In a surprising turn of events, when former US President Donald Trump signed an executive order adding a $100,000 fee for applications for H-1B visas, many small firms found themselves in a state of uncertainty. This significant fee, aimed at foreign skilled workers, posed immediate concerns for professionals like Abhishek Singh, a software engineering manager from the Seattle area. He feared that his employer, a US startup, would struggle to afford this additional expense on top of his existing salary, potentially forcing him to consider relocation.
After a brief moment of relief when the White House clarified that the new fee would apply only to future applicants, Mr. Singh's worries highlighted the potential ramifications of this policy change. The increase in H-1B visa fees could impose new burdens on businesses, particularly startups, with far-reaching consequences for innovation and economic growth.
The H-1B visa program is frequently linked with major players in the US tech sector. In fact, Amazon led the charge with over 10,000 H-1B visas approved in the first half of 2025, while other giants like Microsoft, Meta, Apple, and Google each received more than 4,000 visas during the same period. However, despite these large corporations dominating the program—accounting for approximately 40% of new H-1B visas—it is crucial to note that smaller firms and startups also rely on this visa system to employ skilled workers.
For startups, the introduction of a six-figure fee per applicant could prove financially devastating. John Skrentny, a professor at the University of California, San Diego, emphasized that many companies simply cannot afford such an expense. He pointed out that for startups with limited venture capital, the burden of a $100,000 fee could be a death knell for their operations.
The implications of this executive order extend beyond the tech industry into sectors like education and healthcare, which depend on the H-1B program to address workforce shortages. Karen Brady, CEO of Ryther, a behavioral health nonprofit in Seattle, expressed her concerns, stating, "There's no way we can afford $100,000." The behavioral health sector has faced a severe workforce shortage, exacerbated by the pandemic, and hiring through the H-1B program has been a vital strategy in addressing this crisis.
Brady noted that Ryther employs two therapists on H-1B visas, crucial for connecting with clients from similar linguistic and cultural backgrounds. Without these skilled workers, the organization would struggle to provide effective services.
Atakan Bakiskan, an economist at Berenberg, recently revised his US growth forecast down from 2% to 1.5%, attributing the change to the new H-1B visa fee and labeling it part of a broader anti-growth policy agenda. He warned that the new policy could contribute to a shrinking labor force and negatively impact productivity, posing a significant challenge for the US economy.
In justification of the new fee, Trump pointed to alleged abuses of the H-1B program, a concern shared across the political spectrum regarding companies hiring foreign staff at lower wages. His administration is also contemplating a broader overhaul of the program, which is often inundated with applications for the limited 85,000 new visas available each year. This includes proposals to prioritize applications for higher-paid workers.
While some tech leaders, like Netflix co-founder Reed Hastings, praised the fee as "a great solution," opinions are divided. Supporters argue that major tech firms can absorb the fee without issue. However, critics, including Dan Wang from Columbia Business School, assert that such policies could lead companies to offshore jobs instead of hiring US workers. "There's no evidence that suggests American workers would benefit from this," he stated.
Elise Fialkowski, co-chair of the corporate immigration practice at Klasko Immigration Law Partners, noted that some larger clients are now contemplating hiring talent from countries like Canada and the UK due to the new fees. "Trump's executive order almost begs companies to offshore work," she asserted, highlighting the unintended consequences of this policy change on the labor market.
As small firms and startups navigate the implications of the new H-1B visa fee, the future of skilled foreign workers in the US remains uncertain. The evolving landscape of immigration policy could significantly impact innovation, economic growth, and the availability of skilled labor across various sectors.
