Trump Imposes $100,000 Annual Fee on H-1B Visas, Sparking Tech Industry Backlash

U.S. President Donald Trump signs an executive order at the White House in Washington, D.C. (REUTERS photo)

Washington, DC – President Donald Trump signed a proclamation on Friday imposing a $100,000 annual fee on H-1B visa applications, a significant escalation in his administration's efforts to curb what it describes as abuse of the program that allows U.S. companies to hire skilled foreign workers. The fee, payable by sponsoring employers for each visa holder, applies to new petitions and renewals, and takes effect at 12:01 a.m. EDT on September 21, 2025, for workers currently outside the U.S.This could add up to $600,000 in costs over the visa's maximum six-year duration, potentially reshaping a system critical to the tech sector but long criticized for displacing American workers.

Commerce Secretary Howard Lutnick, appearing alongside Trump in the Oval Office, framed the policy as a protection for U.S. talent. "If you're going to train someone, train an American," Lutnick stated. "No more will these big tech companies bring in foreign workers to replace U.S. talent. If you need a very sophisticated engineer, you can pay $100,000 a year for your H-1B visa." Trump echoed this sentiment, emphasizing productivity: "We're going to keep people in our country that are very productive, and these companies are going to pay a lot of money for that." The White House argues the program has been exploited to import lower-paid labor, citing instances where companies laid off U.S. workers after securing H-1B approvals.

The H-1B program, established in 1990, is capped at 85,000 new visas annually—65,000 for the general category and 20,000 reserved for those with advanced U.S. degrees—distributed via a lottery system. In fiscal year 2024, U.S. Citizenship and Immigration Services (USCIS) approved nearly 400,000 H-1B petitions, the majority of which were for extensions rather than new hires. About two-thirds of H-1B roles are in computer-related occupations, with additional use in engineering, education, and healthcare. India dominates the program, accounting for 71% of approvals (approximately 284,000), followed by China at 11.7% (around 46,800).

Current processing fees are far lower, starting at $460 for the base Form I-129 petition, with premium processing at $2,805 and additional costs like a $1,500 training fee for certain employers. The new $100,000 annual levy represents a dramatic increase, aimed at deterring entry-level hires while allowing access for top-tier talent.

Top beneficiaries of the program include tech giants and outsourcing firms. In 2024, Amazon led with 9,265 approvals, followed by Infosys at 8,140 and Tata Consultancy Services (TCS) at 5,274. Other major users include Cognizant Technology Solutions, Microsoft, and Meta Platforms, each securing thousands of visas annually.For fiscal year 2025, Amazon has already topped the list with over 12,000 approvals, while TCS holds the second spot with more than 5,000.

The announcement prompted immediate backlash from the tech industry, with shares of H-1B-reliant companies dropping sharply. Cognizant closed down nearly 5%, while U.S.-listed shares of Indian IT firms Infosys and Wipro fell 2-5%. Microsoft and Meta have urged their H-1B and H-4 (dependent) visa holders abroad to return to the U.S. by September 21 to avoid potential reentry issues. Indian IT companies, heavily dependent on the program, face the most severe impact, with experts predicting a shift of talent and operations to hubs like Bangalore.

Critics, including the American Immigration Council, argue the fee is legally questionable, as presidents lack authority to impose charges beyond standard processing costs. Supporters, however, view it as a victory for American workers, potentially reducing wage suppression in STEM fields.The policy aligns with broader Republican efforts to restrict legal immigration, including higher fees for asylum and work permits to fund border security.

The proclamation also introduces a "gold card" visa for high-net-worth individuals investing $1 million, aimed at generating revenue for immigration enforcement.Legal challenges are anticipated, with rejection rates for H-1B petitions already elevated during Trump's previous term. Whether this overhaul survives judicial review or accelerates a global talent exodus remains uncertain.