Longtime entrepreneurs and venture capitalists are sounding the alarm over President Trump’s new H-1B fee that would impact tech companies and the workers they hire from abroad.
Trump announced an executive order Friday outlining the $100,000 fee for H-1B work visas, which allow companies to hire highly skilled foreign workers in “specialty occupations” such as software engineering, data science, and other STEM fields.
By imposing the new fee, the Trump administration says it aims to curb abuse of the H-1B program while reserving visas for only the “best of the best.”
Currently, companies pay several thousand dollars in government fees and legal costs per H-1B application. Adding a $100,000 surcharge per worker would be unprecedented.
“Now we’re making H-1B sponsorship prohibitively expensive, cities outside the U.S., like Toronto, Vancouver, and London will pick up the talent,” Manny Medina, co-founder of Seattle startup Outreach, wrote on LinkedIn.
Medina, who is working on a new startup, recently relocated to London. “To my founder friends stuck in visa limbo: London’s doors are open,” he wrote in his post.
Larger companies could theoretically absorb the new costs, but startups — with limited runway and cash — would be especially impacted. “Early teams can’t swallow that tax,” Garry Tan, CEO at San Francisco’s Y Combinator, wrote on LinkedIn.
Xiao Wang, CEO of Seattle immigration startup Boundless, said the policy would be a “blow to H-1B” and could hurt the country’s competitiveness.
“The U.S. has built its leadership in technology and innovation by making itself the destination of choice for the world’s top talent,” Wang said in a blog post. “Policies like this, alongside growing scrutiny of student visa applications, make it harder for bright, ambitious people to come here and put the United States’ standing as a global leader in innovation at risk.”
Amazon (10,044) and Microsoft (5,189) rank No. 1 and No. 3, respectively, for H-1B visa approvals issued to employees this year. Meta, Apple, and Google — which have substantial workforces in the Seattle region — are also in the top 10.
The Seattle area has one of the largest Asian Indian populations in the U.S. More than 40% of foreign-born IT workers in the Seattle area hail from India, the Seattle Times reported in 2018.
After the executive order went out on Friday, Amazon and Microsoft sent memos to employees notifying visa holders to restrict international travel and return to the U.S.
Axios reported Saturday that the new fee would not apply to existing H-1B holders.
The new policy will likely be challenged in court, according to Boundless, which noted that new visa fees “can typically only be introduced either through legislation passed by Congress or through a formal rulemaking process that requires months of public notice and comment.”
Casium, another Seattle-area immigration startup, added: “This is an evolving situation. The proclamation is now in effect, but its real-world application will depend on how agencies implement it, how courts respond to legal challenges, and whether additional guidance is released.”
Previously: Immigration crackdown rattles tech employers and workers amid ICE raids
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