Trump's $100,000 H-1B visa fee rattles tech industry

[H-1b visa application concept: smartphone with USA H-1B visa application over a USA flag]
Cristian Storto Fotografia

The Trump administration's new $100,000 application fee for H-1B visas has rattled the tech sector, with top companies urging their employees holding the visa not to leave the U.S.

India has been the largest beneficiary of H-1B visas, accounting for 71% of the visa holders in the U.S. last year. Most of these visas go to STEM professionals, and Amazon (NASDAQ:AMZN [https://seekingalpha.com/symbol/AMZN]) has seen the most H-1B approvals yearly since 2020.

Jefferies called the $100,000 a "curveball" for the Indian IT sector, saying companies will likely reduce H-1B usage as the fee offsets the EBIT generated per employee over the visa period.

"The H-1B fee will constrain talent supply in the U.S., which in turn will drive up demand for locals/green card holders," Jefferies added. "IT firms will have to pay these employees more or risk losing them."

Top Indian tech stocks slid on Monday: TCS -3%, Infosys -2.6%, Wipro -2.1%.

When announcing the new fee, the White House cited a 2017 study [https://www.nber.org/system/files/working_papers/w23153/w23153.pdf] that showed that the wages for American computer scientists have been impacted by the influx of foreign workers since the 1990s.

However, it didn't mention other findings from the study such as IT sector profits, innovation and efficiency. Another study [https://www.journals.uchicago.edu/doi/abs/10.1086/679061] in 2015 found that the influx of foreign workers boosted wages for U.S.-born workers.

David Bier, director of immigration studies at Cato Institute, said the fee would effectively end the H‑1B program. "This would force leading tech companies out of the U.S., reduce demand for U.S. workers, reduce innovation, have severe second-order economic effects, and lower the supply of goods and services in everything from IT and education to manufacturing and medicine."

MORE ON H1-B VISA

* Trump's New H-1B Visa Regulation Sends Shockwaves Through Big Tech [https://seekingalpha.com/article/4824587-trumps-new-h-1-b-visa-regulation-sends-shockwaves-through-big-tech]
* Tech firms urge H1-B visa holders to refrain from overseas travel [https://seekingalpha.com/news/4496797-tech-firms-urge-h1-b-visa-holders-avoid-overseas-travel]
* Trump said to impose $100K fee on H-1B visas [https://seekingalpha.com/news/4496717-trump-said-to-impose-100k-fee-on-h-1b-visas]