The $100K H-1B visa fee: How this White House order will reshape US tech hiring and drive major industry shifts
While tech companies relying on foreign techies in the US will have to reset their labour cost calculus and Indian IT service majors will be hit, let’s accept that this US talent visa programme had got warped out of shape and reform was inevitable.
In a sweeping policy shift, the White House has announced a new directive that imposes a $100,000 fee on every new H-1B visa petition filed for foreign workers outside the US.
Effective 21 September 2025, this measure will likely cause tectonic shifts across the technology sector, which has long relied on the H-1B programme to bridge gaps in skilled labour—especially in fields like software engineering, data science and artificial intelligence (AI).
This rule could reshape talent acquisition, workforce planning and even long-term business models for both Indian and US tech majors.
The H-1B visa programme, designed to let US employers hire foreign nationals in specialty occupations, has long been debated. Critics argue that it enables wage suppression and the displacement of domestic workers. At the same time, proponents maintain it fills essential gaps in the labour market that US educational institutions cannot meet quickly enough.
The new proclamation, titled ‘Restriction on Entry of Certain Nonimmigrant Workers,’ leans firmly in favour of the former argument, citing a range of statistics to justify it (shorturl.at/Otstz)
According to the White House, from 2003 to 2019, foreign STEM workers in the US grew from about 1.2 million to 2.5 million, while overall STEM employment in the US grew at less than half that pace. The administration also points out that over 65% of all H-1B petitions in the past five fiscal years have gone to IT workers, compared to just 32% in 2003.
A significant proportion of these visas have been used by outsourcing and consulting firms, many of which leverage the programme to place junior or mid-level employees at client sites in the US, often at lower cost than hiring local workers.
Wage suppression, according to the US administration, is not hypothetical. The announcement references studies indicating that entry-level H-1B workers may be paid up to 36% less than their US counterparts. Additionally, unemployment rates among recent domestic graduates in computer science and engineering reportedly hover around 6–7%, double that of other graduates in subjects such as art history and biology.
The implication is clear: the H-1B programme, while originally designed to bring in high-skilled talent for roles that cannot be filled locally, is being used as a cost-cutting tool, particularly by large technology firms.
The response from the tech sector has been swift, though measured. Large US firms such as Microsoft and Google will absorb the new costs for specific roles, particularly in AI, cloud infrastructure and other high-value verticals where talent is scarce and highly specialized. But even these companies are likely to become more selective in using the H-1B route, focusing only on positions that cannot be filled domestically and that clearly justify the additional financial burden.
Startups and mid-sized firms, however, may face a more difficult adjustment. The $100,000 fee per worker places a prohibitive price tag on what was once a cost-effective way to secure much-needed engineering talent.
These firms may now be forced to rely more heavily on domestic hiring, which may either slow product development, increase wage pressure or both. In some cases, they may relocate engineering functions to other countries entirely, accelerating America’s offshoring trend.
For Indian IT outsourcing firms, the impact is potentially seismic. Companies like Infosys, TCS and Cognizant depend on moving employees between India and the US, particularly on H-1B and L-1 visas, to service long-term contracts with American clients.
The new fees will make it far more expensive to staff US projects with on-site personnel. As a result, these firms are likely to double down on offshore delivery models, doing more work in India or other low-cost geographies. While some of the cost may be passed on to clients, intense price competition in outsourcing means margins will likely suffer.
The White House proclamation provides exemptions in cases deemed to be in the national interest and further rules are expected to clarify which roles or industries might qualify. But until those guidelines are published, uncertainty will prevail.
Legal challenges are almost inevitable, with opponents likely to argue that the executive branch does not have unilateral authority to impose such fees without Congressional approval. Until the dust settles, immigration attorneys and HR departments alike will be navigating a maze of risk assessments, compliance procedures and potential policy reversals.
Despite the expected disruption, there is an argument to be made that some form of reform was overdue. For years, the H-1B programme has operated on a lottery system that treats all applications alike, regardless of skill level or salary. This has let the system be flooded with bulk applications for entry-level positions, effectively crowding out applications for truly exceptional candidates.
By attaching a significant cost to each petition, the new policy aims to discourage speculative or low-cost hiring, pushing employers to reserve the visa for only those roles where the value added justifies the price.
There are broader implications as well. US universities may see a decline in enrolment from international students, many of whom choose American schools for the career pathways offered by the H-1B programme. Over time, this could reduce revenue for STEM departments and shrink the pipeline of future researchers and technologists. At the same time, countries like Canada, Germany and Australia that offer more predictable post-study work options may benefit from a shift in global talent flows.
Whether this policy ultimately achieves its goals will depend on implementation. If exemptions are handled transparently and reserved for genuinely high-skilled roles, the H-1B programme may emerge leaner and better aligned with its original mission. However, if exemptions become politicized or the legal and administrative hurdles prove insurmountable, the policy may stifle innovation and damage America’s reputation as the premier destination for global talent.
The numbers cited by the administration—on wage differentials, foreign workforce growth and domestic STEM underemployment—paint a picture of a system in need of recalibration. Whether this recalibration had to take the form of a sudden $100,000 via price hike can be debated. But the message is unambiguous: the era of low-cost, high-volume foreign tech labour in the US is over.
The author is co-founder of Siana Capital, a venture fund manager.
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