President Trump further intensified his administration’s immigration policies on Friday, announcing a substantial change to the H-1B visa program for skilled foreign workers. He signed an executive order introducing a new $100,000 fee for individuals applying for these visas, which enable professionals such as software engineers to work in the United States.
While the H-1B visa program was originally created to help U.S. companies recruit foreign talent for specialized roles where American workers are scarce, it has faced long-standing criticism. Immigration hard-liners and far-right groups contend that the visa is exploited by companies to substitute American employees with foreign workers. This contentious issue has even caused division among former President Trump’s supporters, and his own views on the program have evolved over time.
Before the executive order was officially signed in the Oval Office on Friday, Secretary of Commerce Howard Lutnick articulated the administration’s justification for imposing this new fee, labeling the H-1B as the ‘most abused visa’ program.
According to Lutnick, the core objective is to deter large tech and other companies from relying on and training foreign workers. He stated, ‘They have to pay the government $100,000, then they have to pay the employee — so it’s just not economic. If you’re going to train somebody, you’re going to train one of the recent graduates from one of the great universities across our land.’ This suggests a focus on prioritizing domestic talent development.
This new fee is expected to encounter significant legal challenges. The U.S. Citizenship and Immigration Services (USCIS) confirmed in a Saturday memo that the policy will take effect on September 21 and will apply exclusively to new H-1B visa applications.
To help clarify, here’s a breakdown of what this means:
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, then-President George Bush highlighted its purpose 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 primarily been utilized by employers to bring in foreign professionals with specialized expertise, particularly in science and technology sectors, to fill roles where a sufficient number of qualified American workers are unavailable.
To secure an H-1B visa, employers must submit a formal petition to the government, detailing the job description and the foreign worker’s qualifications. It’s important to note that the H-1B program grants temporary work authorization, not permanent residency. Nevertheless, many employers ultimately sponsor H-1B visa holders for green cards, offering a pathway to U.S. citizenship.
Following the announcement, significant confusion arose regarding the fee’s implementation. Secretary Lutnick initially stated on Friday that the $100,000 charge 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 fee.
Who are the workers under the program?
Annually, 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 caps.
The majority of H-1B visa recipients are found in the technology sector, including roles such as software engineers and computer programmers. Leading tech companies like Amazon, Google, Meta, Microsoft, Apple, and IBM were among the top employers of H-1B visa holders last year, as reported by USCIS. However, the program also supports workers in diverse fields, including education, healthcare, and manufacturing.
Interestingly, there isn’t a country-specific cap for H-1B visas, which has led to a significant concentration: between two-thirds and three-quarters of all recipients originate from India.
Why has the H-1B visa program been criticized by some Republicans?
An estimated 730,000 H-1B visa holders currently reside in the United States, according to fwd.us, an immigration advocacy organization. This figure represents a minor portion of the overall U.S. workforce, which totaled over 163 million people as of September.
A common criticism of the visa program is that U.S. employers frequently leverage H-1B visas to hire foreign workers who are perceived as being willing to accept lower wages than American candidates for identical roles. This perspective is particularly prevalent among Republicans who align with former President Trump’s strict immigration policies.
Paradoxically, some of former President Trump’s key supporters include prominent figures in the tech industry. This sector heavily depends on H-1B workers, with employers consistently stating a shortage of qualified American professionals for these specialized positions.
The introduction of this new fee has already generated widespread uncertainty and disruption across various industries. However, the tech sector is anticipated to bear the brunt of its impact.
Do H-1B holders replace American workers?
To secure an H-1B visa, employers are required to formally confirm that they first sought qualified domestic candidates and that hiring an H-1B worker will not negatively impact the wages or working conditions of American employees.
Historical instances show the program being used to replace American workers. 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, similar situations impacted employees at Toys “R” Us and the New York Life Insurance Company.
The H-1B program mandates that employers pay foreign workers at least the average prevailing wage for their role and location, or the average wage of American-born workers in comparable positions. While companies are explicitly forbidden from underpaying H-1B workers compared to similarly qualified domestic staff, a 2019 report by the Economic Policy Institute found that roughly 60 percent of these positions offered salaries ‘well below’ the local median wage. The Institute attributed this discrepancy to the Labor Department’s considerable latitude in establishing H-1B wage levels.