Reasons why Trump imposed $1,00,000 fee on H-1B visa
The US president argued that imposing a steep fee on companies is necessary to curb systemic abuse, while still allowing access to highly skilled global talent
In a sweeping move set to impact scores of people, including Indians, US President Donald Trump today (20 September) signed a new proclamation that restricts the entry of certain non-immigrant workers and imposes a $1,00,000 annual fee on H-1B visas.
H-1B visas allow companies to sponsor foreign workers with specialised skills – such as scientists, engineers, and computer programmers – to work in the US, initially for three years, but extendable to six years.
The new rule, which comes into effect tomorrow (21 September), will significantly impact companies hiring foreign workers, including those from India.
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The severe harms that the large-scale abuse of this program has inflicted on our economic and national security demands an immediate response. I therefore find that the unrestricted entry into the United States of certain foreign workers who are described in section 1 of this proclamation would be detrimental to the interests of the United States because such entry would harm American workers, including by undercutting their wages
The United States awards 85,000 H-1B visas per year on a lottery system, with India accounting for around three-quarters of the recipients.
What Trump said
Titled "Restriction on Entry of Certain Nonimmigrant Workers," the proclamation mandates that H-1B petitions must be accompanied by the $1,00,000 payment to be considered valid.
Petitions not meeting this requirement will be denied, and workers associated with the sponsor companies will be barred from entering the US.
Referring to non-immigrant workers as "aliens", a section of the proclamation also lists an exception to the new H-1B visa restrictions and $1,00,000 fee requirement.
It allows the secretary of Homeland Security to exempt certain individuals, companies, or entire industries from the rule if it is determined to be in the national interest and does not pose a threat to US security or welfare.
"The H-1B nonimmigrant visa program was created to bring temporary workers into the United States to perform additive, high-skilled functions, but it has been deliberately exploited to replace, rather than supplement, American workers with lower-paid, lower-skilled labour [sic]," Trump said in the proclamation.
Trump described the misuse of the H-1B system as a "national security threat", citing investigations by law enforcement into outsourcing firms heavily reliant on the programme.
"The abuse of the H-1B program is also a national security threat. Domestic law enforcement agencies have identified and investigated H-1B-reliant outsourcing companies for engaging in visa fraud, conspiracy to launder money... and other illicit activities to encourage foreign workers to come to the United States [sic]," Trump said.
The US president argued that imposing a steep fee on companies is necessary to curb systemic abuse, while still allowing access to highly skilled global talent.
"The severe harms that the large-scale abuse of this program has inflicted on our economic and national security demands an immediate response. I therefore find that the unrestricted entry into the United States of certain foreign workers who are described in section 1 of this proclamation would be detrimental to the interests of the United States because such entry would harm American workers, including by undercutting their wages," the proclamation read.
Both the Department of Homeland Security and the Department of State have been tasked with coordinating and implementing the proclamation, ensuring denial of entry to any H-1B non-immigrant "aliens" whose employer has not made the required payment.
The restrictions will apply only to foreign workers attempting to enter the US after 21 September 2025.
Trump said in the proclamation that the widespread replacement of American workers has weakened the nation's economy and job market.
"Some employers, using practices now widely adopted by entire sectors, have abused the H-1B statute and its regulations to artificially suppress wages, resulting in a disadvantageous labor market for American citizens, while at the same time making it more difficult to attract and retain the highest skilled subset of temporary workers, with the largest impact seen in critical science, technology, engineering, and math (STEM) fields," the proclamation read.
High unemployment rates among US graduates
According to the document shared on the White House website, the share of IT workers among H-1B visa holders surged from 32% in FY2003 to over 65% on average in the past five fiscal years, with outsourcing companies now dominating as top users of the visa programme.
The document also mentioned high unemployment rates among US computer science and engineering graduates, and noted that some American tech companies have laid off skilled local workers while bringing in thousands of H-1B workers.
Citing an example, the proclamation stated that a software company, which was approved for over 5,000 H-1B visas in FY2025, also announced layoffs of more than 15,000 employees during the same period.
The document mentioned that some American IT workers were forced to train their foreign replacements and sign nondisclosure agreements to receive severance packages.
The proclamation described this as an "indignity" and backed the Trump administration's argument that reforms are urgently needed to protect US workers.
