American president, Donald Trump, has signed a new proclamation that demands a $100,000 payment to accompany or supplement H 1B petitions for new applications. This new rule has been passed by Trump to “curb abuses that displace US workers and undermine national security.” The new rule has spread panic amongst immigrant workers who are currently in US as the mandate initially did not mention if the H1B visa hike was an annual fee or a one time fee. However, the White House has now issued a statement to address the doubts surrounding the H1B visa hike.
Also read: Donald Trump Charges 26% Reciprocal Tariff on India: What are Reciprocal Tariffs?
Who the H1B Visa Hike Will Impact
Karoline Leavitt, assistant to the president has stated that Donald Trump means to restrict the entry of certain alien non-immigrant workers through this rule. Here are some of the pointers issued to clear the doubts around the rule:
- This is not an annual fee but a one-time fee that applies only to the petition.
- Those who already hold H 1B visas and are currently outside of the United States right now will not be charged $100,000 to re-enter.
- H-1B visa holders can leave and re-enter the country to the same extent as they normally would; whatever ability they have to do that is not impacted by the new proclamation.
- This applies only to new visas, not renewals, and not current visa holders.
- The rule would be enforced in the upcoming H 1B lottery cycle.
Also Read: The Impact of US Tariffs on the Logistics Industry
How the New Rule is Expected to Impact Foreign Workers
Considering the huge $100,000 fee, H1B visa hike is expected to dissuade companies from hiring foreign workers. “American workers are being replaced with lower-paid foreign labor, creating an economic and national security threat to the nation,” says a statement from the White House while adding that the share of IT workers with H-1B visas has risen from 32% in FY 2003 to over 65% in recent years.
“Unemployment among recent computer science graduates has reached 6.1% and 7.5% for computer engineering graduates — more than double the rates for biology or art history majors. The number of foreign STEM workers in the United States has more than doubled between 2000 and 2019, while overall STEM employment only increased 44.5% during that time,” adds the statement.
As a result American companies have been laying off their American technology workers and seemingly replacing them with H 1B workers. The White House has also issued a fact check to explain its decision making:
- One firm secured 5,189 H-1B approvals for FY 2025 while cutting about 16,000 U.S. jobs this year.
- Another got 1,698 H-1B approvals but laid off 2,400 workers in Oregon in July.
- A third has eliminated 27,000 U.S. roles since 2022 even as it gained 25,075 H-1B approvals.
- Yet another cut 1,000 American jobs in February while receiving 1,137 H-1B slots for FY 2025.
“The Trump Administration issued new guidance to ensure illegal aliens are not allowed access to federal workforce development resources and related grants, protecting job trainings for American workers,” added the White House.
Impact of This Rule on Companies
CP Gurnani, Co-Founder and Vice Chairman, AIonOS (JV between InterGlobe Enterprises & Assago Ventures) has stated that the impact of this new rule on their business would be negligible: “Over the past several years, Indian IT firms have significantly reduced their reliance on the H-1B visa, with filings dropping by over 50%. This shift is a result of our ongoing strategy to hire more locally, invest in automation, and enhance our global delivery models. While visa fees may change, the impact on our business will be minimal, as we’ve already adapted to this evolving landscape.”
