Last week the White House announced there will be a new $100,000 H1-B visa fee for the next 12 months. It will apply only to visas for new employment, in a speciality occupation, for a worker currently outside the US. It does not apply to H1-B renewals, which we interpret to include extensions at an existing employer or a change of employer. The DHS Secretary can, however, provide an exemption, which can be done for an individual person, company, or entire industry. In addition, the Labor Secretary will likely raise the “prevailing wage level” guidance used to help set salaries for H1-B applicants. President Trump also changed H1-B policy in his first term, though policies that led to higher denial rates were eventually overturned in court. The H1-B is an employer-sponsored visa program primarily for speciality occupations in which recipients possess “theoretical and practical application of a body of highly specialized knowledge” and have at least a bachelors degree. Today, the program is best known for bringing in technology work- ers, especially from India.

In FY24, 64% of H1-B petitions were in computer-related occupations, 71% were from India, and another 11% from China. The largest sponsors tend to be technology, consulting, and other professional services firms. There were 141k approved petitions for new employment in FY24, of which 65k involved consular processing outside the US (Table 1). This latter group are the most likely to be hit by the new fee. If all of them were to stop, it would reduce work authorization for immigrants by up to 5.5k per month, unless immigrants are able to use other visa categories to get employment.

The full effect of this action will not be felt immediately. USCIS has announced that it already has all the petitions it needs for FY26 that will count against the H1-B cap, which is 65k for the “regular cap” and another 20k for individuals holding a masters degree or higher from a US university. USCIS will only begin accepting petitions for FY27 next April 1. More immediately, the change will start affecting cap-exempt employers, which include universities and non-profit or government research organizations. From an aggregate employment perspective, the number of affected workers is fairly small, though the impact could be felt more for technology firms and for immigrants from India. Consulting companies, especially Indian firms, are well- known users of the H1-B, though this may already have been declining.

In FY24, consulting companies accounted for 42% of the beneficiaries among the top 50 firms, including 29% for Indian consulting companies. In the first three quarters of FY25 those figures were 31% and 20%, respectively. The implications for India are discussed by our colleagues here. They note research that suggests H1-B limits may encourage firms to offshore employment instead of hiring more US workers. Related to that, however, they highlight that India’s service exports to the US are already 6-7% of Indian GDP, and that this could become another target for US tariffs, which to date have focused just on goods. It is possible that this change will make it less attractive for foreign students to come to the United States to study, if these changes reduce the post-graduation chance of finding a job in the US.

However, the reverse is also possible, because the fee only applies to applicants “currently outside the United States.” The number of petitions processed inside the US closely corresponds to the number of people who are switch- ing US visa types, with 71% of these being students in FY24. Changes to prevailing wages could affect a wider swath of H1-B visa petitions, including those for continuation of employment. That would apply for a job or employer change (62% of continuations in FY24), and also in some cases for a simple extension of a current job. The Department of Labor sets prevailing wage bands that are currently estimated around the 17th, 34th, 50th, and 67th percentile of the wage band. In FY25 close to two-thirds of H1-B applications have had declared minimum wage rates in the first two bands, and another 20% in the third band, consistent with the visas going toward workers with more junior wage rates.