The Trump administration’s abrupt on H-1B visas has stunned and confused employers, students and workers from the United States to India and beyond.
Since announcing the decision Friday, the White House has tried to reassure jittery companies that the fee does not apply to existing visa holders and that their H-1B employees traveling abroad will not be stranded, unable to re-enter the United States without coming up with $100,000. The new policy took effect at 12:01 a.m. Eastern Sunday.
Despite the effort at reassurance, “there’s still some folks out there recommending to their H-1B employees that they not travel right now until it’s a little clearer,’’ Leon Rodriguez, a partner at the Seyfarth law firm who was director of U.S. Citizenship and Immigration Services in the Obama administration.
Here’s a look at what the H-1B visa program is and what the Trump administration is doing to it.
What are H-1B visas and who uses them?
Created by the 1990 Immigration Act, they are type of nonimmigrant visa, meant to allow American companies to bring in people with technical skills that are hard to find in the United States. The visas are not intended for people who want to stay permanently. Some eventually do, but only after transitioning to different immigration statuses.
An H-1B allows employers to hire foreign workers who have specialized skills and a bachelor’s degree or the equivalent. They are good for three years and can be extended another three years, suggesting that there are now “around 700,000 H-1B visa holders in the country and another half a million or so dependents,” economist Stephen Brown of Capital Economics wrote in a commentary Monday.
At least 60% of the H-1B visas approved since 2012 have been for computer-related jobs, But hospitals, banks, universities and a wide range of other employers can and do apply for H-1B visas.
The number of new visas issued annually is capped at 65,000, plus an additional 20,000 for people with a master’s degree or higher. Those visas are handed out by a lottery. Some employers, such as universities and nonprofits, are exempt from the limits.
According to Pew, nearly three-quarters of those whose applications were approved in 2023 came from India.
What did Trump do?
The White House announced the $100,000 fee. The application fee is currently $215, plus other relatively nominal processing charges. It took effect barely 24 hours later.
Commerce Secretary Howard Lutnick said the fee would be applied annually, for a total of $600,000 over the maximum number of renewals allowed. The White House clarified Saturday that it was a one-time fee and said it would not apply to current visa holders.
Trump also rolled out a $1 million “gold card” visa for wealthy individuals.
The moves are certain to draw lawsuits charging that the president was improperly sidestepping Congress with a dramatic overhaul of the legal immigration system.
Why target H-1B visas?
Critics say they undercut American workers, luring people from overseas who are often willing to work for less than American tech workers do. Staffing companies such as Tata Consultancy Services often supply Indian workers to corporate clients.
“To take advantage of artificially low labor costs incentivized by the program, companies close their IT divisions, fire their American staff, and outsource IT jobs to lower-paid foreign workers,’’ the White House said in its proclamation Friday.
In a 2020 report, the left-leaning Economic Policy Institute certified by U.S. Labor Department are assigned wages below the median for the job.
Brown at Capital Economics wrote that “it is hard to disagree with the administration’s argument that the program needs reform.’’
What impact will the H-1B crackdown have?
Brown said that many tech firms can probably afford to pay $100,000 to bring in skilled workers.
“Nonetheless,″ he wrote, “the upfront fee will clearly be too high for many companies to stomach. Last year, the healthcare, retail and accommodation & food services sectors accounted for a quarter of H-1B visas between them, and firms in those sectors will probably find it harder to afford the fee.″
The higher fee — along with other Trump administration attempts to curb immigration — is likely to reduce the U.S. labor supply and push wages higher, Brown said.
Navneet Singh, who runs a consultancy “Go Global Immigration” in India’s Punjab state, said changes to H-1B visa policies are likely to significantly impact future migration to the U.S., particularly from India.
“Trump is trying to suffocate new immigrants who are skilled, so that they won’t take the jobs away from the average American. But by doing so, they will be making (U.S.) production expensive,” Singh said.
He said the new policy is likely to create advantages for competitors in other countries. “Countries like France, Netherlands, Germany and Canada are set to gain from this move,” he added.
Some Indian students aspiring to pursue higher studies in the U.S. are disappointed.
Due to the new policy, “opportunities will shrink, especially for Indians, since so many of us depend on H-1B visas to build a career there,” said a student in New Delhi who had planned to study in the U.S. He didn’t want to be identified.
“It feels like a door closing. All this adds to the mutual loss of knowledge and skills caused by the new policies,” said another spiring student who requested anonymity. “It’s not just about money or getting a job but it also affects family decisions, education loans, and even the sense of stability for those already there.”
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Barbara Ortutay reported from Oakland, California, and Piyush Nagpal from New Delhi, India.
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