The $100,000 H-1B Fee is Creating Major Challenges

Last fall, an executive order raised the fee for H-1B visas to $100,000, creating immediate turmoil reminiscent of many other immigration policies. Thousands of workers who traveled abroad to renew their visas found themselves stuck outside the U.S., with details about the impacts only surfacing later. Now, six months later, the initial chaos has mostly calmed down, and the H-1B registration season for the upcoming fiscal year has kicked off. With applications open until March 19th, the potential effects of the new rules on hiring and the workforce remain uncertain, but experts caution that the repercussions will extend well beyond the tech sector.

The transition team was split between a nativist faction led by a key advisor and influential tech figures like Elon Musk and Vivek Ramaswamy. This division was evident in their differing views on H-1B visas, which allow skilled foreign workers to fill specific roles in the U.S. This visa category is closely tied to Big Tech, with major companies being the largest employers of H-1B workers. The departure of Musk and the dissolution of his efficiency department marked the decline of the tech-MAGA alliance, paving the way for the fee increase.

While H-1B visas are often associated with high-paying software engineering roles, the policy change has had a more severe impact on other sectors. Companies like Amazon can absorb the increased fees and have found ways to navigate around them. In contrast, rural schools and hospitals, already facing labor shortages, are feeling the brunt of the fee hike. Essentially, the attempt to penalize Big Tech is inadvertently harming underfunded schools and hospitals, particularly in rural areas that supported the former president.

Two significant changes have emerged: the fee increase and a new prioritization system favoring higher-earning applicants. With more applicants than available slots, H-1B visas are allocated through a lottery system. The new rules will weigh applications based on salary, giving those in higher-paying positions better chances of securing a visa. Applicants will be categorized into four wage levels, with Level 1 having one lottery entry and Level 4 receiving four. Immigration attorneys note that this system may prioritize a tech worker with a high salary over a lower-paid teacher.

Margaret Stock, an immigration lawyer in Anchorage, highlights that the fee increase is already impacting public schools in Alaska, which are grappling with significant labor shortages. She represents several school districts that rely on H-1B teachers, whose salaries are determined by union contracts. Given the scarcity of teachers, Alaska offers some of the highest salaries in the nation, with certain counties providing signing bonuses and relocation assistance. However, these resources are limited. “The state doesn’t have the money to pay $100,000 per teacher for an H-1B worker,” Stock explains, noting that it would cost millions to the federal government for teachers.

According to the Alaska Council of School Administrators, Alaska has nearly 600 international teachers, with 341 on H-1B visas. While this is a small fraction of the total H-1B workforce—around 400,000 applications were approved in 2024, mostly renewals—it significantly impacts Alaska, the least populated state. Many of these international teachers hail from the Philippines, Ghana, and India. Prior to the fee increase, several school districts even organized recruitment trips to the Philippines.

Stock emphasizes that the fee hike will have broader implications beyond just prospective immigrants. “Alaska is losing population, and one reason is that people don’t want to live here if they can’t enroll their kids in good schools,” she states. “If class sizes are too large, or there are no teachers, or no activities, or no healthcare, people will choose to leave. This isn’t just an H-1B issue; it affects the entire economy.”

State and federal officials are seeking exemptions from the fee increase. After the announcement, the administration indicated that exceptions would be granted in “extraordinarily rare” cases where hiring foreign workers is deemed “in the national interest” and only when American workers are unavailable. However, exemptions will only be considered if the employer’s inability to pay “would significantly undermine the interests of the United States.” The application process for exemptions is limited to email, and Stock has yet to hear of any being approved.

The fee increase also impacts Alaska Native corporations, which often hire H-1B workers for specialized roles. Stock mentions an H-1B worker involved in hazardous waste management for military bases in Alaska, highlighting that most H-1B workers in the state are not in tech roles.

Alaska is not alone in facing labor shortages; rural clinics nationwide have increasingly depended on immigrant workers. Since the fee change, some positions have gone unfilled. Last September, the National Rural Health Association and the National Association of Rural Health Clinics requested a blanket exception for healthcare providers but received no response.

Global Nurse Force, a nurse recruiting firm, has filed a lawsuit against the administration over the fee hike, one of three federal lawsuits initiated since the change took effect. In a February hearing, government attorneys reported that about 70 employers had paid the fee, suggesting that the low number of applicants indicates the increase “is not a tax because it’s not raising revenue.” This could also imply that employers have found ways to circumvent the fee.

Fariba Faiz, an immigration attorney in San Francisco, notes that the fee has altered hiring practices but hasn’t deterred companies from hiring immigrant workers. “We’re seeing a shift in employer strategy rather than a complete abandonment of the H-1B program,” she explains.

The $100,000 fee applies only to first-time applicants from outside the U.S. Those already in the country on student visas, for instance, are exempt from the increased fee. This loophole has led some companies to prioritize cases that can be filed as changes of status from within the U.S., while others are opting to hire foreign workers remotely instead of relocating them.

“The practical effect is that companies are adjusting their hiring models to avoid the fee rather than eliminating the need for highly skilled workers,” Faiz states. “In many cases, the talent is still being hired, but the jobs are simply no longer based in the United States.”

Despite these workarounds, the broader immigration policies have made some companies more cautious about hiring immigrant workers. Many employers are confused by the new regulations. “I’ve answered countless questions about the $100,000 fee,” says Matt Maiona, an immigration attorney in Boston. He often encounters clients unaware of the options available to bypass the fee. “But it’s not just the $100,000 that’s discouraging companies; it’s the overall environment, the economy, and the uncertainty surrounding how their employees may or may not be able to enter the country, even if they follow all the rules.”

In addition to targeting “criminal aliens,” the administration is tightening regulations on nearly all forms of legal immigration. Recently, the duration of work permits for asylum seekers was reduced from five years to 18 months. The administration also announced a review of all visa holders’ records, including H-1B holders, for any violations that could lead to deportation. Since December, H-1B applicants have faced enhanced vetting, and those with experience in content moderation may have their applications denied.

“The $100,000 fee is something we can provide clarity on,” Maiona explains. “You can consult an immigration attorney, and we can reassure you that you’re likely in good shape. But with the other issues, we can’t offer the same guarantees. That uncertainty is driving a lot of this fear.”