The H-1B visa program authorizes the temporary, non-immigrant employment of qualified individuals who are not otherwise authorized to work in the U.S. The duration of an H-1B visa classification is three years, but may be extended up to six. Moving forward, President Donald Trump’s administration will impose a $100,000 fee on employers per petition. Previously, that fee would be 20 to 50 times lower, depending on the circumstance.
A proclamation announced by Trump claimed that H-1B visas have “been deliberately exploited to replace, rather than supplement, American workers with lower-paid, lower-skilled labor.” Notably, the H-1B visa is specifically for those with a bachelor’s degree or its equivalent and in some cases, a master’s or doctorate degree.
Additionally, the program has a specific enforcement that foreigners are paid the same amount as existing U.S. workers. Per the requirement, if an entity participates in the H-1B program, it must maintain a Labor Condition Application. This requirement was created to prevent employers from undercutting U.S. workers by paying foreign workers less.
Over 70% of H-1B visa holders are Indian citizens. India’s Ministry of External Affairs responded to Trump’s new fee, stating it will likely have “humanitarian consequences” as many families were disrupted by the sudden change.
The American Immigration Council claims that the presidential proclamation is based on a false premise. Employers who comply with the set requirements for hiring workers with the H-1B program cannot lower wages or take opportunities away from comparable U.S. workers. This 100,000 fee harms U.S. competitiveness.
Tech companies in Silicon Valley rely on a steady stream of start-ups to move forward with technological advancements. With the new policy, this could change the current workflow.
“The policy change disrupts the pipeline of top tech talent coming into the United States and compromises its edge in the global A.I. race,” Red Glass Ventures Managing Partner Bilal Zuberi said.
From 1990 to 2010, H-1B holders caused 30-50% of all productivity growth in the U.S. economy, meaning most Americans depend on these workers. Foreign workers invest their wages in the U.S. economy, which in turn increases consumer demand and creates new jobs. With this newly implemented fee for international employees, this trend could change in the coming future.
