The Trump administration’s abrupt decision to impose a $100,000 fee on H-1B visas has stunned and confused employers, students, and workers from the United States to India and beyond.

Since announcing this decision on Friday, the White House has attempted to reassure anxious companies that the fee does not apply to existing visa holders and that their H-1B employees traveling abroad will not face barriers to re-entry. The new policy officially took effect Sunday at 12:01 a.m. Eastern Time.

Despite the reassurance, many are still advising H-1B employees to refrain from traveling until the implications become clearer. As Leon Rodriguez of the Seyfarth law firm noted, “there’s still some folks out there recommending to their H-1B employees that they not travel right now until it’s a little clearer.'

Understanding H-1B Visas

Established by the 1990 Immigration Act, H-1B visas are nonimmigrant visas designed to allow U.S. companies to bring in foreign workers with specialized skills that are hard to find domestically. Although intended for temporary employment, many visa holders transition to different immigration statuses over time. An H-1B visa is valid for three years with an option for a three-year extension, resulting in an estimated 700,000 current holders residing in the U.S., with an additional half a million dependents.

Approximately 60% of all approved H-1B visas since 2012 have been for occupations in technology, as reported by the Pew Research Center, but several sectors, including healthcare and education, also rely heavily on this program.

New Fee Implementation

The recently introduced $100,000 fee becomes substantial when compared to the current application fee of $215. This annual fee, as elaborated by Commerce Secretary Howard Lutnick, would total $600,000 over the maximum number of renewals allotted. However, the White House clarified that it is a one-time payment that won't impact current visa holders.

Moreover, a $1 million “gold card” visa for wealthy individuals has also been introduced.

The administration faces potential lawsuits for allegedly circumventing Congress with these significant changes in the legal immigration landscape.

Rationale Behind the Fee

Critics argue that H-1B visas contribute to lowering wages for American workers, as foreign workers might be willing to accept lower pay. The White House asserts that many companies are taking advantage of this by outsourcing jobs and eliminating American positions.

As Stephen Brown of Capital Economics remarked, the calls for reform regarding the H-1B program are difficult to dismiss. Nonetheless, he warns that while many tech firms may weather a $100,000 fee, sectors relying on H-1B visa workers such as healthcare and retail may struggle with the expenses.

Projected Impact on Future Migration

Navneet Singh, a consultant in Punjab, India, forecasts that future changes to H-1B visa policies will significantly influence migration patterns, particularly from India. He stated, “Trump is trying to suffocate new immigrants who are skilled, so that they won’t take jobs from average Americans.”

Many Indian students aspiring to further their education in the U.S. express deep disappointment with the new policies. The sentiment is echoed broadly, as many feel that H-1B visa difficulties could hinder their career prospects and broader life decisions.