US proposes $103,265 H-1B fee for employers, Indian tech workers could be hit

The Trump administration has proposed imposing an additional 103265 fee on employers filing capsubject H1B petitions a sweeping increase that could sharply raise the cost of recruiting skilled foreign workers including professionals from IndiaThe Department of Homeland Security said the fee would apply to every capsubject petition including filings for workers eligible under the advanced degree exemption Employers would pay it when filing the petition and in addition to all other applicable fees or paymentsThe proposal is not yet final It is scheduled to be published in the Federal Register on Tuesday beginning a 30day period for public comments DHS estimated that the fee would raise about 88 billion annually based on a projected 85000 capsubject petitions each yearldquoThe proposed H1B fee is intended to recover the costs incurred across the federal government to adjudicate vet and support lawful immigration programs that otherwise must be funded by taxpayersrdquo US Citizenship and Immigration Services spokesperson Zach Kahler saidThe money would be used to recover part of the federal governmentrsquos costs of operating the legal immigration system DHS listed immigration benefit adjudications fraud detection national security screening modernisation of government systems and record collection among those expensesThe revenue would also support immigration courts consular visa processing labour standards enforcement and coordination among federal agencies according to the proposed regulationThe department said the fee would fund immigrationrelated activities undertaken by USCIS Customs and Border Protection Immigration and Customs Enforcement the Justice Departmentrsquos immigration courts the State Department and the Department of LaborIt would not apply to capexempt petitions filed by certain nonprofit research organisations government research bodies and institutions of higher educationThe annual H1B allocation is limited to 65000 visas with a further 20000 places available to foreign nationals who have earned a masterrsquos degree or higher qualification from a US institutionDHS said the fee would be imposed uniformly irrespective of an employerrsquos size or nonprofit status Its analysis found that 14541 of the 28649 organisations filing capsubject petitions in fiscal 2025 were small entitiesThe department estimated that the regulation would have a significant financial impact on 11051 small entities representing 76 per cent of the small organisations covered by its analysisFWDus President Todd Schulte called the proposal a ldquomassive tax on American businessesrdquo and said it formed part of a broader effort to weaken legal immigrationldquoPolicies like the H1B innovation tax and the rumored tax on Optional Practical Training will only hinder our ability to compete globally for top talent and economic leadership Jobs and businesses will move overseas and all workers will be worse off for itrdquo Schulte saidHe also questioned the governmentrsquos legal authority to charge an amount extending beyond the direct cost of processing an individual petition ldquoThis proposed tax clearly violates the law by charging far more than is allowed which should be the cost to adjudicate an H1B petitionrdquo Schulte saidDHS however maintained that federal immigration law permits the government to establish fees at a level sufficient to recover the full cost of immigration adjudication and naturalisation services It said capsubject H1B employers were generally more able to pay than individual immigration applicantsThe H1B programme allows US employers to hire foreign professionals for specialised jobs requiring advanced knowledge Technology engineering finance medicine and research are among the sectors that regularly use the programme