When President Donald Trump signed an executive order on Sept. 19 imposing a $100,000 fee on H-1B visa applications, a program that allows skilled foreign workers to come to the U.S. With this happening, Abhishek Singh immediately began worrying about the possibility of having to relocate.
Singh, a software engineering manager in the Seattle area, realized that his employer, a U.S.-based startup would be unable to cover the hefty new fee on top of his current salary.
Having spent a decade working in the U.S., including the past seven on an H-1B visa, Singh felt a brief relief when the White House clarified on Saturday that the new $100,000 fee would, for the time being, apply only to future applicants.
Singh’s concerns highlight the broader implications of the policy change, which could place substantial new burdens on businesses, particularly startups and, some experts warn, potentially hamper innovation and economic growth.
Although roughly 30 employers, mostly major tech firms account for an estimated 40 percent of newly issued H-1B visas, Trump’s executive order is likely to affect more than just the giants. Startups and smaller companies across various industries also rely on H-1B workers, and a six-figure fee per applicant could prove financially devastating for them.
“If you’re a startup with new technology, and you’ve got some venture capital money but you’re worried about burning through it too quickly, this could kill you,” quoted by BBC, saying John Skrentny, a professor at the University of California, San Diego who studies STEM workforce development.
“What the Trump administration’s plan doesn’t seem to acknowledge is that not every company can spend $100,000 on a visa,” he added.
The impact extends beyond tech, with sectors like education and healthcare, both of which hire skilled foreign workers through the H-1B program also facing uncertainty over what the new fee might mean for their operations.
“There’s no way that we can afford $100,000,” said Karen Brady, the chief executive at Ryther, a behavioral health nonprofit based in Seattle. “In terms of future hiring, we won’t be doing any more H-1B visas.”
The behavioral health sector has faced a staffing shortage, intensified by rising demand since the pandemic, according to Brady. She noted that hiring workers through the H-1B program has been instrumental in helping to alleviate the crisis.
Ryther, a Seattle-based organization, currently has two of its 45 therapists on H-1B visas, both from China, Brady said. She added that without these staff members, the organization would lack employees with the linguistic and cultural expertise needed to connect effectively with families from similar backgrounds.
“They match some of our clients in a way that American workers don’t,” she said. “I can’t replace that.”
In a research note, Atakan Bakiskan, an economist at investment bank Berenberg, cut his U.S. growth forecast from 2% at the start of the year to 1.5%, saying the $100,000 H-1B fee is part of the Trump administration’s broader “anti-growth policymaking.”
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“With the new H-1B policy, the labor force is more likely to shrink than expand going forward,” he said. “The brain drain will weigh heavily on productivity.”
While in his executive order, Trump defended the new fee by citing “abuse” of the H-1B program, referencing long-standing concerns across the political spectrum that some companies have used it to hire foreign workers at lower wages.
Dan Wang, a professor at Columbia Business School who studies global migration and entrepreneurship, noted that policies making it harder for companies to hire skilled workers often push firms to offshore operations rather than employ U.S. workers at comparable skill levels.
“These policies really don’t have the intended effect of balancing the labor market competitiveness of American workers,” Prof. Wang said. “There’s not a trace of data that suggests that American workers would benefit from this.”
Elise Fialkowski, co-chair of the corporate immigration practice at Klasko Immigration Law Partners, which advises both startups and large companies, said that since last week, some of her bigger corporate clients who have subsidiaries or branch offices abroad have begun considering hiring talent in countries like Canada, the UK, and elsewhere instead. According to her, the Trump executive order “almost begs companies to offshore work.”
Despite the temporary reprieve, Singh said he is still weighing the possibility of leaving his startup if he can secure a job in India or other countries such as Canada, Japan, or South Korea, citing concerns that the administration may continue tightening policies against immigrants. “There’s uncertainty now that anything can happen in the future,” Singh, as quoted by BBC. “If we are forced out, then that’s the only option we’re left with.”