In a major step targeting the H-1B visa programme, US President Donald Trump on Friday signed a proclamation that will raise the fee for such visas to USD 100,000 annually — thereby making it prohibitively expensive for tech companies to hire Indian professionals in the country.
This move—targeted at curbing the “abuse” of the H-1B visa regime—is potentially going to impact skilled Indian professionals.
Indians are the biggest beneficiaries of the H-1B visa. Between October 2022 and September 2023, 72 per cent of the nearly 4 lakh visas issued under the H-1B programme went to Indian nationals. During the same period, the top four Indian IT majors with a presence in the US—Infosys, TCS, HCL, and Wipro—obtained approval for approximately 20,000 employees to work on H-1B visas, according to the latest data from the US Citizenship and Immigration Services (USCIS).
According to the US government order, “The H-1B nonimmigrant visa program was created to bring temporary workers into the United States to perform additive, high-skilled functions, but it has been deliberately exploited to replace, rather than supplement, American workers with lower-paid, lower-skilled labor. The large-scale replacement of American workers through systemic abuse of the program has undermined both our economic and national security.”
“Some employers, using practices now widely adopted by entire sectors, have abused the H-1B statute and its regulations to artificially suppress wages, resulting in a disadvantageous labor market for American citizens, while at the same time making it more difficult to attract and retain the highest skilled subset of temporary workers, with the largest impact seen in critical science, technology, engineering, and math (STEM) fields,” it added.
“The number of foreign STEM workers in the United States has more than doubled between 2000 and 2019, increasing from 1.2 million to almost 2.5 million, while overall STEM employment has only increased 44.5 percent during that time. Among computer and math occupations, the foreign share of the workforce grew from 17.7 percent in 2000 to 26.1 percent in 2019. And the key facilitator for this influx of foreign STEM labor has been the abuse of the H-1B visa,” it said.
It also said that “information technology (IT) firms in particular have prominently manipulated the H-1B system, significantly harming American workers in computer-related fields. The share of IT workers in the H-1B program grew from 32 percent in Fiscal Year (FY) 2003 to an average of over 65 percent in the last 5 fiscal years. In addition, some of the most prolific H-1B employers are now consistently IT outsourcing companies. Using these H 1B-reliant IT outsourcing companies provides significant savings for employers: one study of tech workers showed a 36 percent discount for H-1B ‘entry-level’ positions as compared to full-time, traditional workers. To take advantage of artificially low labor costs incentivized by the program, companies close their IT divisions, fire their American staff, and outsource IT jobs to lower-paid foreign workers.”
We need great workers: Trump
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White House staff secretary Will Scharf said the H-1B non-immigrant visa programme is one of the “most abused visa” systems in the country’s current immigration system, and it is supposed to allow highly skilled labourers, who work in fields that Americans do not work in, to come into the United States.
The Trump administration said that the $100,000 fee is aimed at ensuring that the people being brought into the country are “actually very highly skilled” and do not replace American workers.
The move is aimed at protecting American workers while ensuring that companies have a pathway to hire “truly extraordinary people” and bring them to the United States. Companies pay to sponsor H-1B applicants.
“We need workers. We need workers. We need great workers, and this pretty much ensures that that’s what’s going to happen,” Trump said, as he signed the proclamation in the Oval Office in the presence of Commerce Secretary Howard Lutnick.
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Lutnick said that historically, the employment-based Green Card programme admitted 2,81,000 people a year, and those individuals earned USD 66,000 a year on average, and were five times more likely to participate in government assistance programmes.
“So we were taking in the bottom quartile, below the average American. It was illogical, the only country in the world that was taking in the bottom quartile,” Lutnick said.
“We are going to stop doing that. We’re going to only take extraordinary people at the very top, instead of those trying to take jobs from Americans. They’re going to create businesses and create jobs for Americans. And this programme will raise more than USD 100 billion for the treasury of the United States,” he added.
Trump said that the country will use that amount to cut taxes and pay down debt. “We think it’s going to be very successful,” Trump said.
Big blow for tech firms
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The move is expected to significantly impact Indian technology workers who are hired by tech companies and others on H-1B visas. The visas are valid for three years and can be renewed for another three years.
If a company sponsors an employee for the Green Card, the visas can be renewed till the permanent residency comes through. However, Indians on work visas in the US are caught in a decades-long wait for Green Cards, and the new move could impact whether they can continue to stay in the US if their companies decide not to pay the USD 100,000 fee annually now required to retain the visas.
“So the whole idea is, no more will these big tech companies or other big companies train foreign workers. They have to pay the government USD 100,000, then they have to pay the employee. So it’s just not economic. If you’re going to train somebody, you’re going to train one of the recent graduates from one of the great universities across our land, train Americans. Stop bringing in people to take our jobs. That’s the policy here. And all of the big companies are on board. We’ve spoken to them about,” Lutnick said.
On whether the technology CEOs, who hire foreign workers on H-1B visas, are concerned about the new move, Trump said they will be very happy. “Everyone is going to be happy. And we are going to be able to keep people in our country that are going to be very productive people. And in many cases, these companies are going to pay a lot of money for that, and they are very happy about it,” he said.
The Gold Card, a new visa pathway
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Trump also signed an executive order entitled ‘The Gold Card’, aimed at setting up a new visa pathway for foreigners of extraordinary ability who are committed to supporting the United States.
Under the Gold Card programme, individuals who can pay USD 1 million to the US Treasury, or USD 2 million if a corporation is sponsoring them, will get access to expedited visa treatment and a path to a Green Card in the country.
“We are taking in hundreds of billions of dollars. The Gold Card will be taking in hundreds of billions of dollars, and companies will be able to keep some people they need. They need people of expertise, great expertise. I think it’s going to be a fantastic thing, and we’re going to take that money and we’re going to reduce taxes, we’re going to reduce debt,” Trump said.
Valuable people only for America: Howard Lutnick
When asked if the new USD 100,000 fee will apply to the H-1B visa holders already in the country, to renewals or to those applying for the first time from abroad, Lutnick said, “Renewals, first times, the company needs to decide. Is that person valuable enough to have USD 100,000 a year payment to the government, or they should head home and they should go hire an American,” he said.
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“It can be a total of six years, so USD 100,000 a year. So either the person is very valuable to the company and America, or they are going to depart and the company is going to hire an American. That is the point of immigration – hire Americans and make sure the people coming in are the top, top people. Stop the nonsense of letting people just come into this country on these visas that were given away for free. The president is crystal clear. Valuable people only for America. Stop the nonsense,” Lutnick added.
Last month, Lutnick had stated that the US intends to modify the current immigration system, specifically the H-1 B visa programme and Green Cards. “ I am involved in changing the H-1B visa programme. We are going to change that programme because that is terrible, right? We are going to change the Green Card,” Lutnick had said, during an interview with Fox News.
Florida Governor Ron DeSantis had also criticised the H-1B visa programme, calling it a “total scam” and arguing that it allows companies to replace American workers with foreign labour. DeSantis had disputed the notion that the H-1B programme attracts the “best and brightest” talent, suggesting instead that it has become a system that benefits a specific industry, largely dominated by workers from one country.
“Most of them (H-1Bs) are from one country, India, there is a cottage industry about how all those people make money off this system,” he said. With artificial intelligence increasingly displacing young workers, DeSantis questioned why the US should import more foreign labour instead of prioritising its own citizens.
