H-1B Crackdown Deepens: Tech Giants and Rural Hospitals Hit Hard

(UNITED STATES) The White House moved sharply to reshape high‑skilled immigration this fall, imposing a $100,000 filing fee on new H‑1B petitions for workers overseas and signaling a shift to merit-based selection in future lotteries. Announced by Presidential Proclamation on September 19, 2025, and paired with stepped‑up enforcement, the policy marks the most sweeping H‑1B crackdown since the program’s creation.

It lands hardest on employers preparing for the next cap season, with registration for FY2027 scheduled to open in March 2026. The fee does not apply to current H‑1B holders, extensions, or transfers, and it does not apply to foreign students already in the United States who secure jobs domestically. But for first‑time overseas applicants, the cost barrier is immediate and steep.

Two tracks: price and policing

The administration’s push has two tracks—price and policing.

• Price: the $100,000 filing fee for new overseas H‑1B petitions.
• Policing: increased enforcement through new audits and scrutiny.

In October, the Department of Labor launched “Operation Firewall”, expanding audits of Labor Condition Applications (LCAs) and coordinating with the Department of Homeland Security (DHS) and Immigration and Customs Enforcement (ICE) to intensify oversight. Employers report a return to high rates of Requests for Evidence (RFEs) from U.S. Citizenship and Immigration Services (USCIS), reviving scrutiny last seen in 2019.

DHS is preparing a proposed rule (expected in December) to move future H‑1B selections toward performance metrics—part of the plan to replace the random lottery with a merit‑based filter.

Industry and geographic impacts

Silicon Valley reacted swiftly. Major platforms and chip makers warned the $100,000 filing fee would:

• Tilt hiring decisions overnight,
• Push new roles abroad,
• Discourage internal transfers into the United States.

Executives say large tech firms can keep teams productive from hubs in Canada and Europe, but U.S. cities will lose network effects when senior engineers and researchers no longer sit together stateside. Some firms have asked staff to explore options abroad, though there are limits to moving complex projects offshore—especially where on‑site labs, sensitive client access, or coordination with U.S. regulators is required.

The shock is more acute away from the coasts. Rural hospitals and clinics that rely on H‑1B workers to fill care gaps say they cannot absorb a $100,000 filing fee in already strained budgets.

“By requiring H‑1B workers to pay an exorbitant $100,000 fee to participate, the administration has effectively shut out teachers, non‑profits, researchers, rural doctors, clergy, and other professionals who simply can’t afford Trump’s elitist revisioning of the H‑1B program,” — Jeff Joseph, President of the American Immigration Lawyers Association.

Non‑profit health systems warn of longer wait times, reduced specialty services, and more cases pushed to emergency rooms—where care costs more and outcomes suffer.

Legal challenge and political debate

A broad coalition—including autoworkers, teachers’ unions, nurse agencies, universities, and churches—filed suit on October 3, 2025, in federal court in San Francisco. Plaintiffs argue the administration overreached by installing a fee Congress never approved and by using audits to deter lawful hiring.

The government’s position:

• The H‑1B was never meant to be a low‑cost pipeline.
• The fee restores program integrity, covers enforcement costs, and steers employers to U.S. workers when available.

The court case will test how much latitude a president has to reshape a capped visa through proclamation and enforcement rather than legislation.

Supporters of the tougher stance call it overdue, arguing long‑running outsourcing and low‑level wage filings depressed conditions for U.S. and foreign workers. Some labor economists (e.g., Ronil Hira at Howard University) say stricter vetting can lift wages for H‑1B employees and reduce bench time tied to staffing models.

Critics warn the policy’s blunt edge will reduce hiring and expansion: if employers can’t fill specialized roles onshore, they will build teams abroad and grow in more welcoming markets. For startups and mid‑sized firms, paying six figures per petition up front may jeopardize payroll and product timelines.

Operation Firewall: practical effects on employers

The Department of Labor’s Operation Firewall has intensified employer risk calculations.

Employers report:

• A new wave of LCA reviews and site visits,
• Requests for payroll and project documents,
• Scrutiny of job titles, location changes, and wage levels,
• Focus on whether “specialty occupations” truly require degree‑level skills.

USCIS has renewed detailed RFEs, adding months to timelines. For small HR teams, the burden is not just the fee but legal costs, risk of missed product milestones, and the chilling effect on candidates weighing offers across countries.

Proposed merit‑based selection: possible criteria

The administration says a merit‑based selection will improve outcomes. Officials have floated metrics that could prioritize:

• Advanced degrees in STEM fields,
• Higher wage levels (at or above prevailing rates),
• Job offers tied to national security and critical infrastructure.

A proposed rule is expected in December, aiming to apply new criteria by March 2026 registration.

Supporters argue this rewards higher‑skill roles; critics reply many essential jobs in healthcare and education don’t fit a narrow wage‑ranked model but remain vital to public needs. The U.S. Chamber of Commerce called the shift and fee “economic self‑sabotage,” noting roughly one‑third of H‑1B visas go to non‑tech occupations that keep schools, hospitals, and labs running.

Exemptions and shifts in hiring pipelines

The fee’s reach is restricted:

• Exemptions: current H‑1B holders (extensions and transfers) and foreign students already in the U.S. transitioning to H‑1B are not subject to the fee.
• This split is redirecting hiring pipelines: employers are focusing more on U.S. campuses and Optional Practical Training (OPT) alumni for entry‑level roles that can lead to fee‑free H‑1B sponsorship.

For candidates abroad—especially in India (whose nationals received 71% of H‑1B approvals in the most recent data)—many are weighing offers in Canada and Europe, where pathways to permanent residency can be faster and fees lower. Analysis by VisaVerge.com indicates employers and individuals are accelerating plans to establish teams outside the U.S.

Health sector specifics

Health systems say the exemptions do little for immediate shortages. Rural hospitals dependent on international medical graduates face a stark choice:

• Pay the fee for new overseas recruits, or
• Leave posts vacant.

Consequences reported:

• Canceled recruitment trips,
• Shelved service expansions,
• Travel nurse agencies squeezed by thin margins,
• University hospitals warning of slowed clinical trials and delayed treatments.

Support roles that do not command top wages risk being screened out by the surcharge.

Practical filing notes and cost estimates

Employers filing H‑1B petitions continue to use Form I-129, Petition for a Nonimmigrant Worker. The agency resource remains:

• Form I-129, Petition for a Nonimmigrant Worker

Attorneys warn that the $100,000 filing fee sits outside the standard fee table. Firms should budget more than $112,000 in total costs for a new overseas H‑1B when accounting for existing charges and legal fees—especially given audit and RFE burdens. With processing queues lengthening, premium processing is increasingly attractive despite added expense.

Broader labor market debate

Proponents of the fee and oversight hope employers will:

• Raise pay to attract U.S. workers,
• Reduce dependence on staffing intermediaries,
• Keep more development work stateside.

Detractors counter that wage floors already exist and that scarcity, not employer unwillingness, is the constraint. They warn of:

• Fewer product launches from longer vacancy periods,
• Loss of anchor teams that drive supplier and spinoff activity.

Experts like Rutgers professor Hal Salzman note limits to offshoring for on‑the‑ground roles, but also that added friction pushes companies to shift work to regions facing fewer barriers.

Congressional response and potential carve‑outs

Early congressional signals show splits driven by district needs rather than party lines:

• Tech‑heavy districts warn of competitive harms.
• Representatives from farming and rural healthcare press for carve‑outs to lower costs for critical access facilities.

Proposals include exemptions for non‑profits and medically underserved areas, but the administration prefers a sector‑neutral merit‑based selection fix. With March 2026 registration approaching, business groups say time is the critical problem.

Employer planning and contingency strategies

Legal counsel recommend employers plan for uncertainty through the next cap season. Suggested strategies include:

1. Model headcount scenarios without new overseas H‑1B hires.
2. Prioritize candidates who qualify for fee exemptions.
3. Prepare for deeper documentation requests under Operation Firewall.
4. Adjust timelines for postdocs and research staff offers.
5. For multinationals, consider relocating roles to countries with clearer permits and permanent residence tracks, then revisit U.S. expansion after litigation and rulemaking resolve.

Universities, school districts, and healthcare employers are already revising recruiting plans and timelines.

Human impact and candidate reactions

For Indian nationals and other overseas candidates, the pivot is personal and professional. Many with U.S. master’s degrees now prefer placements in Canada or Europe for stability. Families with prior U.S. ties report a sense of loss as plans shrink.

Recruiters report:

• Surge in cross‑border inquiries since late September,
• Clients asking for side‑by‑side comparisons of costs, odds, and timelines across countries.

Some candidates ask for remote roles for a year in hope rules soften; others will not gamble on an unpredictable system.

What to watch next

Key near‑term milestones:

• December: DHS proposed rule on merit‑based selection.
• March 2026: Registration window for FY2027 H‑1B cap.
• Ongoing litigation (filed October 3, 2025) that could pause parts of the policy.

Potential outcomes:

• If DHS finalizes criteria favoring wages and advanced STEM degrees, higher‑paid tech roles may still find paths, while hospitals, schools, and research centers lag.
• If the lawsuit gains traction, courts could pause elements of the policy—providing temporary relief but prolonging uncertainty.

Employers must set 2026–27 budgets now; university graduates need clarity months in advance. Without it, companies will continue to hedge and candidates will pursue clear rules elsewhere.

Final considerations

The administration has bet that cost pressure and stricter oversight will narrow the H‑1B program to cases it views as higher value. Business, labor, and education groups foresee a blunter result: fewer hires, more offshoring, and deeper strain on rural and public‑service employers.

Between those poles are the workers—U.S. and foreign—whose careers hinge on timing and policy. As the H‑1B crackdown unfolds, the central questions are:

• Can communities that depend on steady streams of teachers, nurses, and doctors withstand a six‑figure surcharge?
• Will a late‑season move to merit‑based selection clarify the path or simply raise the bar after the race has begun?