The H-1B visa, a portal for talented employees to enter the US for decades, now will have an additional charge of $100,000 per employee. The fee, created by President Trump in an executive order, is a dramatic departure from the prior average cost of approximately $10,000, including attorney and administrative fees. Companies must now weigh if it is worth paying the steep upfront fee to bring in foreign workers, something which will certainly alter the types of employees they bring in, the New York Times said.
Why salary thresholds matter
Economists estimate that to be worth the new cost, companies would need to have a worker earning about $225,000 annually if the visa is used for its typical three-year duration. If renewed for an additional three years, the break-even point drops to about $111,000. However, figures made public by the US Labor Department show that less than one in ten H-1B petitions issued last year involved jobs that paid more than $225,000. Most of the applications, including those from Amazon and other consulting companies like Tata, were for salaries well below this point, suggesting that the fee could make many jobs economically unsustainable.
Indian IT companies
Indian companies like Tata Consultancy Services, Infosys, and Wipro have long relied on the H-1B program to place employees in the US. In 2024, Tata submitted almost 10,000 H-1B job requests, all under the $225,000 cap, with an average wage of some $89,000. With the new fee, such companies would have to pay much more for jobs that are in lower-margin categories and might be forced to reduce sharply their filings or reconsider how they assign US projects. It may reduce opportunities for an estimated tens of thousands of Indian professionals who have long made up a large share of H-1B recipients.
What it means to US tech giants
Indian IT services companies may feel the pinch of the policy, but American tech companies are not immune. Amazon filed over 21,000 H-1B petitions in 2024, but a mere 4 percent exceeded the $225,000 salary mark. While businesses like Amazon, Google, and Microsoft may still pursue H-1B recruitments for high-paid jobs, the number of applicants will likely fall. Ironically, that would decrease competition in the H-1B lottery, and bigger businesses are able to secure visas for their top foreign-paid workers with greater ease.
Broader economic and immigration impact
The policy may alter the availability of foreign talent. The majority of H-1B employees are Indian and Chinese, but also Venezuelan, Filipino, and Mexican. By pricing the visas beyond the means for lower-paying jobs, the US risks lowering diversity and numbers of skilled workers entering into its labour pool. Nearly one in five US computer programmers and one in four US scientists are foreign-born. Severing that pipeline might also create skill gaps in other areas like tech, healthcare, and academia.
The big picture
Trump framed the fee as a way to benefit American workers and discourage companies from bringing cheaper foreigners in to work. Critics argue, however, that it undermines the original purpose of the H-1B program, which was to introduce highly skilled professionals to augment the US economy. For now, there's uncertainty: firms are still calculating whether it's worth the hefty fee to pay when the visas are awarded by lottery. For Indian software engineers and global job seekers, the once highly coveted H-1B route might no longer be the same opportunity doorway.
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