Trump's $100K H-1B fee threatens startups and innovation, experts warn

When Donald Trump signed an executive order last Friday imposing a $100,000 fee on H-1B visa applications, Abhishek Singh felt the ground shift beneath him. A software engineering manager in the Seattle area, Singh has spent the last seven of his ten years in the United States on an H-1B visa, working for a startup. He knew immediately that his employer—a company still burning through venture capital and watching its runway—would not absorb a six-figure charge on top of his salary. The White House clarified the next day that the fee would apply only to future applicants, offering Singh temporary reprieve. But his instinctive panic revealed something the policy's architects may not have fully reckoned with: the fee does not fall evenly across the economy.

The H-1B programme has long been synonymous with Silicon Valley's largest names. Amazon led all employers in the first half of 2025 with more than 10,000 approved visas. Microsoft, Meta, Apple, and Google each secured over 4,000. These thirty dominant employers—mostly large technology firms—account for roughly 40 percent of all new H-1B visas distributed annually. For them, a $100,000 per-applicant fee is a line item, not an existential threat. But the programme extends far beyond the tech giants. Startups, nonprofits, hospitals, and educational institutions also depend on H-1B workers to fill specialized roles. For those organizations, the fee is not manageable.

Karen Brady, chief executive of Ryther, a behavioral health nonprofit in Seattle, was direct about the math. "There's no way that we can afford $100,000," she said. Ryther currently employs two therapists on H-1B visas out of a staff of 45, both from China. Both bring something Brady cannot easily replace: linguistic and cultural fluency that allows them to serve families from similar backgrounds. The behavioral health sector has been starved for workers since the pandemic, and the H-1B programme has helped Ryther address that shortage. Going forward, Brady said, the organization will not pursue any more H-1B visas. The loss is not just about headcount; it is about the specific capacities those workers bring.

John Skrentny, a professor at the University of California, San Diego who studies STEM workforce development, framed the risk plainly: "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." The Trump administration's justification for the fee centered on preventing wage abuse—a concern that spans the political spectrum—and the administration is pursuing a broader overhaul of the programme, including proposals to prioritize higher-paid applicants. But critics argue the fee will not achieve its stated goal. Instead, it may trigger the opposite outcome.

Dan Wang, a professor at Columbia Business School focused on global migration and entrepreneurship, said the policy creates a perverse incentive. Companies facing the new cost will not necessarily hire American workers at equivalent skill levels; they will move operations offshore. "These policies really don't have the intended effect of balancing the labour market competitiveness of American workers," Wang said. "There's not a trace of data that suggests that American workers would benefit from this." Elise Fialkowski, co-chair of the corporate immigration practice at Klasko Immigration Law Partners, reported that since the order was signed, some of her larger corporate clients have begun exploring whether to hire talent in Canada, the United Kingdom, and elsewhere instead. The fee, she said, "almost begs companies to offshore work."

Economists have begun adjusting their forecasts downward. Atakan Bakiskan, an economist at the investment bank Berenberg, lowered his estimate for US economic growth from 2 percent at the start of the year to 1.5 percent, citing the H-1B fee as part of the Trump administration's broader "anti-growth policymaking." With the new policy in place, Bakiskan said, "the labour force is more likely to shrink than expand going forward. The brain drain will weigh heavily on productivity." The policy has not been without defenders. Reed Hastings, Netflix's co-founder, broke from many of his peers in tech to call the fee a "great solution," and some policy experts argue that if the positions truly require specialized talent and generate significant value, the major tech companies that dominate the programme should be able to absorb the cost. But the fee's burden falls most heavily on the organizations least able to bear it—and the unintended consequences may ripple far beyond the startups and nonprofits that will simply stop hiring.