The new proclamation signed by President Trump marks one of the most drastic overhauls of the H-1B program in its history, imposing an unprecedented USD 100,000 annual fee per application starting September 21, 2025.

The move is framed as a corrective to what the administration calls “systemic abuse” by IT and outsourcing companies, which it argues have used the visa route to replace American workers, depress wages, and exploit loopholes for profit.


At the heart of the policy is a claim that H-1B visas have shifted from their original purpose of importing top-tier global talent on a temporary basis to becoming a low-cost labour pipeline dominated by IT companies.

Data cited in the proclamation shows that while foreign STEM participation has risen sharply since 2000, overall job growth for Americans in these fields has stagnated.

In computer and mathematics occupations alone, the share of foreign workers rose from 17.7% in 2000 to over 26% by 2019. IT firms have particularly expanded their footprint in the program, with their share of approvals climbing from 32% in FY2003 to an average of 65% in recent years.

The administration highlights troubling practices, pointing to cases where American employees were laid off, made to train their replacements, and subjected to restrictive severance contracts. It accuses outsourcing firms of driving a race to the bottom in wages, citing studies that show “entry-level” H‑1B roles cost companies 36% less than employing equivalent full-time American staff.

This cost arbitrage has, it warns, distorted labour markets, undermined wage growth, and discouraged American graduates in STEM fields at a time when unemployment among computer science and engineering majors remains above 6%.

Beyond economics, the proclamation raises national security alarms, citing investigations of H-1B-heavy outsourcing firms for visa fraud, money laundering, and RICO violations. It warns that an over-reliance on low-paid foreign talent jeopardises both technological leadership and institutional integrity. 

The order directs the Department of Homeland Security and State Department to deny entry to H‑1B workers whose sponsors fail to pay the new fee, while also calling for revisions to the prevailing wage rules to prioritise only “high-paid, high-skilled” entrants aligned with the original spirit of the program.

While the policy allows for narrow exemptions when deemed in the national interest and free from security risks, these are expected to be rare and tightly regulated.

Critics warn that such a steep barrier could deter legitimate applicants, cut off U.S. access to key skills, and weaken innovation in vital sectors. They argue that the blunt financial penalty risks driving investment and top talent away to other innovation hubs, undermining the same long-term competitiveness Washington seeks to protect.

Ultimately, the crackdown represents a political gamble: that restricting and raising the cost of foreign skilled labour will rebalance the U.S. job market in favour of domestic workers in the short term, even if it risks talent flight, corporate restructuring, and diminished global competitiveness in the long run.

The true impact on America’s tech industry, already deeply reliant on foreign expertise, will become clearer in the coming months as firms decide whether to absorb the new cost or reconfigure their hiring and innovation strategies.

Based On ANI Report