President Trump has intensified his broad approach to immigration, recently focusing on a visa program for skilled foreign workers. On Friday, he signed a proclamation introducing a substantial $100,000 fee for new H-1B visa applicants, impacting foreign professionals like software engineers seeking employment in the United States.
The H-1B visa program was originally designed to help American companies fill specialized roles when a shortage of qualified local workers existed. However, immigration hard-liners and conservative groups have long criticized the program, claiming it allows businesses to replace American employees with foreign talent. This issue has even caused divisions among Mr. Trump’s supporters, and his personal views on the program have changed over time.
Before the proclamation was signed in the Oval Office, Howard Lutnick, the secretary of commerce, articulated the administration’s reasoning behind the fee, labeling the H-1B as the “most abused visa.”
“The fundamental idea is that major tech companies and other businesses will no longer simply train foreign workers,” Mr. Lutnick stated. “They will now be required to pay the government $100,000, in addition to compensating the employee. This makes it financially unviable. If you’re going to invest in training someone, that person should be a recent graduate from one of our nation’s excellent universities.”
This new fee is expected to face legal challenges. It is set to become effective on September 21 and will only apply to new applicants, as detailed in a Saturday memo from U.S. Citizenship and Immigration Services.
Here’s a breakdown of what you need to understand:
What is the H-1B visa program?
The H-1B program was established by Congress in 1990 to address anticipated labor shortages. When then-President George Bush enacted the legislation, he emphasized that it would “encourage the immigration of exceptionally talented people, such as scientists, engineers and educators.”
Employers utilize these visas, which are initially valid for three years and can be extended, to hire foreign workers with specific skills, predominantly in science and technology fields, for positions where qualified American candidates are scarce.
The process involves employers submitting a petition to the government on behalf of a chosen foreign worker, detailing the job and the individual’s qualifications. While the H-1B grants temporary status, not permanent residency, many employers eventually sponsor their H-1B workers for a green card, providing a pathway to U.S. citizenship.
By Saturday, there was still some uncertainty regarding the fee’s implementation. Mr. Lutnick initially indicated it would be an annual payment from the hiring company, but White House press secretary Karoline Leavitt later clarified on social media that it would be a one-time charge of $100,000.
Who are the workers under the program?
Each year, Congress allocates 65,000 H-1B visas for individuals with a bachelor’s degree or equivalent, and an additional 20,000 for those with a master’s degree or higher. Educational and research institutions are exempt from these annual limits.
A significant portion of H-1B recipients work as software engineers, computer programmers, and other technology professionals. Companies such as Amazon, Google, Meta, Microsoft, Apple, and I.B.M. were among the largest employers of H-1B visa holders last year, according to U.S. Citizenship and Immigration Services. However, the program also supports professionals in various other sectors, including education, healthcare, and manufacturing.
There are no country-specific caps, and a substantial majority—roughly two-thirds to three-quarters—of these visas are granted to individuals from India.
India’s Ministry of External Affairs, in a Facebook post on Saturday, highlighted the strong ties between the two nations and expressed concern that these sudden policy changes could lead to “humanitarian consequences” for families. Many H-1B visa holders bring their spouses and children, who often reside in the U.S. for decades on dependent visas.
Why has the H-1B visa program been criticized by some Republicans?
Approximately 730,000 H-1B visa holders currently reside in the United States, according to an estimate from fwd.us, an immigration advocacy group. This represents a small fraction of the more than 163 million people employed as of September.
Critics of the visa program argue that American employers frequently use H-1B visas to hire foreign workers who are willing to accept lower salaries than American applicants for the same positions. Many of these critics are Republicans who align with Mr. Trump’s firm stance on immigration.
Paradoxically, some of Mr. Trump’s prominent supporters are leaders in the tech industry, which heavily relies on H-1B workers. These employers often contend that they struggle to find enough qualified American workers to fill available jobs.
The introduction of this new fee has caused widespread confusion and disruption across various industries, with the tech sector of the economy expected to be particularly hard hit.
Do H-1B holders replace American workers?
To qualify for an H-1B visa, employers designated by the government as “H-1B dependent” are required to first recruit domestic candidates. Employers must also pay H-1B workers at least the “actual wage” for similar positions or the “prevailing wage,” defined by the government as the average wage paid to similarly employed workers in a specific occupation.
There have been instances where the program was used to bring in foreign workers for jobs previously held by Americans. In 2015, about 250 technology workers at Walt Disney World in Orlando, Florida, were laid off and instructed to train their replacements—H-1B visa holders 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.
While the program mandates that H-1B workers be paid at least the average wage for the job and location, or the average wage of American-born workers in the same role, a 2019 report by the Economic Policy Institute indicated that approximately 60 percent of positions paid “well below” the local median wage. This discrepancy was attributed to the Labor Department’s “broad discretion” in setting H-1B wage levels.