In a significant escalation of his immigration policies, President Trump announced a new measure targeting skilled foreign workers. On Friday, he signed a proclamation imposing a hefty $100,000 fee on all new H-1B visa applications. This visa category allows foreign professionals, particularly those in fields like software engineering, to work in the United States.
While the H-1B visa program was originally created to help U.S. companies fill roles requiring specialized skills when qualified American workers are unavailable, it has long been a flashpoint. Critics, including many immigration hard-liners and far-right groups, contend that the visa is exploited by companies to replace American employees with cheaper foreign labor. This debate has even caused divisions among Mr. Trump’s own base, and his personal views on the program have evolved considerably over the years.
Before the new proclamation was formally signed in the Oval Office on Friday, Secretary of Commerce Howard Lutnick articulated the administration’s justification for this significant fee. He described the H-1B as the “most abused visa,” emphasizing the need for stricter controls.
“The fundamental principle here is to prevent large tech firms and other companies from primarily relying on and training foreign workers,” stated Mr. Lutnick. “By imposing a $100,000 government fee on top of employee salaries, it simply becomes economically unfeasible. The clear expectation is that if a company is investing in training, that investment should go towards recent graduates from America’s exceptional universities.”
This new fee is expected to face immediate legal challenges. It is set to take effect on September 21st and will apply exclusively to new H-1B visa applicants, as confirmed by a memo released Saturday by U.S. Citizenship and Immigration Services.
Here’s a closer look at the H-1B program and these recent changes.
What is the H-1B visa program?
The H-1B program was established by Congress in 1990 during a period of anticipated labor shortages. When President George Bush signed the legislation, he emphasized that its goal was to “encourage the immigration of exceptionally talented people, such as scientists, engineers and educators.”
These visas, typically valid for three years with renewal options, enable employers to recruit foreign professionals with specific skills, predominantly in science and technology sectors, to fill roles where a sufficient pool of American talent is not available.
To secure an H-1B visa, employers must submit a petition to the government, detailing the job description and the foreign worker’s qualifications. While the H-1B grants temporary employment status, not permanent residency, many recipients are eventually sponsored by their employers for a green card, leading to a pathway to U.S. citizenship.
As of Saturday, there was still significant confusion surrounding the exact implementation of the new fee. On Friday, Mr. Lutnick indicated it would be an annual payment by the hiring U.S. company. However, White House press secretary Karoline Leavitt later clarified via social media that the $100,000 would be a one-time charge per visa.
Who does the H-1B program serve?
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 master’s degrees or higher. Educational institutions and research bodies are exempt from these numerical limitations.
The majority 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 IBM were among the top employers of H-1B visa holders last year, according to U.S. Citizenship and Immigration Services. However, a significant number of these visa holders also work in other critical fields like education, healthcare, and manufacturing.
Notably, there are no country-specific caps for H-1B visas, and a substantial majority—roughly two-thirds to three-quarters—of all recipients originate from India.
In response to these developments, India’s Ministry of External Affairs released a statement on Facebook, highlighting the strong bilateral ties and voicing apprehension about potential “humanitarian consequences” for families due to the sudden policy shifts. Many H-1B visa holders bring their families to the U.S., where spouses and children can reside for extended periods on dependent visas.
Why do some Republicans criticize the H-1B program?
An estimated 730,000 H-1B visa holders currently reside in the United States, as reported earlier this year by fwd.us, an immigration advocacy organization. This figure represents a minor portion of the overall U.S. workforce, which totaled over 163 million employed individuals as of September.
A central criticism of the H-1B visa is the argument that U.S. employers frequently utilize it to recruit foreign workers who are willing to accept lower wages than American candidates for identical positions. This perspective is widely held by many Republicans who align with Mr. Trump’s firm stance on immigration policy.
Paradoxically, some of President Trump’s key supporters are influential figures within the tech industry. This sector heavily depends on H-1B workers, citing a persistent shortage of qualified American professionals for these specialized roles.
The introduction of this new fee has already generated widespread confusion and uncertainty across various industries. However, the tech sector is expected to bear a particularly heavy impact.
Do H-1B visa holders displace American workers?
For “H-1B dependent” employers (as defined by the government), the process of obtaining an H-1B visa mandates a primary focus on recruiting domestic candidates. These employers are legally obligated to compensate H-1B workers at a rate no less than the “actual wage” paid to similar employees, or the “prevailing wage,” which represents the average salary for comparable roles in a given occupation.
Despite regulations, instances have occurred where the program facilitated the replacement of American workers. A notable example from 2015 involved approximately 250 technology employees at Walt Disney World in Orlando, Fla. They were informed of their layoffs and, controversially, required to train their H-1B visa-holding replacements, who were brought in by an Indian-based outsourcing company. Similar situations impacted employees at Toys “R” Us and the New York Life Insurance Company that same year.
Current regulations stipulate that employers must pay H-1B workers, at a minimum, either the average wage for the job and the city where it is based, or the average wage of American-born workers doing the same job. This aims to prevent underpayment compared to American workers with similar skills. However, a 2019 analysis by the Economic Policy Institute found that roughly 60 percent of H-1B positions were paid “well below” the local median wage, attributing this discrepancy to the Labor Department’s considerable leeway in determining H-1B wage levels.