Introduction
On September 20, 2025, the US government announced a significant change to the H-1B visa program, imposing an annual fee of $100,000 on companies sponsoring foreign workers. This move is part of a broader effort to reform the US immigration system and prioritize American workers.
Details of the New Fee
The new fee applies to companies sponsoring H-1B visa holders and will be implemented starting immediately. According to a White House official, the fee will not be applied to existing holders of valid visas re-entering the country. However, for the biggest H-1B employers, such as tech companies like Microsoft and Amazon, and outsourcing companies like Cognizant, this could potentially mean a new fee burden in excess of $1 billion a year.
Impact on Tech Industry
The tech industry, which relies heavily on skilled workers from countries like India and China, is expected to be significantly affected by the new fee. Investors have already reacted to the news, shedding shares of IT outsourcing firms of all sizes, including Infosys, Tech Mahindra, Wipro, HCL Technologies, and Tata Consultancy Services.
Reaction from India
India, which is the largest beneficiary of the H-1B visa program, with over 70% of visa holders coming from the country, is expected to feel the impact of the new fee. The Indian government has expressed concerns about the potential disruption caused by the new policy.
US Government's Rationale
The US government has stated that the new fee is aimed at pressuring companies to train American workers for high-skilled jobs covered by the visa, rather than bringing in talent from abroad. Commerce Secretary Howard Lutnick said that the measure is intended to encourage companies to invest in American workers and reduce their reliance on foreign labor.
Quotes from Experts
Background on H-1B Visas
The H-1B visa program allows US companies to hire foreign workers in specialty occupations, such as technology, engineering, and healthcare. The program has become a major flashpoint between Trump's conservative base and the tech industry, which contributed millions of dollars to his presidential campaign.
Implications
The new fee is expected to have significant implications for the tech industry and the US economy. While the US government has stated that the measure is intended to prioritize American workers, critics argue that it will stifle innovation and growth.
Conclusion
The imposition of a $100,000 annual fee on H-1B visas is a significant change to the US immigration system. While the US government has stated that the measure is intended to prioritize American workers, the impact on the tech industry and the US economy remains to be seen.