President Donald Trump’s decision to hike the application fee for companies in the United States hiring overseas workers on H-1B visas is likely to push many foreign skilled workers to seek jobs in other countries instead.
The steep cost rise to $100,000 per application is designed to encourage US companies to favour US workers over foreign skilled workers. But it comes as a blow to big technology companies in particular, as they rely heavily on skilled workers from overseas.
Recommended Stories
list of 4 itemsend of list
The H-1B visa was introduced in 1990 under President George HW Bush. Today, Indian tech workers constitute the bulk of H-1B visa recipients – last year, they received 71 percent of approved H-1B visas, followed by Chinese nationals in second place with 11.7 percent.
Trump’s move could lead to weaker economic growth in the US, experts have warned, since higher costs for employers will make it harder to retain foreign talent. It could also lead to a near-term “brain drain”, as skilled university graduates are forced to leave the US in favour of other countries.
What has the Trump administration announced in relation to H-1B visas?
In a decree signed by Trump on September 19, his administration announced that from 12:01am ET (04:01 GMT) on September 21, US companies must pay $100,000 per H-1B application.
The fees previously ranged from $2,000 to $5,000, depending on the size of the company applying for the visa. The H-1B visa, initially granted for up to three years, enables US companies to hire foreign workers with specialised skills. It can be extended up to six years, but the application fee must be paid again when extending the visa.
The H-1B programme facilitates 65,000 visas annually for employers bringing in temporary foreign workers in specialised fields, as well as a further 20,000 visas for workers with advanced degrees, particularly in STEM (science, technology, engineering and mathematics) industries.
“The fee is a one-time fee on submission of a new H-1B petition,” the White House said on Sunday. It added that the rules will not apply to people who already hold H-1B visas or those who submitted their applications before September 21.
The Department of Homeland Security will also now prioritise high-skilled, high-paid applicants in the H-1B lottery over those earning less. Other changes to the H-1B visa are also under consideration, the Trump administration said.
Critics have long argued that H-1B is misused by companies bringing in workers at wages lower than those they would have to pay US employees, thereby forfeiting jobs that would otherwise have gone to Americans.
The Indian government said on Saturday that it is examining the “full implications” of the new rules. India’s Ministry of External Affairs also stated: “This measure is likely to have humanitarian consequences by way of the disruption caused for families.”
Which industries are most affected?
Roughly two-thirds of existing H-1B jobs are in tech-related roles. According to the US Citizenship and Immigration Services, Amazon, Google, Meta, Microsoft, and Apple were among the companies which employed the most H-1B visa holders last year.
Trump’s new fee has sent shockwaves through the tech industry as a result. Microsoft, for instance, told employees that current holders of the visa should stay in the US “for the foreseeable future”.
Numerous tech industry leaders, including Alphabet chief executive Sundar Pichai, Microsoft CEO Satya Nadella and Tesla and SpaceX head Elon Musk, were at one point H-1B visa holders.
In 2024, Musk wrote on his X platform: “The reason I’m in America along with so many critical people who built SpaceX, Tesla and hundreds of other companies that made America strong is because of H-1B.”
How might other countries benefit from this?
Many countries are looking to shore up expertise in technology and STEM-related industries, and may be waiting to pounce on overseas specialists who can no longer take up jobs in the US because of the rise in cost of the H1-B visa.
United Kingdom
In response to the hike in price for H-1B visas, British Prime Minister Keir Starmer is thought to be exploring proposals to abolish visa fees for skilled foreign workers, the Financial Times reported on Monday, citing people briefed on the discussions inside the Treasury department.
Starmer’s “global talent task force” is working on ideas to lure top global scientists to the UK, including academics and digital experts, as it seeks to stimulate economic growth. One option being considered is abolishing all visa charges for top-level professionals.
China
Beijing will launch the new K Visa, which is aimed at attracting skilled workers in STEM, on October 1.
The K Visa will allow successful applicants to study and work in China without having first received a job offer or research position.
China’s Ministry of Foreign Affairs declined to comment on the US changes over the weekend, but said the country “welcomes” top-tier talent from all over the world.
South Korea
On Monday, the presidential chief of staff, Kang Hoon-sik, said he had instructed ministries to find ways to exploit the US visa changes to attract scientists and engineers from abroad to South Korea instead.
Kang did not give further details on what steps might be taken, but said the government plans to focus next year’s budget on initiatives around artificial intelligence (AI) and other areas designed to promote a technology-led economy.
Canada
On September 15, Canada lowered the cut-off score for its Comprehensive Ranking System, which regulates applications for permanent residence from skilled workers, allowing more candidates to be invited.
Canada could also consider reintroducing a 2023 visa programme which allowed those already on H-1B visas to migrate to Canada under more favourable terms for up to three years. The scheme closed in July this year, after the state cap of 10,000 applicants was reached.
