President Donald Trump’s decision to raise the application fees for companies employing US companies on an H-1B visa will likely instead encourage many foreign skilled workers to seek jobs in other countries.
Slow slope The increased cost per application is designed to encourage US companies to support US workers over skilled foreign workers. But that is especially a blow to the big tech companies. Because they rely heavily on skilled workers from overseas.
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The H-1B visa was introduced in 1990 under President George HW Bush. Today, high-tech workers in India make up the majority of recipients of H-1B visas. Last year, they received 71% of the approved H-1B visas, and since then, Chinese citizens ranked second in 11.7%.
Trump’s move could lead to weaker economic growth in the US, experts warn. It could also lead to a short-term “brain drain” as skilled university graduates are forced to leave the United States in the favour of other countries.
What has the Trump administration announced in relation to the H-1B visa?
In an order signed by Trump on September 19, his administration announced that US companies will need to pay $100,000 per $100,000 per H-1B from 12:10am (04:01 GMT) on September 21.
Previously, it used to range between $2,000 and $5,000, depending on the size of the company applying for a visa. Initially granted for up to three years, the H-1B visa allows US companies to hire foreign workers with specialized skills. You can extend it for up to six years, but when you extend your visa, you will need to pay the application fee again.
The H-1B program promotes 65,000 visas per year for employers bringing temporary foreign workers into their specialties, especially for advanced degrees workers, for workers with a high degree.
“The fee is a one-off fee for filing a new H-1B petition,” the White House said Sunday. The rules added that they do not apply to people who already hold an H-1B visa or who have submitted their applications by September 21st.
The Department of Homeland Security will also prioritize highly paid applicants for the H-1B lottery over those with lower incomes. The Trump administration said it is also considering other changes to its H-1B visa.
Critics have long argued for confiscating work done to Americans as H-1Bs are misused by businesses that employ workers at the wages they have to pay US employees.
The Indian government said on Saturday it was examining the “complete meaning” of the new rules. India’s Foreign Ministry also said, “The measure is likely to have humanitarian consequences from the disruption caused by the families.”
Which industries are most affected?
Approximately two-thirds of existing H-1B jobs play a technology-related role. According to the US Citizen Immigration Services, Amazon, Google, Meta, Microsoft and Apple were among the companies that hired the most H-1B visa holders last year.
As a result, Trump’s new fees have sent shockwaves into the tech industry. For example, Microsoft told employees that current visa holders should remain in the US “for a foreseeable future.”
Many high-tech industry leaders, including Alphabet’s CEO Sundar Pichai, Microsoft CEO Satya Nadella, Tesla and SpaceX Head Elon Musk, were H-1B Visa holders.
In 2024, Musk wrote on his X platform: “The reason I’m in America is because of the H-1B, along with SpaceX, Tesla and so many important people who built hundreds of other companies that made America stronger.”
How will other countries benefit from this?
Many countries are trying to strengthen their expertise in technology and STEM-related industries, and may be waiting to hit foreign experts who are no longer able to get jobs in the US as the costs of H1-B visas have risen.
England
In response to the rise in H-1B visa prices, UK Prime Minister Kiel Starmer is believed to be exploring a proposal to abolish visa fees for skilled foreign workers, the Financial Times reported Monday, citing people who described the debate within the Ministry of Finance.
Starmer’s Global Talent Task Force is working on ideas to seduce top global scientists in the UK, including academics and digital experts, as they seek to stimulate economic growth. One option to consider is to eliminate all visa fees from top-level experts.
China
Beijing will launch a new K Visa at STEM on October 1st, with the aim of attracting skilled workers.
K Visa allows successful applicants to study and work in China without first receiving a job or research position.
China’s Foreign Ministry declined to comment on the changes in the US over the weekend, but said the country “welcomes” the finest talents around the world.
South Korea
On Monday, President’s Chief of Staff Kang Hoon Sik said he instead instructed the ministries to find ways to misuse US visa changes to attract scientists and engineers from overseas to South Korea.
Kang did not give further details on what measures to take, but said the government will focus on initiatives on artificial intelligence (AI) and other sectors designed to promote a technology-driven economy next year.
Canada
On September 15th, Canada lowered its cutoff score for its comprehensive ranking system. This has now regulated permanent residency applications from skilled workers and allowed more candidates to be invited.
Canada was also able to consider reintroducing its 2023 visa program. This allowed people who already used the H-1B visa to move to Canada with more favorable conditions for up to three years. The scheme was closed in July this year after reaching the state cap of 10,000 applicants.
