Why Trump is now trying to charge a $127,000 fee for H-1B visas

In addition to ramping up immigration enforcement and deportations in his second term, US President Donald Trump has taken steps to overhaul the H-1B visa programme.

Trump argues that the H-1B, a cornerstone of the employment-based immigration system that allows US companies to hire college-educated foreigners for specialised occupations, has been exploited to displace American workers. 

In September 2025, his administration imposed a US$100,000 (S$127,000) fee on employers hiring new H-1B workers from outside the US through a White House proclamation.

Hospitals, universities, and K-12 schools hard-pressed to pay the levy said the proclamation disrupted hiring plans and exacerbated shortages of nurses and teachers with critical skills.

In June, a federal judge struck down the policy. 

Now, the administration is proposing a new six-figure charge, this time through a formal regulatory process.

The new proposal would cover all H-1B workers hired under an annual cap, including recent graduates of US universities who were spared from the earlier fee.

If it takes effect, it would have a disproportionate impact on Indian-born professionals, who make up the largest share of international students in the US and the overwhelming majority of H-1B workers.

What exactly is the H-1B visa programme?

Introduced in 1990, the H-1B visa programme is one of a series of US immigration initiatives created during the 20th century to address specific labour shortages.

Others facilitated the employment of temporary farm workers from Mexico during World War II, sheepherders mainly from Spain in the 1950s, and nurses, many of whom came from the Philippines, in the 1990s.

Today, employers can apply to bring in foreigners to fill temporary agricultural jobs under the H-2A programme and workers for other kinds of temporary jobs, including seasonal work, under the H-2B programme.

The H-1B visa programme has been the primary entry point into the labour market for hundreds of thousands of US university graduates and other foreigners who bring skills that are in high demand.

They are used primarily by the tech industry, whose leaders say there is a dearth of professionals with science, math and computer skills.

“Computer-related” occupations accounted for 62 per cent of H-1B approvals in fiscal 2025.

Applicants must have at least a bachelor’s degree.

The visas are temporary, lasting as long as six years, but they can be extended indefinitely if a company has sponsored a worker’s employment-based green card application for permanent residency in the US.

How does the H-1B program work?

Employers must petition the government for any workers they want to hire on an H-1B visa.

New visas issued each year are capped at 65,000 – plus an additional 20,000 visas for those with a master’s degree or higher from the US.

Demand from employers exceeds that limit, so employers must register prospective workers in an annual lottery, a process that moved online starting in 2020. 

In January 2024, the US Citizenship and Immigration Services – under the Biden administration – overhauled the lottery system to give each worker the same odds of selection after finding that some employers had gamed the system to inflate the odds of winning.

That change resulted in a sharp decline in duplicate applications. 

In March 2026, the Trump administration changed the system again, replacing the purely random lottery with one that gives higher-paid workers better odds of being selected.

Workers are assigned to one of four wage levels based on the salary they have been offered.

Those in the highest wage group are entered into the lottery four times, compared with three times for those in the next level below, and two times for those in the one below that.

Those in the lowest wage band are entered once. 

Still, recent graduates and early career workers saw improved selection rates in the most recent lottery, which took place in March, largely because the US$100,000 fee proclamation led to a steep drop in overall registrations.

Companies submitted about 211,000 eligible entries for the fiscal year 2027 lottery, according to preliminary numbers shared by US Citizenship and Immigration Services in May, down by more than 38 per cent from the nearly 344,000 eligible entries in fiscal 2026. 

Who uses H-1Bs the most?

Companies such as Amazon.com, Microsoft, Meta Platforms and Apple employ thousands of H-1B visa holders, and universities and hospitals rely on them as well to recruit lecturers and research staff.

The overwhelming majority of H-1B visas go to Indian-born workers, who made up 70 per cent of H-1B visa recipients approved in fiscal year 2025. Chinese-born workers made up about 12 per cent of recipients. 

For international graduate students in the US, the visa is a key pathway to remaining in the country after finishing their education. 

Why is Trump trying to overhaul the H-1B visa program?

Trump says that the H-1B programme has been exploited by companies to replace American workers with lower-paid foreigners, suppressing wages and reducing job opportunities, particularly in the technology sector.

His administration wants to steer new visas towards higher-skilled, higher-paid foreign workers and make it more expensive to hire lower-paid foreign workers. 

One way Trump is seeking to do that is by raising the minimum salaries that employers must pay H-1B workers.

Under draft regulations the Department of Labor (DOL) released in March, wage floors would increase by tens of thousands of dollars a year in some cases.

For example, entry-level software engineers in San Francisco would be paid a minimum of US$162,000 under the proposal, up 30 per cent from the current floor.

A public comment period on that proposal closed in May, and final regulations are still pending at DOL. 

Trump has also sought to overhaul the system by adding new fees for H-1B hires that business groups and other critics say are cost-prohibitive for most employers.

What is the Trump administration’s latest plan for H-1B visa fees?

On Sept 21, 2025, the Trump administration introduced a US$100,000 fee for new H-1B hires from outside the US.

That was on top of previously existing charges, which ranged from about US$960 to US$7,600 for a single petition.

A federal judge struck down the policy in June, ruling that it amounted to a tax that the president did not have the authority to impose without authorisation by Congress. 

Now, the Trump administration is pursuing a different route for a new tax on H-1B workers.

A Department of Homeland Security proposed rule would require companies to pay US$103,265 for most H-1B workers hired by private employers.

The fee would apply when employers file petitions with DHS for workers selected in the annual lottery for one of 85,000 slots available through the programme.

The administration says the fee would help cover the broader costs of running the government’s legal immigration system.

Unlike the White House proclamation, it would apply to workers already in the US, but not people hired by employers exempt from the annual H-1B cap, such as colleges and hospitals.

It also does not appear to apply to extensions of H-1B status. 

What’s been the response to Trump’s fee proposal?

Opponents say the fee is so onerous it would effectively shut most employers out of the H-1B programme, damaging US companies’ recruitment of foreign talent in fields like medicine, artificial intelligence, and engineering.

The US would lose professionals to other nations competing to attract high-skilled immigrant workers.

Start-ups and small and midsize businesses especially would find the charges prohibitive, the US Chamber of Commerce said.

“The programme helps companies expand, innovate, and create jobs across their operations,” said Neil Bradley, the Chamber’s executive vice-president and chief policy officer. 

Attorneys said the fee goes well beyond the costs of administering the programme and is likely another unlawful exercise of tax powers by the administration.

The proposal received praise from groups that advocate for restricting immigration to the US and support the administration’s efforts to limit the number of foreign workers.

Mark Krikorian, the executive director of the Center for Immigration Studies, a Washington think-tank that backs lower immigration rates, said the administration’s proposal has merit, but said “the question of course is whether this would pass legal muster”.

What are the arguments for and against the H-1B visa programme?

Business groups support the programme and say it should be expanded because the quotas on H-1B visas limit their ability to fill labour shortages.

Limits on the number of employment-based green cards, meanwhile, keep many workers locked into the temporary H-1B status for years and in some cases, decades.

In a typical year, 140,000 employment-based green cards are available, and just 7 per cent of those can go to immigrants from a single country.

That has created significant backlogs for countries with high demand such as India.  

Supporters of the H-1B programme cite research showing that the professionals admitted under the programme – mostly workers who moved to the US for college or graduate programmes – deliver benefits to the country.

They have been shown to make more patent applications than their peers and to increase a start-up’s chances of obtaining funding and of winning patents.

Their innovation and productivity has been shown to lead to lower costs for consumers. 

The programme’s critics, on both the right and left, have attacked it for undermining employment of skilled US workers. BLOOMBERG