(UNITED STATES) President Trump has imposed a steep new cost on employers who rely on skilled foreign workers, signing a presidential proclamation that raises the H-1B visa fee to $100,000 per worker per year, effective September 21, 2025, at 12:01 a.m. EDT. The order lands with only a day’s notice and could reshape hiring plans at major technology companies, shift delivery models across borders, and pressure both Indian IT firms and US tech stocks as investors weigh the impact on costs and margins.
Early market reaction was swift: Cognizant fell about 4.75% on Nasdaq and Infosys dropped roughly 3.40% on the NYSE after the announcement, signaling investor worry about higher expenses and possible project delays.
Who the fee affects and how it’s applied
- The annual charge applies to each year of H-1B employment for new entries to the United States and is paid on top of the existing stack of H-1B costs.
- The measure is not retroactive for current H-1B holders already in the country and does not apply to people changing status inside the United States (for example, F-1 student to H-1B) or to extensions processed domestically.
- It does apply to:
- New H-1B visa holders seeking to enter from abroad.
- Lottery-selected workers completing consular processing outside the country.
- The change turns what used to be a modest line item for companies with large onshore delivery teams into a major recurring cost center, forcing quick decisions on budgets, staffing, and client contracts.
Most exposed employers
- Large Indian consultancies and services firms—Tata Consultancy Services (TCS), Infosys, Wipro, HCL Technologies, Cognizant, and LTIMindtree—are among the most exposed. They typically sponsor thousands of H-1B professionals for on-site delivery.
- A simple estimate using known sponsorship counts suggests the new rule could raise their combined visa fees from about $13.4 million to roughly $1.34 billion, equal to about 10% of their combined FY25 net profits.
- For businesses running on thin spreads and tight SLAs, the jump is hard to absorb without quick changes to where and how work gets done.
Impact on US tech giants
- US companies that employ large numbers of H-1B professionals—Amazon, Microsoft, Google, Meta, Apple, NVIDIA, and Tesla—face two main paths:
- Reduce H-1B hiring, increasing reliance on domestic recruits (likely raising wage bills).
- Continue H-1B hiring, absorbing the new $100k/year cost and crowding operating budgets.
- Either approach forces a rapid rethink of staffing mixes for an industry that depends on steady access to specialists.
Policy Change Overview
- Fee amount and scope: $100,000 per year per worker, paid in addition to existing charges. Applies to new H-1B entries after the effective date and to new cases processed via consular posts abroad. Does not apply to domestic extensions or status changes.
- Effective date and timing: September 21, 2025, 12:01 a.m. EDT — one day’s notice.
- Operational process: Employers must still file the core petition, Form I-129, Petition for a Nonimmigrant Worker, which contains the H-1B supplement. The proclamation adds a new annual fee for each year of H-1B employment. For official form instructions, see the USCIS page for Form I-129.
- Interaction with current H-1B workers: No impact on existing H-1B workers in the U.S. or those changing to H-1B while in-country.
- Lottery & consular processing: Workers selected in the H-1B lottery who plan to enter the U.S. after the effective date will be subject to the new fee when they complete consular processing and travel.
Why this is unprecedented
Policy watchers call this the sharpest cost increase in H-1B history. Previously, combined standard H-1B fees tended to run from a few thousand to several thousand dollars per case. By comparison, adding $100,000 per worker per year creates a recurring commitment that can rival salary for mid-level roles.
For services firms that rotate staff across projects and rely on H-1B mobility for time-sensitive deployments, this cost can upend long-standing delivery models.
Immediate operational consequences
Industry groups and analysts warn that the one-day switch may disrupt live projects:
- On-site teams scheduled to begin this fall may not arrive or may be delayed as employers reassess headcount and client pricing.
- Finance teams will recast budgets; IT delivery teams may move more work offshore or scale back on-site staffing.
- Short-term US projects could slow while firms rebuild cross-time-zone teams and rework workflows.
Market and earnings implications
- Traders are watching three pressure points: margin compression at services firms, wage bill drift at US tech companies, and project delays from changed staffing plans.
- Initial stock moves (Cognizant, Infosys) reflect investor pricing-in of tighter margins for services firms with large US business.
- US mega-caps may see pressure if analysts expect higher wage bills, slower hiring of niche skills, or delayed projects.
How companies might respond
Analysts and companies are modeling several responses:
- Cap fee-bearing entries per quarter.
- Stagger deployments to match contract renewals.
- Rebuild delivery networks so only client-critical work is onshore.
Industry-specific playbook highlights:
For Indian IT services providers:
– Expect near-term margin pressure.
– Shift more work offshore while keeping critical on-site roles.
– Renegotiate client contracts or re-scope deliverables.
– Increase local US hiring, campus recruiting, and subcontracting.
– Invest in tools to reduce on-site needs (remote collaboration, automated testing, improved handovers).
For US tech companies:
– Weigh the cost of paying the fee against the cost of delays or offshore shifts.
– Maintain H-1B for tightly on-site roles (hardware labs, sensitive data rooms).
– Revisit domestic compensation bands and retention strategies.
– Watch product timeline and opex guidance for signs of impact.
Quantifying the exposure
- Three-year assignment ≈ $300,000 fee exposure per worker (exclusive of salary/benefits).
- Example: 100 new H-1B hires → $10 million annual fee before salaries and other costs.
- For large consulting houses sponsoring thousands, the fee could approach or surpass some business unit budgets.
Industry reactions and commentary
- Seema Srivastava, Senior Research Analyst at SMC Global Securities: the rise “severely impacts both Indian and US-listed IT companies with significant US operations.”
- Sandeep Pandey, Co-founder of Basav Capital: India-based teams often have a better cost-to-output balance; forced replacement with domestic hiring could slow delivery and hurt competitiveness.
- National industry body Nasscom has flagged the risk of disruption and urged companies to review the order’s terms while planning communication with clients.
Legal, HR, and immigration responses
- Immigration and HR teams are checking pipelines: who is abroad, who plans to enter after the effective date, and which roles are essential on-site.
- Finance teams are deciding whether to pause filings, proceed for critical jobs, or renegotiate customer pricing.
- Legal teams are reviewing the proclamation for possible exemptions, tiered structures, or grounds for challenge. Industry groups are considering actions; no official changes have been announced.
Compliance and filing reminders
- Employers must ensure each H-1B case still meets all program rules. The petition process centers on Form I-129 for H-1B classification.
- The proclamation adds a separate annual charge but does not replace reviews of job details, wage levels, or employer-employee relationships.
- Maintain internal compliance: track work locations, update records for role changes, and ensure on-site roles match filings.
For official petition requirements and filing instructions tied to H-1B classification, employers can review the USCIS page for Form I-129.
Longer-term policy debate
- Supporters argue higher costs prioritize US hiring and reduce overreliance on international hires.
- Critics warn the US benefits from global skill flows and that high fees could push high-end work to countries like India, creating a “reverse brain drain.”
- Outcomes will depend on court challenges, potential exemptions, or policy adjustments.
What investors, employers, and workers should watch now
Near-term signals to monitor:
– Company announcements about paused or reduced H-1B entries.
– Changes in onshore/offshore ratios on earnings calls and investor decks.
– Continued stock moves in Indian IT firms and US tech names.
Practical actions:
– Employers: keep immigration counsel involved; check budget exposure for upcoming entries; coordinate with clients.
– Workers: stay in close contact with HR; confirm travel timing, payroll, and work location.
– Investors: watch margin guidance, hiring disclosures, and comments on project timing.
Key takeaway: The H-1B visa fee is now $100,000 per worker per year for new entries after the effective time. It is in addition to traditional costs, does not apply to current H-1B holders or in-country status changes, and will force hard choices for both Indian and US tech employers. Expect near-term strains on margins, hiring plans, and revenue timing as companies respond.
For official details on filing, see the USCIS page for Form I-129.
This Article in a Nutshell
A presidential proclamation increases the H-1B visa fee to $100,000 per worker per year, effective September 21, 2025 at 12:01 a.m. EDT. The fee applies to new H-1B entries and consular-processed lottery selectees, but not to current H-1B holders or in-country status changes. Major Indian IT services firms and US tech companies face immediate cost and operational pressures; estimated combined visa fees for Indian sponsors could rise from roughly $13.4 million to about $1.34 billion, approaching 10% of FY25 net profits. Markets reacted with notable share declines for Cognizant and Infosys. Companies are assessing responses—capping entries, shifting work offshore, renegotiating client contracts, or increasing local hiring—while legal teams and industry groups monitor potential challenges and guidance from USCIS.
