Biden Ex-Aide Warns L-1 Visa Abuse Risks as H-1B Fees Soar

(UNITED STATES) Ajay Bhutoria, a former adviser to President Joe Biden and a well-known Indian-American community leader on immigration policy, is warning that the new $100,000 H-1B fee will push companies to misuse the L-1 visa program. He says the shift follows President Trump’s September 19, 2025 presidential proclamation restricting H-1B visas and the September 21, 2025 implementation of the steep new fee, which he describes as a dramatic change for skilled foreign workers and the employers who hire them.

In Bhutoria’s view, the price tag will not stop demand for global talent—it will simply move it to other channels, including the L-1 route, where he believes rules are already being ignored. His core argument is straightforward: when the H-1B path becomes unaffordable, employers will look for a workaround.

Why L-1 Becomes Attractive — and Problematic

• The L-1 visa allows companies to transfer employees from foreign offices to related U.S. entities—such as branches, parents, subsidiaries, or affiliates. That makes it an attractive option for multinational firms.
• Bhutoria stresses a critical rule often overlooked: L-1 workers are not supposed to be placed at client sites.
  > “L-1 visa is a company-to-company transfer and they can’t work on the client site but they violate. And now that they can’t do H-1B, they will use L-1 visas,” he said in a recent podcast.

His forecast is blunt: higher H-1B costs will drive more L-1 misuse, and that, he argues, will fuel visa abuse across the market.

Policy Changes Overview

The timeline, as Bhutoria frames it, is key:

1. September 19, 2025 — Presidential proclamation from President Trump restricting H-1B visas.
2. September 21, 2025 — Implementation of the $100,000 H-1B fee.

Immigration lawyers have called the new price point a “pay-to-play” system, and Bhutoria says it will change hiring patterns across industries. He calls the move bold, saying the stated aim is to protect U.S. workers and reduce reliance on lower-cost foreign labor.

• He acknowledges potential benefits: senior IT professionals and recent college graduates may see more opportunities if cheaper H-1B placements decline.
• He also warns of tradeoffs: startups may face severe hiring challenges because the cash outlay to bring in a single H-1B professional is now often unaffordable.

Bhutoria argues that targeted exemptions are needed to keep the U.S. technology ecosystem competitive while still meeting the policy’s stated goals.

The pushback has been loud. The American Immigration Lawyers Association said the policy 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.”

• For these groups, the H-1B fee is more than a burden—it is a barrier that can block hiring altogether.
• The result could be unfilled jobs and stalled projects in hospitals, research labs with thin budgets, and classrooms outside major cities.

Evidence and Patterns of Visa Abuse

Bhutoria’s warnings do not come in a vacuum. He points to visible patterns of visa abuse:

• On a trip three years ago to a large shoemaking facility, he says he found an Indian IT company running a sizable project staffed with workers on B-1 visitor visas—a category not meant for employment.
  • According to his account, these workers spent three months on-site and did not receive regular pay; they were given a lump sum at the end.
  • When he reported this as illegal, authorities reportedly said the activity qualified as “training” allowed under B-1 rules. Bhutoria disagreed, saying it was actual work.

He also describes exploitation by consulting operations he calls “Papa Mama consulting shops” or “body shops”:

• Recruit people from rural parts of India with promises of fast success in the U.S.
• Reality often includes overcrowded housing (many people in a small apartment), gig work (driving or restaurant shifts) instead of professional roles, and kickbacks where workers must hand over 20% of their salaries to placement firms.

These practices, he says, show how quickly some actors will shift tactics when a visa door closes or becomes too expensive to use legally.

The danger with forcing turns to L-1 transfers is that the L-1 visa is designed for intracompany moves, not client-site staffing. Its rules require a qualifying corporate relationship and do not allow placements at third-party client locations. Yet Bhutoria says that guardrail is already being ignored—and will be strained further as companies try to avoid the new H-1B costs.

For employers and workers alike, the line between allowed training and prohibited work under categories like B-1 is not always obvious. Bhutoria’s account underscores how enforcement interpretations can differ from on-the-ground behavior, creating gray areas that invite abuse and leave workers vulnerable.

Impact on Applicants and Employers

Bhutoria’s perspective carries added weight given his background:

• He was involved in President Biden’s 2020 campaign, helping mobilize South Asian voters and raise funds.
• As a Silicon Valley entrepreneur who came to the U.S. on a student visa and moved through the H-1B system, he has pushed for reforms like domestic H-1B visa stamping.

He says companies now face an “impossible choice”—pay the new H-1B price or lean into L-1 visa transfers and risk breaking the rules.

• Major Indian IT companies historically built U.S. models around large numbers of H-1B professionals. With the fee, those firms may have “little choice” but to use L-1 transfers more aggressively.
• Immigration attorneys opposing the fee note it falls hardest on employers outside big tech and finance: non-profits, schools, research institutes, rural clinics, and faith organizations operate on tight budgets and may be unable to absorb a $100,000 H-1B fee.

Bhutoria’s call for “targeted exemptions” reflects a concern that talent loss could extend beyond high-tech to sectors where specialized professionals are critical.

Advocates for stricter rules argue the goal is protecting U.S. workers and ensuring fair wages. Bhutoria concedes some may benefit (older IT workers, recent graduates), but he keeps returning to the unintended consequence: a likely surge in visa abuse as employers shift to L-1 or B-1 categories to fill gaps.

Human Cost and Enforcement Challenges

Bhutoria describes stark human consequences:

• Newcomers who borrowed money to reach the U.S. may be pressured into silence to protect their status.
• Workers may face overcrowded housing, underemployment in gig jobs, and mandatory kickbacks.
• Those most at risk are often the newest, most vulnerable arrivals.

He argues enforcement clarity matters because power imbalances make it hard for workers to report abuses. Without clear, consistent enforcement—especially around L-1 visa placements—cost barriers can push problems into harder-to-monitor areas.

For readers seeking official details, Bhutoria points to the U.S. government’s page on L-1 classifications. See the USCIS overview at: USCIS: L-1 Intracompany Transferee.

According to analysis by VisaVerge.com, public debate about the new H-1B fee and its ripple effects continues among employers and worker communities, focusing on how companies will adjust hiring plans and transfer strategies.

Proposed Solutions and What Comes Next

Bhutoria’s message is both critique and prescription:

• He supports reforms that make it easier to hire needed talent while closing loopholes that invite misuse.
• He insists enforcement must be consistent and clear, particularly around L-1 visa placements.
• He calls for pathways or exemptions for startups and mission-driven employers that cannot absorb outsized costs.

He warns that without such adjustments, the market will find informal workarounds and workers will suffer. What happens next depends on how agencies and employers respond to the proclamation and fee.

“When legal routes become too expensive, the system does not get cleaner; pressure moves elsewhere, and the risk of visa abuse grows,” he argues.

Bhutoria favors a path that protects both U.S. workers and foreign professionals: cost protections for small firms, strict clarity around L-1 visa rules, and enforcement that targets misuse rather than blocking entire classes of employers from hiring essential talent.