Commerce Secretary Howard Lutnick has asserted that large U. S. tech firms are aware of and on board with the fee, framing the move as necessary to curb what the administration says are abuses in the H-1B system. He emphasised prioritising U. S. graduates for roles and argued that the high cost will force employers to reconsider whether hiring foreign workers over domestic ones is justifiable.
The fee is expected to sharply reduce the number of H-1B petitions filed and approved. Currently, the H-1B programme allows for 65,000 visas annually for specialty occupations and another 20,000 for those with advanced degrees. Many petitions are filed by outsourcing firms and small to midsize tech companies, which observers believe will be hit hardest by the new cost.
Tech industry leaders and immigration law experts warn the fee could prompt talent to seek more welcoming countries and could slow U. S. competitiveness in critical sectors such as artificial intelligence, engineering and research. Elon Musk, among others, has been cited as saying the changes risk depriving “America’s ability to innovate and grow” if the pool of skilled workers shrinks.
Legal challenges are anticipated. Critics argue that the executive branch lacks authority to levy such high fees unilaterally, saying Congress has only granted power to recover the cost of processing visa applications—not to impose steep access charges. The proclamation includes a 12-month expiry unless extended and allows exemptions for aliens whose hiring is deemed in the U. S. national interest or who work in industries where the Secretary of Homeland Security determines the restriction harms welfare or security.
Major corporations are adapting immediately. JPMorgan Chase has advised its H-1B visa-holding employees currently overseas to return to the U. S. before the deadline, while those already in the country are being told to avoid international travel until clarity emerges.
With India accounting for about 71% of approved H-1B beneficiaries and China around 11.7%, the fee increase is likely to impact workers from these countries most severely.
Prevailing wage levels for H-1B workers are also slated for review under the new measure. The Department of Labor will initiate rulemaking to raise wages in order to align them more closely with U. S. standards.