When President Donald Trump announced that he was restricting entry to the U.S. to H-1B recipients who hadn’t paid a $100,000 fee, panic spread through the tech industry. Microsoft, Amazon and Google reportedly even arranged last-minute flights for their overseas H-1B workers to rush back to the country before the rule took effect.
The White House later clarified that the fee doesn’t pertain to existing H-1B holders, easing some of the immediate alarm. But many executives are still worried that the massive cost hike will affect their ability to hire top talent, particularly in specialized fields like artificial intelligence and biotechnology. After all, some of the nation’s most prominent tech leaders came to the United States on an H-1B visa, including Microsoft CEO Satya Nadella, Alphabet CEO Sundar Pichai and Elon Musk, the CEO of Tesla, SpaceX and xAI.
What Is the New $100,000 Fee for H-1B Visas?
Starting September 21, 2025, the fee for an H-1B visa increased to $100,000. The fee hike was intended to discourage employers from hiring foreign labor over American workers, but some in the tech industry have said it could unfairly impact startups, motivate American companies to open offshore offices and generally hurt American companies’ ability to recruit the world’s top tech talent.
The policy change was intended to discourage tech companies from hiring cheaper foreign labor over American workers, but some industry leaders say the $100,000 fee is too steep. Critics warn it will disproportionately hurt smaller startups, drive companies to open offshore offices and, ultimately, hurt American companies’ ability to recruit the best and the brightest tech talent.
First, What Is the H-1B Visa Program?
The H-1B visa program was established in 1990 to help U.S. employers hire foreign professionals in highly specialized occupations, such as engineering, technology and medicine. It allows workers to live and work in the United States for three years, with the option to renew for an additional three years. Today, there are an estimated 730,000 H-1B visa holders, and an additional 550,000 dependents, according to immigration advocacy group FWD.us. More than 70 percent of those holders come from India, according to federal data, and nearly 12 percent come from China.
This is an extremely competitive program, granting just 85,000 new visas annually — 65,000 for general applicants and 20,000 for those with advanced degrees. In the 2025 fiscal year alone, more than 470,000 applications were submitted. U.S. Citizenship and Immigration Services (USCIS) decides which applications are approved through a lottery system, which begins in March each year.
Amazon won the most H-1B visas in 2025, with federal data showing it received more than 10,000 visas. India-based IT services firm Tata Consultancy Services had the second highest allocations, with more than 5,505 visas. Microsoft, Meta, Apple and Google all received more than 4,000 visas.
What We Know About Trump’s $100,000 Fee for H-1B Visas
On September 19, 2025, Trump signed a proclamation requiring employers to pay a $100,000 fee for each new H-1B visa application, not including renewal applications. The fee is a dramatic increase from the program’s previous administrative fees, which ranged from $1,700 to $4,500. Some attorneys have said an H-1B application could cost as much as $10,000 to file. The fee hike took effect on September 21, so it will be levied in the next lottery cycle, which begins March 2026.
The proclamation says this $100,000 fee will not apply if the secretary of Homeland Security believes a worker’s hiring is in the “national interest” and doesn’t “pose a threat to the security or welfare of the United States.” It does not specify exactly what types of workers would qualify for this exemption, though.
The proclamation also calls for the Department of Labor to revise and raise the prevailing wage levels to ensure companies are only hiring the most skilled foreign workers. And it tasks the Department of Homeland Security with setting rules for prioritizing high-skilled, high-paid workers in the lottery system.
Why Did Trump Revise the H-1B Visa Program?
Trump’s proclamation claims the H-1B program has strayed from its original mission of bringing in high-skilled workers, and that it has been “deliberately exploited to replace, rather than supplement American workers with lower-paid, lower-skilled labor.” By undercutting American workers’ wages and job opportunities, the proclamation says the H-1B program has created a disincentive for Americans to go into STEM careers, which threatens America’s national security.
The administration noted that unemployment rates for recent colleges with a computer engineering or computer science degree has reached 7.5 percent and 6.1 percent, respectively, which is more than double the rate for biology or art history majors. Over the past 20 years, IT workers make up a greater share of H-1B visa recipients.
The administration also cited several examples of American companies laying off American workers while also hiring H-1B workers. One company, which was unnamed but presumably refers to Microsoft, received approval to hire 5,189 H-1B workers this year, while also laying off roughly 16,000 U.S. employees. Another company, presumably Intel, laid off 2,400 workers in Oregon in July, just months after receiving approval to hire 1,698 H-1B workers.
When the H-1B program is used to hire lower-skilled workers, it also takes valuable visas away from higher-skilled workers who could add value to the American economy, the proclamation argues.
Of the 85,000 H-1B visas awarded last year, nearly half went to multinational outsourcing companies or IT staffing firms that function as a middle man in IT staffing, according to a Bloomberg News investigation. Companies like Tata Consultancy Services, Wipro, Infosys and Cognizant use H-1B visas to perform IT services on a contract basis for American companies, saving them the cost of hiring in-house labor. Additionally, the investigation found some of these companies cheated on a “massive scale” by submitting multiple lottery entries — as many as 15 — for the same person.
What This Could Mean for the Tech Industry
H-1B Visa Applications Will Likely Drop
First and foremost, this new H-1B fee will most likely discourage tech companies from hiring H-1B workers, with JP Morgan economists predicting a reduction of 5,500 work authorizations per month. An analysis by The New York Times found a third of the H-1B applications filed last year were for positions paying less than or equal to $100,000, so tech companies would probably not pay a $100,000 fee for those jobs.
Hiring Practices May Change
The increased H-1B fee may also deter some India-based IT services firms from hiring less-skilled workers, which could motivate their American clients to either hire their own workers or contract with a firm based in the United States. The fee hike may even encourage some U.S. tech companies to hire more American workers where they might have once hired a H-1B worker. However, many experts have long said there’s a shortage of top tech talent in the United States, so it remains to be seen whether there are enough U.S. workers with the right skillsets to handle the jobs filled by H-1B workers.
Alternatively, some analysts predict that, instead of hiring workers on a H-1B visa, American companies will simply set up more overseas offices in India — a growing trend among American companies. The New York Times estimates there are 1.9 million people in India working for foreign companies, and it predicts another 600,000 to 900,000 workers will join those ranks by 2030.
Startups Will Probably Struggle the Most
Others in the tech industry said the new H-1B fee will disproportionately harm smaller tech companies, creating an uneven playing field that benefits larger companies. Garry Tan, president and CEO of startup accelerator Y Combinator, wrote a post saying that the $100,000 fee “won’t bother big tech” companies, but it will “kneecap startups.” He also argued that there are other policies that would stop H-1B abuses without further entrenching tech giants and throttling startups.
America Could Lose Its AI Edge
Economists generally agree that the hiring of H-1B talent from overseas helps companies in the long run. By hiring employees with specialized, hard-to-find skillsets, they can spur the growth of the company and create more jobs that align with U.S. workers’ skillsets.
The United States will need the world’s best AI talent if it wants to continue to lead AI innovation, and companies like Meta, OpenAI and others have shown they are willing to pay astronomical salaries to recruit the top AI researchers from India, China and other foreign countries.
Industry analysts warn that these changes to the H-1B program might impact the U.S.’s ability to attract top tech talent from abroad, and that foreign STEM students might be dissuaded from attending U.S. universities due to the reduced chance of winning a H-1B job after graduation.
“I think this is going to mean that we’re fighting the AI war against China with one hand tied behind our back,” Adam Kovacevich, founder and CEO of tech industry policy coalition Chamber of Progress, told The New York Times. “There is a limited number of top talent in AI, and some of that is foreign-born.”
Frequently Asked Questions
How much is the new fee for H-1B?
On September 21, 2025, the fee for an H-1B visa increased to $100,000. The fee, which may be challenged in court, will be in effect for the next H-1B lottery cycle in March 2026.
Who does the $100,000 H-1B fee apply to?
The new $100,000 fee applies to all new applications for an H-1B visa. It does not apply to current H-1B visa holders, and it does not apply to applicants seeking an H-1B visa renewal.
