In a move set to reshape the U.S. tech industry and the global flow of skilled workers, President Donald Trump has signed a proclamation requiring companies to pay $100,000 per year for each H-1B visa worker they sponsor. The new rule, effective September 21, 2025, also coincides with the introduction of a “Gold Card” visa for individuals able to pay $1 million for U.S. permanent residency.
Trump defended the policy as a way to prioritize highly skilled workers while protecting American jobs. “The main thing is, we’re going to have great people coming in, and they’re going to be paying,” he told reporters at the White House.
H-1B Visas: Background and Purpose
The H-1B visa program, established by Congress in 1990, allows U.S. companies to sponsor foreign workers with specialised skills, such as scientists, engineers, and computer programmers, for a period of three years, extendable to six. Initially intended to fill hard-to-staff roles in fields like STEM, the program has grown to 85,000 visas per year, allocated via a lottery system.
Trump argued that the program has been widely exploited, particularly by IT outsourcing firms. “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,” said U.S. Commerce Secretary Howard Lutnick.
National Security and Economic Justification
The administration’s proclamation labels H-1B abuse as a “national security threat.” Trump said, “Some employers have exploited the program to hold down wages, disadvantageous to U.S. workers.” By imposing the $100,000 fee, officials aim to discourage companies from hiring workers who can be easily replaced by Americans, while still allowing access to the most exceptional talent.
According to the proclamation, IT firms have prominently manipulated the H-1B system, with the share of IT workers in the program growing from 32% in FY 2003 to over 65% in the last five fiscal years. The result, officials argue, is a labor market disadvantage for American workers, particularly college graduates in computer science and engineering.
Immediate Impact on Tech Companies and Indian Workers
With over 70% of H-1B visas awarded to Indian nationals, the tech sector, and especially companies reliant on Indian talent, faces a substantial shift. Amazon, Microsoft, Meta, and other major firms have already advised employees to remain in the U.S. or return quickly if abroad. Internal emails reviewed by Reuters indicate companies are urging H-1B holders to avoid international travel until further guidance is issued.
Industry insiders warn that the move could disrupt the recruitment and retention of early-career professionals. Immigration lawyer Sophie Alcorn noted: “For thousands of Indian tech workers, the proposed fee, if enacted, will likely not force immediate returns but will limit job mobility and make renewals costly… increasing the risk that some will have to go back to India or be attracted to other countries such as Canada, the UK, the UAE, and Saudi Arabia.”
Concerns About Innovation and Global Competitiveness
Analysts warn that prohibitive fees may undermine America’s competitive edge in technology and innovation. Deedy Das, a partner at Menlo Ventures, said: “Adding new fees creates disincentive to attract the world’s smartest talent to the U.S. If the U.S. ceases to attract the best talent, it drastically reduces its ability to innovate and grow the economy.”
Others suggest that companies may move high-value work overseas, potentially affecting sectors like artificial intelligence where the U.S. is in intense global competition with China. “In the short term, Washington may collect a windfall; in the long term, the U.S. risks taxing away its innovation edge, trading dynamism for short-sighted protectionism,” said Jeremy Goldman, an eMarketer analyst.
Legal Questions and Industry Pushback
The legality of the fee is also being questioned. Aaron Reichlin-Melnick, policy director of the American Immigration Council, stated: “Congress has only authorized the government to set fees to recover the cost of adjudicating an application.” Critics argue that the new fee far exceeds the administrative costs of processing applications.
Meanwhile, companies large and small are weighing the financial implications. Smaller tech firms and startups may struggle with the additional costs, while big corporations like Amazon and Microsoft have indicated compliance and proactive guidance to employees.
The “Gold Card” Visa: Another Layer
Alongside the H-1B changes, Trump introduced a “Gold Card” visa, targeting wealthy individuals capable of paying $1 million for U.S. permanent residency. According to Trump, the program will attract “extraordinary people at the very top” who can contribute to job creation and economic growth in America.
Market Response
The announcement has already impacted stocks of IT companies heavily reliant on H-1B workers. Shares of Cognizant, Infosys, and Wipro dropped between 2% and 5% following the news.
Looking Ahead
The new H-1B fee is set to remain in effect for 12 months from September 21, 2025, after which it may be extended or modified. Meanwhile, uncertainty persists among skilled foreign workers, particularly Indians, regarding their long-term prospects in the U.S. tech sector.
As Trump’s administration pushes forward with its immigration overhaul, companies, employees, and policymakers alike are watching closely. The outcome could redefine how America balances national security, domestic employment, and global talent competitiveness for years to come.
