Impact of H-1B Visa Fee Hike on Small Businesses and Innovation

Tue Sep 30 2025 00:45:26 GMT+0300 (Eastern European Summer Time)

With the recent introduction of a $100,000 fee for H-1B visa applications, small firms are now facing severe challenges in hiring skilled workers, potentially stifling innovation and economic growth.

The recent decision to impose a $100,000 fee on H-1B visa applications has sparked concern among small businesses and startups across various sectors, particularly tech, education, and healthcare. Experts warn that this financial burden may lead to a brain drain and hinder innovation as companies struggle to afford the new costs. Industry leaders emphasize the need for skilled foreign workers, as many sectors already suffer from a shortage of qualified employees.

When US President Donald Trump signed an executive order to add a $100,000 fee for applications for H-1B visas, Abhishek Singh, a software engineering manager from Seattle, feared potential relocation due to his employer’s inability to cover such expenses. This fee is intended for skilled foreign workers, and although initially applying only to future applicants, it raises concerns regarding its wider implications for startups and economic growth.

The H-1B programme, predominantly associated with large tech firms, is vital for smaller businesses as well, which might find the cost prohibitive. Experts argue that the fee could jeopardize innovation as startups, many backed by venture capital, worry about financial sustainability. John Skrentny, a professor at UC San Diego, highlighted that not all companies can bear such burdens, calling into question the long-term impact on workforce diversity.

Organizations in other sectors like healthcare are also voicing their concerns. Karen Brady, CEO of Ryther, a behavioral health nonprofit, stated the new fees would halt their future hiring through the H-1B programme, exacerbating the existing workforce shortages, particularly in culturally competent roles.

As the tech giants profit and absorb these fees, the anticipated brain drain could further diminish the US labor force, with economic projections from investment banks decreasing as the labor market dwindles.

Trump’s decision to impose this fee is framed as a measure against abuse of the H-1B visa system. Some leaders in the tech industry support him, suggesting larger companies can withstand the financial impact. However, critics indicate these policies will not create a fairer labor market but may instead incentivize offshoring and diminish US competitiveness on the global stage.

Singh, despite a temporary reprieve, is contemplating job prospects abroad, reflecting the growing uncertainty faced by skilled immigrants in the current climate.