Fees Skyrocket for H-1B Visa Hopefuls

In fiscal year 2022, over 400,000 people were admitted to the United States with an H-1B visa for highly-skilled workers. Now, the Trump administration has made it infinitely more difficult to join their ranks, recently signing an executive order that introduced a $100,000 fee in exchange for H1-B visas, increasing the fee by roughly 60 times what it was before. 

The H-1B visa, which requires at least a bachelor’s degree, is most commonly used to recruit highly-skilled foreign workers for cheaper than domestic workers and positions where qualified US workers are scarce. This is particularly true in the tech industry: in late June, Amazon had over 10,000 workers here on H-1B visas, with other large employers including Microsoft, Meta, Apple, Google, JPMorgan Chase, Walmart, and Deloitte.  

The announcement was accompanied with mass confusion, with Goldman Sachs and Fragomen, an immigration law firm, advising employees and clients with H1-B visas to exercise caution around international travel and return to the US by Sunday to avoid triggering the large fees. Press Secretary Karoline Leavitt clarified the confusion later in the day, stating the new fee would not apply to current visa-holders in the US. What happens in more niche scenarios remains unclear. NPR warns that for the largest H-1B employers, the new fee could increase their financial burden by over $1 billion each year. 

Although these companies are likely to disagree with the decision—Garry Tan, CEO of Y Combinator, said this would “kneecap” start-ups and give a boost to foreign companies—they will likely seek to minimize the cost, pushing them to hire fewer foreign-born workers in favor of giving priority to domestic workers. Graduates from top universities abroad who were preparing to move into American firms may see their chances dwindle as a result. That’s an outcome the Trump administration wants to see:  “President Trump promised to put American workers first, and this common sense action does just that by discouraging companies from spamming the system and driving down wages,” Taylor Rogers, a White House spokeswoman, said. 

The administration says the H-1B system has been abused by corporations seeking cheap labor at the expense of Americans. By setting such a steep fee, the White House wants to make sure only firms that truly need foreign workers will apply. Their rationale is that if an employer is willing to spend $100,000 before even paying the worker, then the role must be critical and highly skilled.

It’s worth noting that before the executive order, American companies seeking an H-1B worker had to promise they hadn’t been able to find American workers with similar skills. The move will likely be challenged in court, since visa fees can usually only be implemented through Congressional legislation, not executive order. 

In a separate executive order passed the same day, President Trump created his long-promoted “gold card” program, where individuals can pay $1 million (or companies pay $2 million to sponsor an individual) for an expedited visa to the US. He also added a Platinum Card option with his original $5 million price tag, allowing platinum card holders to spend 270 days a year in the US without having to pay taxes on non-US income. Howard Lutnick, the current secretary of commerce, told reporters the gold and platinum cards would “replace employment-based visas that offer paths to citizenship.”

To supporters of Trump’s order, the old H-1B process was riddled with abuse and pushed Americans out of the job market. To critics, it is an attack on the very program that brought thousands of innovators to U.S. shores. The debate will only intensify as courts weigh in and industries scramble to adjust. However, for now, one thing is certain. The cost of hiring a foreign worker just skyrocketed, and the U.S. immigration system is entering uncharted territory.

Extemp Analysis by Lindsey Zhao

Q: Will the new 100K fee on H1-B visas help America?

B: explain how H1-B visas work and how they’re usually for skilled employees; introduce the fee; introduce preliminary reactions

A: No, make foreign labor prohibitively expensive

1. increased big company domination

   1. domestic workers expect to be paid more

   2. could result in shift of workers from small startups to big companies who can afford to raise wage floor -> monopolization

2. strengthens international competition 

   1. they would rather take their chances in other tech hubs, uncertainty around new policy

   2. decreases US dominance and yap your way through some foreign policy stuff -> less innovation that benefits Americans

3. discourage international students

   1. international students often get H1-B visas to stay in the US post-grad

   2. but if that’s not a viable option, they won’t go to the US for school

   3. hurts colleges and reduces funding

Read more here: 

• Tyler Pager and Hamed Aleaziz, New York Times

• Joe Miller, Andrews Schipani et. al, Financial Times

• Barbara Ortutay and Seung Min Kim, PBS

• Ben Hatton, BBC