$100,000 H-1B fee leaves US companies staring at $14 billion annual cost

US employers could face an annual cost of $14billion for hiring foreign professionals after President Donald Trump introduced a $100,000 application fee for new H-1B visas, according to a report by the Financial Times. The order, signed late on Friday, will apply only to new applications starting with the February lottery, not to existing visa holders, the White House clarified.

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Tech and specialist industries hit hardest
The administration said the measure was aimed at pushing companies to hire American workers. More than 141,000 new H-1B visas were issued last year, according to US Citizenship and Immigration Services. If the same volume continues, the new fee could translate into $14bn in annual costs for companies.

The H-1B visa is widely used by the technology sector as well as industries such as healthcare and accountancy. USCIS data shows nearly two-thirds of recipients in 2023 were from the IT sector. About 400,000 approvals were granted last year, most of them renewals.

Business leaders voiced concern that the change could hurt US competitiveness. Garry Tan, chief executive of start-up incubator Y Combinator, wrote on X that the decision “kneecaps start-ups” and is a “massive gift to every overseas tech hub” such as Vancouver and Toronto. He added: “In the middle of an AI arms race, we’re telling builders to build elsewhere. We need American Little Tech to win — not $100K toll booths.”

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Legal challenges and policy changes ahead
Lawyers said they expect challenges in court. “The executive branch has the authority to impose a fee to recoup money to administer the H-1B scheme,” Matthew Dunn, partner at Herbert Smith Freehills Kramer, told FT. “To add on $100,000 is totally outside their regulatory power. We think it’s very likely that we will see a court intervention blocking this proclamation.”

Trump’s proclamation also pointed to broader revisions, including lifting the salary benchmark for visa approval. Some Republican lawmakers want the visas allocated by ranked salaries instead of the current lottery.

Companies are assessing other visa options, including the L-1 route for managers and employees with specialised knowledge, though it requires at least one year of overseas service.

Gary Cohn, vice-chair at IBM and former White House economic adviser, defended the decision, telling CBS that the fee would ensure visas are reserved for “a highly skilled person who you need, who you cannot hire in the US.”

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