How Trump’s $100,000 H-1B Fee Could Reshape America’s Labor Market

On Sept. 19, 2025, the Trump administration unveiled a plan to slap an annual $100,000 charge on each H-1B visa—a jarring, order-of-magnitude jump from today’s modest registration and petition fees. Whether enacted by proclamation, regulation, or not at all after court challenges, the mere proposal forces a big question: what happens to America’s talent engine if you price skilled visas like luxury goods?

The Announcement, The Ambiguity, And The Stakes

Multiple major outlets reported that the administration announced (and, according to some reports, signed) a policy to impose a $100,000 annual fee on H-1B visas, framing it as a way to deter reliance on foreign talent and steer employers toward training U.S. workers. Details remain fluid—some coverage described a proclamation, others an announced plan—with legal experts immediately questioning whether a fee so far beyond cost recovery is even permissible without Congress. (By statute, USCIS fees are set through rulemaking to recover adjudication costs, not to raise general revenue.) Expect litigation.

What’s not ambiguous are the stakes. The H-1B program supplies a critical share of STEM and professional talent to U.S. firms and research institutions; tightening it radically would ripple through tech, health care, finance, universities, and the startup ecosystem—shaping wages, offshoring, and innovation in the process.

H-1B 101: How The Program Works Today

Who it’s for: The H-1B is a temporary, employer-sponsored visa for “specialty occupations” that ordinarily require at least a bachelor’s degree (or equivalent). Common fields include computer science, engineering, finance, and certain medical roles. Initial stays are typically up to three years, extendable to six. Employers file petitions on behalf of named workers.

The cap and lottery: New cap-subject H-1Bs are numerically limited: 65,000 under the regular cap plus 20,000 reserved for holders of U.S. advanced degrees. Universities, nonprofit research organizations, and certain affiliated nonprofits are cap-exempt and can file year-round. Because demand exceeds supply, USCIS runs an electronic registration and selection process (the lottery) before petitions are filed.

Current fees: Since 2025, the registration fee rose to $215 per beneficiary for the FY-2026 cap cycle. If selected, employers pay the I-129 H-1B petition fee (now $780 for most larger employers) plus statutory anti-fraud and training assessments and, when applicable, special surcharges for large H-1B-dependent firms—amounts that vary by employer type and size. (USCIS publishes these in its fee schedule and “H and L Filing Fees” guidance.) None of this is remotely in the five-figure range per year.

Wage and labor rules: Before filing, employers must secure a DOL-certified Labor Condition Application (LCA) attesting they’ll pay the higher of the prevailing wage or the firm’s actual wage for comparable workers and that hiring the H-1B worker won’t adversely affect U.S. workers’ conditions. The LCA framework—posted at worksites and kept on file—anchors the program’s wage protections.

Who Uses H-1B And Why It Matters

Scale and renewals: USCIS approved nearly 400,000 H-1B applications in FY-2024—most of them extensions/continuations for existing workers rather than new entrants—illustrating that H-1B isn’t just a pipeline; it’s a retention backbone for the U.S. skilled workforce. Rejection rates spiked during the previous Trump term and fell afterward, underscoring how policy swings change business planning.

Where workers come from: The nationality distribution is highly concentrated: in FY-2024, about 71% of approved petitions were for workers born in India, with China a distant second. That concentration has been stable for years.

Industries: H-1Bs cluster in computer and mathematical occupations, but finance, engineering services, and parts of health care (especially academic hospitals and research centers, which are cap-exempt) also rely on them. Brookings’ metro-level analyses show demand is intensely geographic, with hubs like New York, the Bay Area, Dallas, and others absorbing large shares.

Why employers use it: A sizable research literature links skilled immigration to higher patenting, productivity, and STEM spillovers, and conversely finds that restrictions push activity abroad. In plain English: talent access matters for innovation.

What A $100,000 Annual Fee Would Change

From cost recovery to cost barrier: Today’s all-in government fees per case usually run in the low thousands (petition, anti-fraud/training assessments, etc.), plus optional premium processing; legal and compliance costs vary by employer. An annual $100,000 surcharge would be a two-order-of-magnitude shock that dwarfs wages-and-benefits differentials. For a startup hiring two machine-learning engineers, that’s $200,000 per year in new, recurring fixed costs—before payroll. Even for Big Tech, multiplying six-figure per-head taxes across hundreds or thousands of roles becomes material to workforce location decisions.

Likely carve-outs? Early reporting hasn’t clarified whether cap-exempt petitioners (universities, nonprofit hospitals) would be spared. If they’re not, teaching hospitals facing a projected shortage of up to 86,000 physicians by 2036 would encounter a major new burden recruiting specialists and clinician-scientists. If they are spared, line-drawing will be contentious and litigated.

The legal cloud: USCIS fees are traditionally justified through biennial fee reviews and Administrative Procedure Act rulemaking aimed at cost recovery, not policy-deterrence at punitive levels. That’s why many observers expect immediate suits questioning authority to impose a six-figure annual charge absent Congressional action. Even if announced by proclamation, implementing it in practice will likely hit the brakes in court.

Company-Level Impacts: Tech, Startups, And Beyond

Big Tech and AI: Large platforms could absorb the fees financially but may not do so strategically. Facing a per-head six-figure tax on specific U.S. roles, multinational firms can re-weight hiring to foreign affiliates in Canada, India, the U.K., or the E.U.—exactly the behavior documented when H-1B quotas or denials tighten. That logic is especially strong in AI, where teams are fluid, data centers are global, and collaboration tooling makes borders matter less.

Startups: Early-stage companies—especially those pre-profit—would be hit hardest. Every H-1B hire would carry the effective burn-rate of a senior engineer before salary. For many, the clean alternative is to found or staff abroad and keep a Delaware parent only for fundraising. That’s not hypothetical; firms have made this pivot during past crackdowns.

Consulting and outsourcing: Critics of the program, including labor groups, argue some firms arbitrage wages via H-1B and outsourcing models. A blunt $100,000 fee would blunt some of those models—but it would also hit in-house R&D and high-end roles indiscriminately, and the literature suggests blanket restrictions increase offshoring rather than rehiring domestically. Policy design matters.

Universities and hospitals: If not exempted, research labs and academic medical centers would face “talent taxes” that cannibalize grant budgets and patient-care margins. That collides with long-running physician and primary care shortages in many regions.

Worker-Level Impacts: Mobility, Wages, And Careers

Chilling effects: An employer-paid $100,000 annual fee changes the calculus of mobility. Firms could pressure H-1B employees into longer commitments to amortize the fee; smaller firms may avoid sponsoring altogether. That narrows the set of U.S. opportunities for global talent.

Wages: theory vs. evidence: Some expect fees to be pushed into lower wages or reduced hiring. Yet DOL’s LCA framework—and the requirement to pay at least the prevailing or actual wage—limits direct underpayment; the bigger risk is no job at all if the fee is prohibitive. Over time, limiting skilled immigration can lower native employment and wages in complementary roles by reducing innovation and firm growth.

Career trajectories: The U.S. has been the default destination for global STEM talent. A shock of this magnitude would push graduates to Canada’s GTS, the U.K. Skilled Worker route, or Australia’s TSS—systems designed to be faster and, critically, far cheaper than six-figure annual taxes.

The Macroeconomics: Offshoring, Innovation, And Productivity

Offshoring rises when visas tighten: Rigorous studies show that when the U.S. constrains H-1B access, multinationals expand foreign affiliate employment—notably in Canada, India, and China. That means fewer high-skill roles stateside and less spillover to local ecosystems of suppliers, services, and startups. A six-figure fee would likely amplify this response.

Innovation slows when talent pools shrink: Decades of research link high-skill immigration with higher patenting rates, firm formation, and productivity in U.S. cities. The mechanism isn’t mysterious: dense networks of specialized skills unlock new products and processes. Remove large slices of that network, and the flywheel slows.

Who bears the cost? Consumers (via slower product cycles), workers (via fewer complementary jobs), and the broader economy (via reduced TFP growth). Over long horizons, the interplay between STEM labor supply and innovation dominates. A policy that meaningfully suppresses inflows will show up—in time—in the macro data.

International Benchmarks: What Competitors Charge (And Why Firms Move)

Canada (Global Talent Stream): Employers pay a C$1,000 per-position LMIA fee under the Global Talent Stream, plus a C$230 employer compliance fee in many LMIA-exempt cases under the International Mobility Program. Ottawa markets GTS as “timely and predictable,” and provinces court teams with fast work authorization. Even with legal and relocation costs, this is nowhere near $100,000 per year.

United Kingdom (Skilled Worker): The U.K. raised the general salary threshold to £38,700 in 2024, and charges sponsorship and visa fees plus the health surcharge. Expensive? Yes. But not six figures annually per head—and the U.K. has created targeted founder and scale-up pathways to attract tech teams.

Australia (TSS Subclass 482): Australia enforces a minimum TSMIT salary floor for sponsored workers and levies visa and training charges. Again, burdensome in parts—but not a blanket six-figure annual tax. For teams deciding where to expand, differential costs of this magnitude are decisive.

Bottom line: If the U.S. prices H-1Bs at $100,000 per year, America’s closest talent competitors become dramatically more attractive overnight.

Health Care: The “Cap-Exempt” Wild Card

Hospitals and universities have long leveraged cap-exempt H-1Bs for physicians, therapists, medical technologists, and researchers. If a $100,000 charge applies here, cap-exempt employers could face a talent tax during a period when the U.S. is staring at physician shortfalls through 2036. If it doesn’t apply, expect aggressive disputes about eligibility and “related or affiliated” nonprofit status. Either way, health-system HR and GME directors will be modeling scenarios now.

The Politics And The Process: How We Got Here

Past tightening (2017–2020): The first Trump term brought Buy American, Hire American, attempts to narrow “specialty occupation,” and a (brief) DOL wage rule requiring much higher prevailing wages, portions of which were enjoined or revised after litigation. Business models shifted accordingly, with denial spikes and compliance whiplash.

Recent modernization: USCIS in 2024–2025 finalized a beneficiary-centric registration system (to deter multiple filings) and increased the registration fee to $215 starting with the FY-2026 cap—firm steps toward orderly, fraud-resistant selection without pricing out legitimate employers. That context makes the new $100,000 idea look less like housekeeping and more like a policy sledgehammer.

Legal authority: USCIS explicitly grounded its 2024 fee rule in cost-recovery economics. A six-figure annual fee to deter usage instead of fund adjudication is precisely the kind of move courts scrutinize under the APA and INA fee provisions. Plan on injunction motions if the government tries to operationalize this quickly.

Scenario Planning: Three Paths From Here

1. Court Roadblock (Most Likely Near-Term): Lawsuits freeze implementation while courts assess authority. Employers proceed under the status quo (registration + petition fees), and the policy becomes a 2026–2027 political football.

2. Partial/Targeted Application: The fee gets narrowed—e.g., applied only to certain categories (H-1B-dependent, third-party placement, or cap-subject only), or adjusted downward to something defensible under cost principles. Even so, uncertainty pushes firms to hedge abroad.

3. Full Implementation: If courts allow it as announced, expect a non-linear drop in U.S. H-1B filings, a rise in foreign affiliate hiring (especially in Canada/U.K./India), and a measurable drag on patenting and new-firm formation in U.S. hubs within a few years.

Practical Implications For Employers (And Workers) Right Now

• Map your roles: Identify which positions are cap-subject vs. cap-exempt and model fee-exposure under different policy variants. Universities and nonprofit hospitals should stress-test budgets either way.

• Build a dual-track talent plan: Expand near-U.S. hubs (Toronto/Waterloo, Vancouver, London, Dublin, Sydney/Melbourne) as insurance, given the robust alternatives described above.

• Reinforce compliance: Scrupulous LCA wage practices and documentation are table stakes regardless of policy outcomes.

• Watch the docket: If an implementing rule or proclamation appears, follow the litigation timeline closely; injunctions can change filing windows fast.

Why This Matters For America’s Economy

America’s lead in semiconductors, AI, biotech, and finance wasn’t guaranteed; it was built atop universities, capital markets, and high-skill immigration. The research signal is clear: restricting H-1B access shifts jobs overseas and dampens innovation. A $100,000 annual fee would do both at scale, while failing to address genuine problems (bad-actor outsourcing, wage misclassification) that are better handled through targeted enforcement and prevailing-wage calibration. The choice is not between open borders and protectionism; it’s between smart guardrails and self-sabotage.

What To Watch Next

• Text and Authority: Does the final instrument specify scope (cap-subject vs. exempt)? How is the fee justified legally—cost recovery or deterrence?

• Immediate Lawsuits: Expect challenges from industry groups, universities, and immigrant-rights organizations within days, seeking temporary restraining orders.

• Corporate Signals: Hiring freezes for U.S. roles paired with expansion announcements in Canada/U.K./India would be telltale responses.

• Bilateral Impacts: With Indians comprising the majority of H-1B approvals, watch U.S.–India business diplomacy and tech-corridor investments for knock-on effects.

Conclusion: Price Is A Policy

The administration’s $100,000 H-1B fee proposal isn’t a “fee” in any conventional sense—it’s industrial policy by price tag. If enacted, it would re-wire talent flows overnight, advantaging competitors whose systems are fast and (comparatively) cheap. If blocked, it still inflicts uncertainty costs that nudge firms to de-risk abroad. Either way, the episode underscores a durable truth of the global economy: great-power competition runs on people. Make it too costly for them to build here, and they’ll build somewhere else.