employers of H-1B visa holders last year, as reported by U.S. Citizenship and Immigration Services. Beyond technology, many H-1B workers also contribute to various other fields, including education, healthcare, and manufacturing.
While there isn’t a country-specific cap for these visas, a substantial majority—approximately two-thirds to three-quarters—of all H-1B recipients originate from India.
India’s Ministry of External Affairs highlighted the strong bilateral ties in a recent social media post, expressing apprehension that these sudden policy shifts could lead to severe ‘humanitarian consequences’ for families. Many H-1B visa holders relocate to the United States with their spouses and children, who often reside in the country for extended periods on dependent visas.
Why has the H-1B visa program been criticized by some Republicans?
According to an estimate from fwd.us, an immigration advocacy group, there are approximately 730,000 H-1B visa holders in the United States. This number represents a small segment of the over 163 million individuals employed as of September.
Opponents of the H-1B program assert that American companies frequently leverage these visas to recruit foreign workers who are prepared to accept lower wages compared to domestic candidates for identical roles. This criticism largely emanates from Republicans who align with President Trump’s stringent immigration policies.
Paradoxically, some of President Trump’s notable supporters include influential figures in the tech industry. This sector significantly depends on H-1B workers, as employers often claim difficulty in finding sufficient qualified American talent to fill these specialized positions.
The introduction of this new visa fee has ignited widespread confusion and disruption across various industries. However, its most significant impact is anticipated to be felt acutely within the technology sector of the economy.
Do H-1B holders replace American workers?
To secure an H-1B visa, employers are required to certify that they have first sought qualified domestic candidates and that hiring an H-1B worker will not negatively impact the wages or working conditions of American employees.
Despite regulations, there have been instances where the program was used to bring in foreign workers for positions previously held by Americans. For example, in 2015, approximately 250 technology employees at Walt Disney World in Orlando, Florida, were informed of their layoffs and subsequently tasked with training their H-1B visa-holding replacements, who were brought in by an Indian outsourcing firm. That same year saw similar situations unfold at Toys “R” Us and the New York Life Insurance Company.
While the program mandates that employers pay H-1B workers at least the prevailing wage for their role and location, or the average wage of American-born workers in similar positions, companies are explicitly forbidden from paying H-1B workers less than others with comparable skills. Nevertheless, a 2019 report by the Economic Policy Institute indicated that roughly 60 percent of H-1B positions offered salaries ‘well below’ the local median wage, attributing this discrepancy to the Labor Department’s ‘broad discretion’ in determining H-1B wage levels.