$1,00,000 H-1B Fee Forces US Companies to Hire Only American Citizens!

In the wake of US President Donald Trump's executive order imposing a $100,000 fee on new H-1B visa applications, numerous American technology firms have begun restricting job postings to US citizens exclusively, reshaping hiring practices in a sector long reliant on international talent. The policy, enacted through a September 19 proclamation titled "Restriction on Entry of Certain Nonimmigrant Workers", took effect on September 21 and targets petitions for skilled foreign workers currently outside the United States. Aimed at curbing perceived abuses and prioritising American labour, the one-time fee—added to existing costs—has been criticised for its potential to deter innovation amid a persistent skills shortage. Indian professionals, who comprised 71% of H-1B approvals in fiscal year 2024, stand to bear the brunt, as the measure coincides with heightened scrutiny on outsourcing giants like Tata Consultancy Services and Infosys.

The H-1B programme, capped at 85,000 visas annually since 2004, enables employers to hire foreign experts in speciality occupations requiring at least a bachelor's degree, such as software development and engineering. Previously, base fees ranged from $460 to $2,805, making the new surcharge—a 50-fold increase in some cases—prohibitive for many. White House officials, including spokesperson Abigail Jackson, clarified that the fee applies solely to future applicants in the February 2026 lottery and spares current visa holders, including those on extensions or travel.

However, the abrupt change has sown confusion, prompting tech leaders like Amazon, Microsoft, and Meta—which secured over 20,000 H-1B approvals combined in early 2025—to advise employees against international travel. In Hyderabad, a hub for IT exports valued at $50 billion annually, recruiters report a surge in "US citizens only" listings for roles like project managers and UI/UX designers, once dominated by H-1B holders.

Industry insiders attribute the pivot to fiscal pressures, particularly on small and mid-sized enterprises lacking the buffers of multinationals. Rebeca Pardo, a hiring assistant at a San Francisco-based tech firm, told Deccan Chronicle, "Our budgets cannot handle a $100,000 fee for every new hire. Thus, we’re told to prioritise US citizens only." She emphasised the decision's economic roots, noting that while giants like Google might sponsor select candidates, smaller outfits face insolvency risks.

Rohith Reddy, a computer science graduate from Hyderabad working in Texas on Optional Practical Training (OPT), echoed the anxiety: "I’m currently working with a company on OPT, and I have another year left... They looked a bit hopeful about giving me an H-1B before, but after the order, they straight up said they can’t hire me after my OPT ends." With OPT limited to 12-36 months post-graduation, thousands of Indian STEM students now confront stalled career paths.

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Critics, including the American Immigration Council and labour unions, decry the fee as an unlawful executive overreach, arguing it usurps Congress's taxing authority and exacerbates a tech talent gap—H-1B holders contribute $86 billion yearly to the US economy through taxes and spending. A lawsuit filed October 3 in California's Northern District challenges the policy's legality under the Immigration and Nationality Act. Proponents, aligned with Trump's "America First" agenda, hail it as a safeguard against wage suppression, citing cases where firms like Cognisant laid off US workers while amassing H-1B approvals.

As the 12-month restriction looms until September 2026, the measure could accelerate offshoring to India and Canada, potentially ceding US leadership in AI and cybersecurity. For now, it underscores a protectionist turn, forcing global talent pools to recalibrate amid geopolitical flux.

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