United States to Impose Annual Fee on H-1B Visas: Potential Impact on Technology Industry Costs and Operations

September 20, 2025

New H-1B Visa Fees Could Reshape US Tech Landscape

A new citizen waves a flag at a naturalization ceremony, as the US government contemplates changes to work visa programs. (Reuters)

Washington D.C. – The United States Government has announced plans to impose a considerable annual fee of $100,000 on companies seeking H-1B work visas. The proposed policy, revealed today, is expected to significantly affect the technology sector, which heavily relies on skilled foreign workers from countries like India and China. This move comes amid heightened enforcement of immigration laws and increased scrutiny of visa programs.

Crackdown on Immigration and Visa Reforms

According to reports from NBC News and Reuters,this action is part of a broader effort by the current administration to tighten immigration policies,including increased raids and deportations. While proponents claim the new fee structure will incentivize companies to prioritize American workers, critics fear it will stifle innovation and hinder economic growth. Some members of Congress have voiced strong support for the measure, while tech industry leaders are reportedly concerned.

The history of the H-1B Visa Programme

Established in 1990 by President George H.W. Bush, the H-1B visa program was designed to allow US employers to temporarily employ foreign workers in specialized occupations requiring theoretical or technical expertise. Over the decades, it has become a critical pathway for tech companies to fill skills gaps and access a global talent pool. These visas are generally issued for periods of three to six years.

impact on Major Tech Companies

data from the U.S. Nationality and Immigration Bureau indicates that several technology giants are major beneficiaries of the H-1B program. Amazon led the way in the first half of the current year with over 10,000 H-1B visa approvals. Microsoft and Meta followed, receiving more than 5,000 approvals each. The new $100,000 annual fee per visa could represent a substantial cost increase for these companies.

U.S. Commerce Secretary Howard Lutnick stated that the increased fee is intended to encourage investment in training American workers. “If you wont to train new people, you should train graduates from top universities in our country. Please train Americans and don’t introduce foreigners to grab our jobs,” he declared.

Industry Concerns and Economic Implications

Industry experts are raising concerns about the potential negative consequences of the new fee. Deedy Das, a partner at Menlo Ventures, cautioned that the increased costs will significantly diminish the attractiveness of the United States for top global talent.This diminished appeal, Das argued, could weaken the nation’s innovative capacity and economic prospects.

Smaller tech companies and startups may be disproportionately affected by the new costs. The increased financial burden could hinder their ability to compete for skilled workers and possibly slow down their growth trajectory.

H-1B Visa Statistics

Approximately two-thirds of H-1B visa holders work in computer-related occupations, however, the program also accommodates professionals in engineering, education, and medicine. Last year, India accounted for 71% of all approved H-1B visas, while China represented 11.7% of the total.

country	Percentage of H-1B Visas (2024)
India	71%
China	11.7%
Other	17.3%

Currently, employers seeking H-1B visas participate in a lottery system after submitting a small registration fee. Winning the lottery permits them to pay additional fees based on individual case specifics.

Did You Know? The H-1B visa program has a cap of 65,000 visas per year, with an additional 20,000 reserved for applicants holding advanced degrees.

Pro Tip: Companies should review their workforce planning strategies and explore potential alternatives to mitigate the impact of increased H-1B visa costs.

Understanding the Broader Context of US Immigration

The debate surrounding H-1B visas is part of a long-standing discussion about immigration policy in the United States.Historically, the US has attracted skilled workers from around the globe, contributing to its economic prosperity and innovation. However, concerns about job displacement and national security have led to increased restrictions on immigration in recent years. According to the National Foundation for American Policy, H-1B visas contribute significantly to US innovation, with H-1B workers being named inventors on numerous patents.

Frequently Asked Questions About H-1B visas

• What is an H-1B visa? an H-1B visa allows U.S. employers to temporarily employ foreign workers in specialized occupations.
• How many H-1B visas are available each year? There are 65,000 regular H-1B visas, plus 20,000 for those with advanced degrees.
• What impact will the new fee have on tech companies? The $100,000 annual fee is expected to significantly increase costs for companies relying on H-1B workers.
• Which countries benefit the most from the H-1B program? India and China are the primary beneficiaries of the H-1B visa program.
• What is the request process for an H-1B visa? The process involves a lottery system followed by the submission of fees and documentation.

What are your thoughts on the new H-1B visa fee? Do you believe it will ultimately benefit or hinder the US economy?

Share your opinion in the comments below and let’s discuss the future of skilled immigration!

What potential impact could the new H-1B fee have on the R&D budgets of tech companies?

The New H-1B Fee: Details and Timeline

As of late 2025, the United States is set to implement a new annual fee for H-1B visas, impacting companies reliant on skilled foreign workers. This advancement, driven by recent legislation aimed at bolstering domestic employment and funding worker retraining programs, introduces a significant cost increase for businesses sponsoring H-1B visa holders. The fee structure is tiered, based on company size, with larger organizations facing substantially higher charges.

* Small Employers (less than 25 employees): $200 per H-1B petition.

* Medium Employers (25-75 employees): $400 per H-1B petition.

* Large Employers (75+ employees): $800 per H-1B petition.

These fees are in addition to the existing H-1B petition filing costs, which already include the $460 filing fee and perhaps a $2,000 fraud Prevention and Detection Fee for certain employers. The new fees are expected to generate significant revenue,earmarked for the American Worker Retraining Program.

Impact on Technology Industry costs

the technology sector, a major consumer of H-1B visas, will bear the brunt of this new financial burden. Companies heavily dependent on specialized talent from abroad – notably in areas like software engineering, data science, and artificial intelligence – will see a direct increase in labor costs.

Here’s a breakdown of potential cost implications:

1. Increased Labor Expenses: The annual fee adds a predictable,recurring cost to each H-1B employee. For a company with 500 H-1B workers, the annual fee alone could amount to $400,000.
2. Budgetary Constraints: This added expense may force tech companies to re-evaluate budgets, potentially impacting R&D spending, expansion plans, or even hiring freezes in other areas.
3. Pricing Adjustments: Some companies may attempt to offset the increased costs by raising prices for their products or services, potentially impacting competitiveness.
4. Reduced Profit Margins: If price increases aren’t feasible, companies may have to absorb the costs, leading to reduced profit margins.

Operational Adjustments and Strategies

Tech companies are already exploring various strategies to mitigate the impact of the new H-1B fee. these include:

* Increased Automation: Investing in automation technologies to reduce reliance on human labor, particularly for repetitive tasks.

* Domestic Talent Pipeline Development: Expanding internal training programs and partnerships with universities to cultivate a stronger domestic talent pool. This includes focusing on STEM education initiatives.

* offshoring and Nearshoring: Shifting some operations to countries with lower labor costs. Though, this strategy comes with its own set of challenges, including interaction barriers and potential quality control issues.

* Optimizing H-1B Utilization: Carefully reviewing H-1B applications to ensure they are for truly specialized roles that cannot be filled by qualified U.S. workers. This requires meticulous documentation and justification.

* Exploring Choice Visa Options: Investigating other visa options, such as the L-1 visa for intra-company transfers, where applicable.

The Ripple Effect: Smaller tech Firms and Startups

While large tech corporations have the resources to absorb or adapt to the new fees, smaller tech firms and startups will likely face disproportionately greater challenges. The increased costs could hinder their ability to compete for talent, innovate, and scale their operations.

* Funding Challenges: Startups ofen operate on tight budgets. The H-1B fee could strain their financial resources, making it more tough to secure funding from investors.

* Talent Acquisition Difficulties: Smaller companies may struggle to attract and retain skilled foreign workers if they cannot match the compensation packages