The Trump administration has introduced a new proclamation that would impose a $100,000 fee on H-1B visa applications, a move that has sparked widespread debate and concern, particularly regarding its potential impact on startups and the U.S. tech industry. Ajay Bhutoria, a former advisor to ex-President Joe Biden, has weighed in on the issue, suggesting that while the fee could uplift U.S. citizens, senior IT workers, and new college graduates, it may also create hiring challenges for startups.

Details of the New H-1B Visa Fee

President Trump signed the proclamation introducing the $100,000 annual fee for H-1B visa applications. The proclamation also directs the Department of Labor (DOL) to raise prevailing wage levels. These measures represent a sweeping change to a visa program relied upon by U.S. employers to fill high-skilled roles in technology, engineering, and healthcare. The administration argues that the overhaul will protect U.S. workers, strengthen wage standards, and close loopholes in the H-1B process. White House staff secretary Will Scharf stated that the goal is to ensure that individuals entering the U.S. through the H-1B visa program are highly skilled and not easily replaceable by American workers.

Impact on Startups and Small Businesses

The increased fees could significantly impact startups and small businesses, potentially shifting focus back to American tech workers and protecting domestic employment. Ajay Bhutoria warned that the "staggering" H-1B fee could threaten the U.S. tech sector's global competitiveness. He noted that the H-1B program has been a lifeline for innovation, attracting top talent from around the world. Bhutoria suggested that a balanced approach with targeted exemptions is essential to keep the U.S. tech edge strong. Khanderao Kand from the Foundation of India and Indian Diaspora Studies (FIIDS) also stated the decision as an "unfortunate" one that can have a "very negative" impact on the U.S. tech industry.

Broader Economic Consequences

The changes have sparked concern among business groups, tech leaders, and immigration advocates, who warn that such a steep fee could effectively turn the H-1B into a “luxury work permit” accessible only to the wealthiest corporations and workers. Xiao Wang stated that the policy would sideline startups and smaller businesses, push skilled talent to other countries, and weaken the United States' standing as a global innovation leader. David J. Bier, an analyst at the Cato Institute, said Trump's new H-1B requirements could effectively undercut the value of hiring these workers and persuade companies to move their operations outside the U.S.

Impact on Foreign Workers

For international professionals, especially in STEM fields, the new $100,000 fee could make the H-1B visa inaccessible. Early-career workers, recent graduates, and those from industries with lower salaries may see U.S. work opportunities vanish, as employers may reserve H-1Bs for only the most critical or senior roles. Indian professionals form the majority of H-1B visa recipients, especially in sectors like tech, consulting, healthcare, research, and administrative services. While high-skilled workers with specialized expertise may still secure employment, those in junior or entry-level positions may face reduced opportunities due to the higher sponsorship cost.

Criticism and Legal Challenges

The new $100,000 fee for H-1B visas flouts clear requirements of federal immigration law and will invite immediate lawsuits, attorneys said. Raja Krishnamoorthi said it will cut America off from skilled workers. David J. Bier, an analyst at the libertarian Cato Institute, said that under federal law, only Congress has the power to create new visa entry programs and add fees to existing categories.

Other Changes to the H-1B Visa Program

Senator Jim Banks introduced the American Tech Workforce Act, which aims to restructure the H-1B visa system, drastically raising wage requirements and limiting alternatives companies use to hire foreign workers. The proposal would increase the wage floor for H-1B visa recipients from $60,000 to $150,000, eliminate the Optional Practical Training (OPT) program, and replace the current lottery-based selection process with a highest-bidder system.