President Donald Trump’s decision to make H-1B visas more expensive illustrates a tension between tech companies’ innovation and fairness to workers aiming for careers in the industry.
Mr. Trump announced a $100,000 fee last week for all new applications for such visas, which allow companies to hire highly skilled foreign workers. Days later, the Department of Homeland Security proposed giving preference to higher-paid, higher-skilled applicants for the limited number of visas. The Labor Department says it will investigate companies for H-1B violations, and U.S. lawmakers are asking why the companies are cutting American jobs while hiring foreign workers.
How companies will respond to reforms aimed at this legal pathway for immigration – and how those responses will affect the broader economy – is not yet clear. People who study the industry say there will be long-term effects.
Why We Wrote This
H-1B visas help tech companies find talent that fuels innovation. Now that President Donald Trump is making the visas more expensive, the effects could range from businesses sending jobs offshore to some American workers seeing greater demand for their skills.
“Like any measure, there will be winners and losers,” says Jennifer Hunt, an economics professor at Rutgers University. American computer programmers, she says, could be more in demand if companies decide the increased fee makes foreign programmers too expensive. But, she predicts, the U.S. economy will suffer from the loss of talent.
Talent is central to the H-1B visa program, which proponents say is used to complement a domestic workforce that is unable to meet the tech industry’s needs.
“It’s not possible right now” to replace a highly skilled foreign workforce with Americans, says Madeline Zavodny, an economics professor at the University of North Florida. The pipeline will take years to develop, she says, and larger companies are more likely to offshore those jobs than swap in domestic workers. Start-ups, with smaller staffs and smaller budgets than larger tech firms, have less flexibility to absorb the extraordinary fee and might reign in growth.
And large outsourcing firms such as Infosys and Tata Consultancy Services, which bring in foreign workers for U.S. companies, could possibly go out of business if they can’t find workarounds, says Norman Matloff, emeritus professor of computer science at the University of California, Davis.
The change might be good news, however, for foreign students already in the United States. If the large outsourcing firms are out of the picture, those students will face less competition once they graduate for the limited number of work visas. “It liberates those visas,” Dr. Matloff says. “And, so, the foreign students now can get an H-1B very quickly instead of being in limbo for years.”
Industry reaction
Some of the industry’s biggest companies – Apple, Amazon, and Microsoft, for instance – have been silent on the merit of the H-1B changes, which will be realized next year when applications open for 2027. About 120,000 visas have already been granted for 2026, and applications are closed.
James Manyika, a senior vice president for Google, told the Washington Post on Tuesday that the company’s portion of employees on H-1B visas is small, and he does not anticipate a disruption. “We think both things can be true,” he says. Google can invest in U.S. talent, and, he says, having “access to the best talent in the world … is important competitively.”
The head of regulatory affairs for the Consumer Technology Association, which represents more than 1,300 companies, says the extraordinary fee will undercut President Trump’s pro-innovation agenda. Michael Petricone of the CTA posted on X that “taxing innovation” will push talent abroad, hurt startups, and hurt U.S. workers.
Indian IT company Mphasis told the Monitor in an email that the changes will not significantly affect their operations. With more than 31,000 employees in 21 countries, it had 78 new H-1B visas approved for 2025. The company has reduced its reliance on visas over the years, says a spokesperson, and will use artificial intelligence to “solve any challenges that may arise.”
Other tech leaders expressed the importance of hiring from a global pool, while also supporting reforms to the program. Nvidia chief executive Jensen Huang told CNBC that “We want all the brightest minds to come to the U.S,” while adding, “I’m glad to see President Trump making the moves he’s making.”
On the same program, Sam Altman, the head of Open AI, said: “We need to get the smartest people in the country, and … aligning financial incentives seems good to me.”
Visas mean jobs, but family, too
President Trump said in his proclamation last week that the H-1B visa program has been abused by employers to suppress wages and replace American workers with immigrants. The visa fee, he says, will reduce those abuses while still allowing companies to bring in foreign talent.
Some of that abuse was documented in a 2021 study by the Economic Policy Institute, which uncovered widespread wage theft by an India-based outsourcing firm, one of the industry’s largest. The “blatant lawbreaking” was enabled by loopholes and lax enforcement, says the report.
The H-1B system amounts to indentured servitude, says Dr. Matloff, who has studied the program for decades. The visa allows foreign workers to apply for their green card, which gives them permanent legal residency in the U.S. That’s the real allure, he says.
“That has always been the case,” he says. “The salary is secondary, because once you get here, you can apply for your siblings, you can apply for your parents to come on green cards.”
But the process can take years. During that time, he explains, H-1B workers depend on their employers, who sponsor the visas, for legal U.S. residency.
The H-1B program is the only way for them to work in the U.S. and establish a life here until they gain permanent residency, says Jorge Loweree, managing director of programs and strategy at the American Immigration Council, which advocates for immigrants.
The visas, he says, are “propping up our entire employment-based system of immigration.” Without it, he adds, other countries become more attractive to workers whose skills and expertise are in demand.
A search for talent
The Immigration Act of 1990 established the H-1B visa program, allowing employers to bring in temporary workers with specialized skills and education. Proponents say the visa is necessary to attract the best talent from around the world to American companies and to supplement the domestic workforce with specific types of talent.
The United States awards 85,000 new visas per year, with no limit for nonprofit organizations, government research institutions, and universities. There are as many as 700,000 H-1B holders in the U.S., according to published estimates.
Nearly two-thirds go to the tech industry, according to the White House. Government data shows Amazon had the most approved for 2025, with more than 10,000. Tata Consultancy Services is next with more than 5,500, followed by Microsoft, Meta, and Google.
H-1B workers are also filling a crucial gap in the U.S. health-care industry, which faces a well-documented shortage of practitioners. The numbers are smaller – just under 14,000 for new and renewed 2025 visas in health care and social assistance. But many of those recipients are working in rural and underserved areas that have trouble filling a need for doctors. An administration spokesperson told Bloomberg News that doctors might be exempt from the new fee.
For many of the companies that do have to pay, the fee is prohibitive, says Gaurav Khanna, an economics professor at the University of California, San Diego. The higher cost of hiring will eventually slow production, he says, and make technology more expensive.
America needs to attract global talent to be at the forefront of the artificial intelligence boom, says Dr. Khanna. It’s a numbers game, he says – access to the global market allows companies a greater selection of top talent; that pool runs out quicker if companies are limited to hiring U.S. workers. It also becomes more expensive, “which is good for those workers,” he says. “But it is costly for the companies.”
