US President Donald Trump has signed an executive order that will add a $100,000 (£74,000) annual fee for applicants to the H-1B visa programme for skilled foreign workers.
Trump's order mentions 'abuse' of the programme and will restrict entry unless payment is made.
Critics have long argued that H-1Bs undercut the American workforce, while supporters—including billionaire Elon Musk—argue it allows the US to attract top talent from around the world.
In another order, Trump set up a new 'gold card' to fast-track visas for certain immigrants in exchange for fees starting at £1m.
Trump's order is due to come into force on 21 September. It would only apply to new requests, but companies would have to pay the same amount for each applicant for six years, US Commerce Secretary Howard Lutnick said.
'The company needs to decide... is the person valuable enough to have a $100,000-a-year payment to the government, or should they head home, and they should go hire an American,' he said, adding: 'All of the big companies are on board.'
Since 2004, the number of H-1B applications has been capped at 85,000 per year.
Until now, H-1B visas have carried various administrative fees totalling around $1,500.
Data from US Citizenship and Immigration Services (USCIS) indicates that applications for H-1B visas for the next fiscal year fell to about 359,000—a four-year low.
The biggest beneficiary of the programme last fiscal year was Amazon, followed by tech giants Tata, Microsoft, Meta, Apple, and Google, according to government statistics.
Late on Friday, Amazon advised employees with H-1B visas already in the US to remain there and urged those abroad to return quickly before the new fee takes effect.
Meanwhile, India's leading trade body, Nasscom, expressed concern over the new fee, noting the one-day deadline has created 'considerable uncertainty for businesses, professionals, and students across the world.'
India was the largest beneficiary of H-1B visas last year, accounting for 71% of approved applications, while China followed at 11.7%.
Tahmina Watson, an immigration attorney, warned that the ruling could be 'a nail in the coffin' for many small businesses that rely on these visas. 'Almost everyone's going to be priced out,' she said.
'When employers sponsor foreign talent, it's often because they have been unable to fill those positions otherwise,' she added.
The debate over H-1Bs has previously split Trump's team and his supporters, with some in favor of the visas while others have criticized them. Earlier in his tenure, Trump signed an executive order increasing scrutiny of H-1B applications, resulting in a rise in rejection rates.