US companies push back against Trump’s proposal for hefty H-1B fee

The Trump administration’s decision to impose a $100,000 fee on new H-1B visa applications has sparked fierce backlash from US business groups, labor organizations, and educational institutions.

Many describe the move as an overreach that threatens to undermine America’s competitiveness in global technology and innovation.

A coalition including the United Auto Workers, the American Association of University Professors, and multiple religious organizations has filed a lawsuit in the US District Court for the Northern District of California.

The plaintiffs challenge the fee’s legality, arguing that such a drastic surcharge can only be levied by Congress, not via executive proclamation.

In their filing, the plaintiffs contend that the sudden policy change — effective just 36 hours after announcement — lacked notice and public comment, violating the Administrative Procedure Act.

They also argue it will disrupt operations across critical sectors like healthcare, education, nonprofits, and tech, where immigrant workers play pivotal roles.

Responding to criticism, the administration has defended the fee as a tool to discourage abuse of the H-1B system and “protect American wages.”

However, industry insiders warn that the move may have unintended consequences. Many U.S. firms may scale down their reliance on H-1B labor or shift jobs overseas to circumvent the cost burden.

Representative Ro Khanna, a Democrat from Silicon Valley, criticized the blanket fee, calling it “too blunt a tool” that could disproportionately penalize startups and smaller firms. He suggested a better approach would link visa costs to role seniority, skill level, or prevailing wages.

Meanwhile, the US tech stock sector showed some resilience. Despite the regulatory shock, major firms like Google, Microsoft, Amazon and Meta saw only moderate market turbulence in the short term.

Analysts caution, however, that profit margins could come under pressure if recruitment from abroad becomes more expensive.

In India, where over 70% of H-1B visas go, tech stocks dropped as investors reacted to the increased cost of sending talent abroad. Many Indian IT companies may see fewer H-1B approvals or reduced overseas postings if the policy remains.

Experts warn that the change could reshape global talent flows. Some companies may begin offshoring or hiring remote workers rather than sponsoring expensive visas. Others may escalate lobbying for exemptions, especially in sectors already facing labor shortages.

The court has issued a temporary order for the removal of 518 URLs flagged by plaintiffs. The case’s resolution could set important precedent over executive authority in immigration policy.