A federal judge recently invalidated former President Donald Trump’s decision to increase the fee for H-1B work visas to $100,000, which he had authorized in an effort to protect American workers from job displacement by foreign individuals. The ruling came after 20 states contested the fee, arguing the Trump administration exceeded its authority by adjusting the charge without congressional approval.
Understanding H-1B Visas
Established under the 1990 Immigration Act, H-1B visas enable American companies to recruit people equipped with technical skills that are scarce within the United States. These nonimmigrant visas are not designed for permanent residency, though some individuals secure full-time resident status through alternate immigration paths.
The H-1B visa allows employers to hire foreign workers possessing specialized skills and a bachelor’s degree or equivalent qualifications. The visa is valid for three years and can be extended for an additional three years. Stephen Brown from Capital Economics estimated that there are approximately 700,000 H-1B visa holders in the U.S., complemented by another 500,000 dependents.
According to the Pew Research Center, 60% of H-1B visas issued post-2012 have been for computer-centric roles. Nevertheless, employers across sectors, including hospitals, banks, and universities, actively secure H-1B visas. Annually, new visas are capped at 65,000, with an additional 20,000 allocated to those holding a master’s degree or beyond. A lottery system distributes these visas, with exemptions for universities and nonprofits.
Trump’s Fee Increase
In September, the White House publicized a new $100,000 application fee for H-1B visas. Previously, applicants paid $215, alongside other processing costs. The fee was implemented less than 24 hours post-announcement.
Critics express concerns that H-1B visas negatively impact U.S. workers, as individuals from overseas might accept lower wages than their American counterparts. Companies like Tata Consultancy Services typically provide Indian workers to businesses, with Pew estimating that nearly 75% of successful applicants in 2023 came from India.
The Economic Policy Institute reported in 2020 that 60% of H-1B roles certified by the U.S. Labor Department received wages below the job’s median rate. Despite arguments that visa holders enhance productivity and complement U.S. workers, few companies willingly accepted Trump’s fee. As of mid-February, only 85 payments had been made, generating $8.5 million in revenue.
The increased fee did not affect foreigners already in the U.S. on student visas looking to work domestically, resulting in a negligible decline in H-1B visa issuance. According to Capital Economics, the issuance rate was comparable to levels from the 2010s.
Court Decision
Judge Leo Sorokin, from the U.S. District Court in Boston, ruled that the visa fee contravened the Administrative Procedure Act, which governs regulation development by federal agencies. He stated, “The Court finds that the Policy imposes a tax on H-1B petitions without the requisite delegation by Congress.”
This ruling diverged from a prior federal court decision that maintained the fee until its scheduled expiration in September. Another lawsuit, filed by religious and labor groups in San Francisco, could result in divided rulings across three appellate court circuits.
The Massachusetts-based case asserted that the policy hinders state capabilities to hire educators and staff public colleges, potentially hampering academic research and reducing medical workforce numbers.