Cure worse than H-1B 'malaise'

The Trump regime is making the H-1B programme pathway more expensive, more selective, and more precarious - one policy measure at a time.

The $1 lakh fee for new H-1B workers was the dramatic opening salvo. Announced in September 2025, the levy was justified to curb abuse of the programme and protect US workers. As it turned out, most employers were reluctant to pay this fee, paving the pathway for alternate approaches, like sponsoring students undergoing optional practical training (OPT) for a H-1B visa, or poaching existing H-1B employees.

By late February, the Trump regime told a federal court that only about 70 employers had paid the $1 lakh charge. This fee has since been struck down by a federal district court and the first circuit (appeals court) declined to stay that ruling in July. But it has yet to decide merits of the government's appeal. The regime is widely expected to continue fighting the case, and it could even reach the Supreme Court.


Perhaps seeing the shift towards sponsoring of newly minted international students who were undergoing OPT, some sections of the US media reported recently that the Trump regime is planning a similar fee for OPT hires!

A wage-weighted selection system has replaced the old random lottery with a process that gives higher-paid applicants a better chance of selection. It was implemented for the first time in the selection process held this spring.

Recently, another salvo was fired. From September 9, an additional $4,000 H-1B fee - currently applicable to large H-1B-dependent employers only on initial hiring - will also apply to qualifying H-1B extension applications. The annual H-1B cap of 85,000 for initial visas means that H-1B extension applications are much higher in number, touching 2.9 lakh in FY2025. With a maximum tenure of just 3 yrs, this fee is now a periodical cost for hiring H-1B workers for the large companies.

And there is more in the pipeline. US Department of Labour has proposed substantially higher prevailing-wage levels for H-1B holders. Proposed changes would raise wage floors at different levels of wage distribution, with the biggest proportional impact at lower levels. Under US immigration law, employers hiring H-1B workers are required to pay either the prevailing wage, or the actual wage paid to similarly qualified US workers, whichever is higher.

National Foundation for American Policy states that, on average, H-1B visa holders are paid more than comparable US workers. Congress never intended employers to pay a wage premium for hiring foreign nationals beyond market salaries. When a much higher wage floor is added to a $1 lakh hiring charge, a wage-weighted lottery, and rising compliance costs, the cumulative effect matters.

That risk could soon extend beyond money. There is a proposal to eliminate the 60-day grace period that allows an H-1B worker who loses a job to remain in the US while seeking another employer or changing status. Removing the grace period transforms a layoff into an immigration emergency.

The US has spent decades building an extraordinary global talent magnet. International students came to its universities, graduates entered US companies, skilled workers moved through the H-1B system, and several became entrepreneurs and employers themselves. That ecosystem worked partly because the US offered something more than a salary - it offered a   pathway.

Today, that pathway is becoming more expensive for employers, and more precarious for H-1B visa-holders. Many US companies have already implemented alternatives. Nearly 61% of the 519 mobility professionals surveyed by Envoy Global in its recent 'US Corporate Immigration Trends' report said they had moved staff outside the US owing to visa barriers, a sharp rise from 48% in 2025. Another 68% were expecting to turn to nearshoring or offshoring in 2026 to manage immigration barriers and labour shortages.

The larger question for Washington, therefore, is not whether the H-1B programme has abuses. It is whether the 'cure' is causing more harm than good.