Explainer: How US hopes to deter foreign workers with steep H-1B visa fee

l  What has the US proposed?

THE US DEPARTMENT of Homeland Security (DHS) has proposed to levy a new six-figure fee on all fresh H-1B visa petitions. The fee — a steep $103,265 — would be payable at the time of filing for all H-1B cap-subject petitions (annual 65,000 visas under the regular cap) plus the 20,000 visas for foreign workers with a US master’s degree or higher. Cap-exempt H-1B petitions, including petitions filed by institutions of higher education, affiliated nonprofit organisations, nonprofit research organisations and governmental research organisations are not covered by this proposal and it would not automatically apply to every H-1B extension or transfer petition. This is a proposed employer-side fee and companies sponsoring any new foreign worker will have to pay this fee. The fee would be in addition to all other applicable fees or payments.

The H-1B visa is valid for three years and can be renewed for another three years; after that it can be extended an unlimited number of times if the visa holder is waiting for a green card. The typical fees for the H-1B visas ranged between $2,000 and $5,000 during the Biden administration.

l  What does this mean for visa seekers from India?

MORE THAN 70% of H-1B visa applicants are Indian nationals. The proposed hike may force Indian IT services companies to rethink their strategy of moving staff trained in India to the US for two-three year assignments, while making them more selective about the talent they deploy onsite. Large technology firms may have the financial capacity to absorb the additional cost for specialised or senior talent, but could still become more selective about new sponsorships. Industry body Nasscom has urged the US to weigh the H-1B programme’s role in addressing skill shortages there. Meanwhile, Indian-American advocacy group Foundation for India and Indian Diaspora Studies said the additional fee could make legitimate hiring economic-ally impractical and push high-value US jobs overseas. It could choke cash-strapped startups, while firms hiring thousands of H-1B workers could face huge additional costs, it said in a statement.

l What rationale has the DHS given?

THE LATEST PROPOSAL is a fresh attempt by the Donald Trump administration to make it prohibitively costly for US employers to bring foreign workers into the country. A federal court in June had struck down an earlier attempt through a Presidential proclamation to put a $100,000 fee on visas. Unlike the earlier measure, the new fee is being proposed by the DHS through formal rule-making under its fee-setting authority. The DHS has said the fee would serve as a dedicated revenue mechanism to help recover a portion of the government’s costs of administering the lawful immigration system, covering the ambit of activities by the DHS, US Departments of Justice, State and Labour. It estimates that the federal government spends about $8.78 billion every year for running the immigration system. Assuming 85,000 cap-subject H-1B petitions annually, that would mean $103,265 per petition: the exact fee that the DHS is now proposing to impose on these visas.

l  Will it face legal challenges?

WHILE IT SEEMS the Trump administration is on a stronger footing this time round, immigration lawyers say the proposal would face legal challenges. They believe that the DHS cannot impose fees, taxes or other means to generate revenue for the US without permission from Congress. The Hill quoted David Bier of the Cato Institute saying that even if the new fee did raise revenue, that would not make it legal because immigration fees can only be imposed to recover the costs of adjudication and naturalisation services.” And because this is a filing fee, employers would have to pay it with no guarantee that the US Citizenship and Immigration Services (USCIS) will approve the petition. Almost no one will risk more than $100,000 with no guarantee of approval,” Bier told The Hill. The first fee had led to a $28 million loss in revenue. The US government itself had told the federal court that the $100,000 fee was ‘arguably prohibitive’ and ‘does not raise revenue,'” he added.

l  Has H-1B applications fallen recently?

LAST YEAR’S FEE hike had discouraged H-1B visa requests. According to an Al Jazeera report, as of February 15, USCIS had received from 70 employers just 85 payments of the $100,000 fee. Trump and other H-1B critics have said that companies abuse the system by underpaying foreign workers for jobs that they could hire for locally, but at steeper salaries. “Given that demand for H-1B workers greatly exceeds the statutory cap, this fee could also have the indirect benefit of better protecting the wages and job opportunities of US workers, as the H-1B program is intended to do,” the DHS said in its proposed regulation. US employers last year registered for about 344,000 H-1B visas, 25% less than that in 2024, and fewer than half of the 794,000 visas sought in 2023, as per USCIS data.

Nasscom has said the number of H-1B workers employed by Indian IT companies has fallen sharply over the past five years as firms expanded their local US workforce.