First a $103K H-1B fee, now this: Trump admin eyes major changes to visa cap exemptions

In his second-term, President Donald Trump has largely focused on turning the existing H-1B visa program upside down. The work visa category responsible for recruiting foreign-born high-skilled professionals, especially on the technology front, has repeatedly come under fire since the Republican leader began his second presidential term in January 2025.

Countless members of his political party and official branches of his current administration have accused US employers of misusing H-1B visas to hire “cheap foreign labour” and replace American workers. The new proposal sent to the White House’s Office of Information and Regulatory Affairs outlines the DHS’s plans to scrutinise employers who have violated the visa program’s requirements. Among other directions, the proposal signals a potential revision of eligibility for cap exemptions.

H-1B visa approvals are facilitated through an annual lottery, which is capped at 85,000 visas a year, including 20,000 reserved for advanced degree holders. Certain employers are exempt from this cap, making way for better flexibility regarding employment opportunities and the ability to bypass the lottery.

DHS proposes new changes to H-1B program

Currently in its “Proposed Rule Stage,” the DHS/USCIS regulation titled ‘Reforming the H-1B Nonimmigrant Visa Classification Program’ (RIN: 1615-AD00) seeks to reform the H-1B program by revising eligibility for cap exemptions, providing greater scrutiny for employers that have violated program requirements, and increasing oversight over third party placements, among other provisions, according to the Office of Information and Regulatory Affairs website.

It further emphasises that these changes are intended to improve the “integrity” of the H-1B work visa program and “better protect” American workers’ wages and working conditions.

USCIS spokesperson Zach Kahler stressed that employment-based immigration must, first and foremost, benefit the United States, US businesses and American citizens, according to Newsweek. “To that end, US Citizenship and Immigration Services is working to ensure that employment-based visa programs are used primarily to supplement, not supplant American workers,” the official added.

For the time being, further details and contents of the proposed rule will remain under wraps and will only be released for publication in the Federal Register after they clear the Office of Management and Budget (OMB) review. Even after its Federal Register publication, the proposal will be open to public comments for a 30- or 60-day period.

The additional fee of $103,265 for all H-1B cap-subject petitions, including those eligible for the advance degree exemption, is also currently under OMB’s review. Homeland Security’s recently published Federal Register foregrounds that applying this amount to a projected annual volume of 85,000 H-1B cap-subject visas would yield an estimated annual revenue of approximately $8.8 billion.

“The proposed H‑1B fee is intended to recover the costs incurred across the federal government to adjudicate, vet, and support lawful immigration programs that otherwise must be funded by taxpayers,” USCIS spokesperson Zach Kahler said in a statement, as quoted by Bloomberg Law.

Vice President JD Vance voiced his support for the proposal to impose a $103,265 fee on H-1B visas. Re-posting the Wall Street Journal’s report on the issue, Vance wrote on X: “If an American corporation needs workers, it should hire and train Americans.”

US courts previously dismissed the Trump administration’s original plan to implement a $100,000 fee, which was ultimately branded an unlawful “tax.” US District Judge Leo Sorokin also ruled in June that the American president lacked authority to impose the new policy overhaul, as only the US Congress had the power to change federal immigration policy.

What are H-1B visa cap exemptions?

Certain employers that are not subject to the annual H-1B lottery and have the power to file H-1B petitions throughout the year are classified as H-1B cap-exempt employers.

The multiple categories of employers exempt from the H-1B cap, according to the Immigration and Nationality Act (INA), are:

• Institutions of higher educations awarding bachelor’s, master’s or doctor degrees. Some examples include Harvard University, University of Texas or a local community college offering accredited degree programs, according to business immigration firm Reddy Neumann Brown PC.
• Nonprofits tied to institutions of higher education. However, not all nonprofit organisations qualify. Eligibility depends on entities’ ability to prove they are tax-exempt under section 501(c)(3) of the Internal Revenue Code and their connection to higher education or research activities.
• Nonprofit organisations primarily conducting scientific or medical research. They need not be tied to a university.
• Governmental research organisations

As part of its larger crackdown on the H-1B program, the Trump administration also announced the expansion of a fee in August that petitioners with a high percentage of H-1B and L-1 employees must pay.

Homeland Security has also replaced the random H-1B lottery with a wage-weighted selection process, favouring the allocation of the ‘specialty occupations’ visa to higher-skilled and higher-paid professionals. On that same page, the Department of Labor has pushed to increase minimum required wages for the work visa classification and other such immigration categories.

Disclaimer: This article is intended for informational purposes only and is based on publicly available immigration guidance. Rules and deadlines are subject to change; readers should verify current requirements directly with USCIS or consult a qualified immigration attorney before making decisions based on this information. Financial Express is not responsible for any decisions made based on this information.