Small Businesses Face Hurdles As H-1B Visa Fees Surge

Wed Oct 22 2025 02:02:48 GMT+0300 (Eastern European Summer Time)

The recent executive order imposing a $100,000 fee for H-1B visa applications raises concerns among startups and smaller firms, potentially affecting innovation and workforce diversity.

The new H-1B visa fee mandated by the Trump administration has caused alarm among small businesses and startups, as they fear the financial burden could restrict their ability to hire skilled foreign workers. While larger tech companies may absorb the cost, smaller firms argue that the fee could stifle innovation and exacerbate existing labor shortages, particularly in sectors like healthcare and education.

When US President Donald Trump signed an executive order last Friday to add a $100,000 (£74,000) fee for applications for H-1B visas, a programme for skilled foreign workers, Abhishek Singh immediately worried he would have to relocate.

Mr Singh, a software engineering manager based in the Seattle area, knew that his employer - a US startup - would not be in a position to pay the fee on top of his current salary.

Mr Singh, who has been working in the US for ten years - the last seven of them on a H-1B visa - breathed a slight sigh of relief when the White House clarified on Saturday that for now, the fee only applies to future applicants.

But his worries are an indication of the potentially far-reaching consequences of the change, as it creates new burdens for businesses, especially startups, with what some say could be significant fallout for innovation and economic growth.

The H-1B programme is often associated with the giants of the US tech sector. Amazon tops the list of beneficiaries, with more than 10,000 H-1B visas approved in the first half of 2025. Microsoft, Meta, Apple and Google each secured more than 4,000 visas through the programme through June.

But while just 30 employers - mainly big tech companies - dominate the programme, accounting for an estimated 40% of the new H-1B visas, it is not just the behemoths that are poised to be affected by Trump's executive order.

Startups and smaller firms beyond tech also employ workers through H-1B visas. For them, a six-figure fee per applicant could be crippling.

If you're a startup with new technology, and you've got some venture capital money but you're worried about burning through it too quickly, this could kill you, said John Skrentny, a professor at the University of California, San Diego who studies STEM workforce development.

Beyond the technology industry, organisations in sectors like education and healthcare are also grappling with the potential impact of the six-figure fee.

There's no way that we can afford $100,000, said Karen Brady, the chief executive at Ryther, a behavioral health nonprofit based in Seattle.

The behavioural health sector has been grappling with a workforce shortage amidst a spike in need since the pandemic. Hiring through the H-1B programme has helped address the crisis, Ms Brady said.

In a research note, economist Atakan Bakiskan lowered his estimate for US growth, attributing part of the slowdown to the new H-1B fee, which he sees as part of the Trump administration's broader anti-growth policymaking.

Despite concerns, Trump's new fee has garnered some support, with Netflix co-founder Reed Hastings praising it as a great solution to alleged abuses of the H-1B programme.

Ultimately, the shifts in the H-1B programme have raised alarms among businesses about losing access to skilled foreign talent, reflecting broader anxieties around immigration policy and its implications for the US economy.