$100K H-1B Fee Risks Pushing Jobs and Innovation Overseas

Companies in the United States that rely on foreign talent to fill high-skill positions could face new hurdles due to recent changes in the US H-1B visa program. The changes, announced by the Trump Administration and the US Department of Labor in September 2025, are expected to significantly increase the costs associated with acquiring visas and subject companies that use these visas to new levels of compliance scrutiny.

The US government’s new visa initiatives are focused on protecting US workers, but experts are anxious that they could have the unintended consequence of driving innovation overseas by barring US companies from accessing key talent. Although the ultimate impact of the new changes remains to be seen, with legal challenges to those changes starting to surface, now is the time for US companies to consider the impact they could have and the best way to respond.

The goal of the new H-1B visa initiatives 

In a “proclamation” issued by the White House on September 19, 2025, President Trump stated that the H-1B nonimmigrant visa program is being abused by US companies in a way that undermines US economic and national security. The proclamation says the program, which was designed to “bring temporary workers into the United States to perform additive, high-skilled functions,” is being exploited. The result, President Trump says, is “large-scale replacement of American workers through systemic abuse of the program.”

The proclamation identifies US information technology firms as being among the hardest hit by the abuses of the visa program. It says the systemic abuse of the program has incentivized artificially low labor costs in the IT industry, which has empowered companies to “close their IT divisions, fire their American staff, and outsource IT jobs to lower-paid foreign workers.”

To discourage the exploitation of the program, the proclamation puts in place a new fee structure for H-1B visa applications. Previously, US companies could expect to pay between $2,000 and $5,000 per application, with the understanding that the application could be denied for a variety of reasons. Under the terms of the new proclamation, the fee has been increased to $100,000.

The new fee structure will be in effect for 12 months following its effective date of September 21, 2025. It lists only one exemption from the new fees, which applies to “any individual alien, all aliens working for a company, or all aliens working in an industry, if the Secretary of Homeland Security determines, in the Secretary’s discretion, that the hiring of such aliens to be employed as H-1B specialty occupation workers is in the national interest and does not pose a threat to the security or welfare of the United States.”

The US Department of Labor announced on the same day the proclamation was issued that it was launching Project Firewall as part of an initiative to “protect America’s highly skilled workforce.” The department said the project will focus on maximizing H-1B visa compliance through secretary-certified investigations, adding that this is the first time such investigations have been carried out in the department’s history.

The concerns emerging in the business world 

Within days of the H-1B proclamation, media outlets began warning of the negative effects its provisions could have on US business. The main concern is that the elevated fees would make it impossible for US companies to recruit foreign talent, opening doors for foreign workers to take their skills elsewhere.

A Forbes report called the elevated visa fees “a gift to European AI startups,” arguing that non-US startup hubs like London and Paris, which have grown accustomed to “steady streams of young talent shipping off” to Silicon Valley, could greatly benefit from the shift. Forbes also noted that the new challenges facing US companies coincide with a particularly intense talent war in AI.

A CNBC report suggested that workers locked out of the US by the new visa rules could find employment in Europe, where a better work-life balance is seen as a key draw. The report quoted an executive from a European venture capital firm who said the changes were a “unique opportunity” that European companies “shouldn’t let slip.”

The measures US companies should be considering 

Early reports say some tech giants, including Nvidia, will continue to apply for the visas despite the elevated costs. Smaller companies, however, will be hard-pressed to absorb the fees, especially since filing an application doesn’t guarantee that the visa will be issued.

That leaves smaller US companies, along with others who aren’t willing to pay the new fees, with a talent pool composed primarily of US workers. Companies that turn to that pool will find US workers in higher demand and most likely expecting higher pay, which is the outcome the new policies are seeking.

As the talent market shifts, companies will be wise to take steps to hold onto the foreign workers they currently have access to under H-1B visas. The new rules impose the $100,000 fees only on new visa applications, which means renewals or transfers don’t carry the heavy costs. Consequently, the shift could trigger a season in which companies focus their hiring efforts on recruiting foreign talent away from competitors rather than recruiting new talent from other countries.

To avoid losing talent, companies should ensure they are creating a culture and environment that attracts and retains employees. Skilled talent, including both H-1B visa holders and US workers, is more likely to remain with their current company if they receive fair compensation, attractive benefits, and value the company’s culture.

The changes to the US visa program come at a time when US companies are locked in a fierce battle for tech talent. To date, companies have shown they are willing to spend well to secure talent. Whether the new $100,000 fee will cause them to pivot away from foreign talent remains to be seen. What is clear, however, is that companies in countries that don’t face similar recruiting hurdles are ready to welcome foreign talent that is turned away from US shores.

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Written by Pedro David Espinoza.