Amid a weekend of confusion and anxiety for highly-skilled foreign workers, US Citizenship and Immigration Services issued a memo Sept. 20 clarifying a new executive order by President Donald Trump which would add a $100,000 fee for H-1B workers.
“There have been so many interpretations of the proclamation. It is poorly worded, and reeks of incompetence. They’re now trying to finesse it, but they’re doing it even more incompetently,” immigration attorney Cyrus Mehta told American Community Media in a Sept. 21 interview.
“I think this is going to dissuade a lot of companies from filing H-1Bs except for the very few. Universities and other nonprofits don’t have the ability to pay that $100,000. I just don’t see how organizations would have budgets for this,” he said.
Double Whammy for Rural Hospitals
Rural hospitals are already facing the weight of financial constraints from the “One Big Beautiful Bill,” which rolled out earlier this summer. They now face the double whammy of having to pay a $100,000 fee for each new H-1B doctor that serves at their site.
“It’s going to definitely impact rural areas, underserved areas, because that’s where foreign physicians play a great role. Their impact is really felt in the United States because they serve in these underserved areas,” said Mehta.
‘Human Tariffing’
Xiao Wang, CEO of Boundless Immigration, characterized the new rule as “human tariffing,” explaining in an interview with ACoM: “Historically, tariffs have been applied as companies import goods and services into a country. If India were to manufacture a tennis racket that then shipped to America, there’d be a tariff.”
“In this case, it’s the same thing, but for labor. If a foreign company is hiring someone and bringing them over to the U.S. or a U.S. company is hiring someone from a different country and bringing them into the country, this new fee for H-1Bs outside of the U.S. acts essentially like a tariff,” said Wang. He predicted there would be legal challenges and multiple iterations before the rule ultimately takes effect.
Who Does the Rule Apply to?
The new rule went into effect at midnight Sept. 21, creating panic in the foreign skilled labor force. H-1B workers who were outside the US feared they might have to pay $100,000 to re-enter the country. But USCIS clarified that the new rule applies only to petitions filed after Sept. 21. It does not apply to those with current H-1B status, including those who have renewed their H-1Bs.
Also, the rule only applies to those outside the US who are seeking a new H-1B visa; thus, foreign students who studied in the US and others hoping to adjust their statuses would not be impacted.
Those who already have valid H-1B visas are not prevented from traveling to and from the US. But several H-1B workers told ACoM that their companies’ attorneys have issued guidance memos advising no travel outside the US until at least a temporary injunction on the executive order is issued.
Others told ACoM they were pausing travel outside the US because of an overall fear of travel amid tenuous times for immigrants. One couple said they were considering employment opportunities outside the US or returning to India, which is rapidly growing a vibrant tech climate which encourages entrepreneurship.
Not an Annual Fee
At a press briefing Sept. 19, Commerce Secretary Howard Lutnick stated that President Donald Trump’s executive order would collect an annual $100,000 fee for each H-1B employee, largely tech and medical professionals from India and China. Some nurses from The Philippines also arrive on an H-1B visa, but the more common route is an EB-3 visa. Both categories of visas provide a route to a green card, and eventually US citizenship.
Over the weekend, the White House clarified Lutnick’s statements, noting that the new rule creates a “one time only” fee. Lutnick and Trump claimed Sept. 19 that large tech companies are on board with the executive order.
The H-1B program works on a lottery system: 85,000 new H-1B visas are allocated each year, with an additional 20,000 reserved for those who have studied for advanced degrees in the US. Currently, Cognizant and Tata Consultancy Services gobble up the lion’s share of H-1Bs, and then contract their workers out to other companies.
Cutting Competition
Wang explained that large tech companies would be in favor of such a program, because it lessens the competition in the lottery. “If you’re Meta or Google or Amazon, the reason why you would want a program like this is because many of the folks that you’re trying to hire are already in the US, because they’re graduating from advanced degree programs.”
“Last year, they had an 18% chance of being selected in the H-1B lottery. But if this rule passes and Cognizant files fewer H-1B applications, then your chance as Meta to be able to hire the researcher that you want to hire goes up because their chance of winning the lottery goes up.” Smaller companies would be shut out of the talent pool because they cannot afford the $100,000 fee, said Wang.
He urged H-1B workers to skill up, so that they could continue their status on another type of work visa, such as the O visa, which is given to individuals with extraordinary abilities in several disciplines.
“This is not just incompetence, but it’s incompetence laced with cruelty,” said Mehta. “There’s this human factor that was not taken into consideration. And it’s fueled by, unfortunately, racism in the MAGA community against Indians. And it has not been stopped by the leaders. It has been fueled, unfortunately.”
