Trump immigration rule could make H-1B visa holders too expensive for US employers to hire: What you need to know

The Trump administration has announced a new immigration rule that could significantly increase the cost of hiring H-1B visa holders and employment-based immigrants in the US. The plan, included in a presidential proclamation, introduces a $100,000 fee for many H-1B visa holders. The Department of Labor (DOL) is expected to publish a wage rule that will raise the minimum salaries employers must pay foreign workers, echoing attempts from Trump’s first term.

H-1B visas are a critical pathway for high-skilled international talent, especially for graduates from US universities. Research shows international students make up 73% of full-time graduate students in electrical and computer engineering. With an annual H-1B cap of 65,000 and an additional 20,000 for those with master’s degrees or higher from US institutions, only a fraction of the workforce benefits from this program. Employers already pay government fees exceeding $6,000 and must meet the higher of actual or prevailing wages for comparable US workers.


How the new rule changes H-1B and EB-3 costs
The presidential proclamation states that the $100,000 fee would be prohibitive for employers hiring new H-1B visa holders. However, US Citizenship and Immigration Services clarified that the fee does not apply to workers changing visa categories within the US, such as moving from F-1 student status to H-1B status. The rule affects both H-1B visa holders and applicants for employment-based green cards, including EB-3 workers.

The Trump administration has previously attempted similar reforms. DOL rules published on October 8, 2020, and January 14, 2021, raised minimum salary levels for foreign workers but were blocked by courts for violating the Administrative Procedure Act. The new rule is expected to follow a similar framework, inflating prevailing wages to levels that many employers may find unaffordable.

Prevailing wage increases under the rule
The new DOL system redefines the prevailing wage, which is the minimum an employer can pay a foreign national. Level I positions, which are entry-level, would see salaries jump significantly, with some positions reaching $208,000 annually. Software developers in San Jose, San Francisco, and other cities would face wage requirements 62% higher than current market rates. In New York, financial analysts could be required to earn more than three times the private market wage.

Vic Goel of Goel & Anderson told Forbes, “The Department of Labor’s OEWS wage levels reflect experience, supervision, and responsibility. Level I is entry-level, while Level IV requires greater independence and judgment.” He explained that the revised formula pushes even Level I salaries to the equivalent of previous Level II positions, while higher levels increase as well.

Potential impact on employers and foreign workers
Analyses by the National Foundation for American Policy show that the first DOL wage rule would have raised Level I salaries by 39% to 45%, making it too expensive for employers to hire H-1B visa holders or sponsor high-skilled immigrants. The rule could affect thousands of positions across multiple industries, including technology and healthcare. Forbes quoted NFAP findings stating that the rule “would likely lead employers to hire individuals outside the US or not at all.”

Economists have criticised the justification for the rule, noting that H-1B visa holders typically earn the same or higher wages than comparable US-born workers. Madeline Zavodny, a University of North Florida professor, in conversation with Forbes, said, “Empirical evidence indicates that workers who hold an H-1B visa are typically paid at least as much as similarly employed US-born workers.”

The Trump administration’s new regulations aim to change both visa fees and wage requirements simultaneously, potentially reshaping the cost and availability of high-skilled international talent in the US.
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