H-1B visa: US tech sector scrambles in the face of $100,000 fees

In a research note, Atakan Bakiskan, an economist at the investment bank Berenberg, lowered his estimate for US growth from 2% at the start of the year to 1.5%, saying said the $100,000 H-1B fee is part of the Trump administrations broader anti-growth policymaking.

With the new H-1B policy, the labour force is more likely to shrink than expand going forward, he said. The brain drain will weigh heavily on productivity.

In his executive order, Trump justified the new fee by referring to abuse of the H-1B programme, a nod to longstanding concern across the political spectrum that companies have used the programme to hire foreign staff at lower wages.

His administration is also working on a wider overhaul of the programme, which is typically overwhelmed by applications for the roughly 85,000 new visas available each year, including a proposal to prioritise applications for higher paid workers.

Trumps initial announcement won praise from some, including Netflix co-founder Reed Hastings, who broke from many of his fellow tech leaders, calling the fee a great solution.

Supporters of the change have said the major tech companies, like Amazon and Microsoft, that are the biggest beneficiaries of the programme, have the money to swallow the new charge.

If these are really specialised people, and they‘re bringing in a lot of value, $100,000 shouldn’t be a big deal for those employers, said Ronil Hira, a political science professor at Howard University who focuses on US immigration policy.

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But policies that make it harder for companies to hire skilled positions also often prompt firms to offshore their operations, rather than hire US workers at an equivalent skill level, said Dan Wang, a professor at Columbia Business School focused on global migration and entrepreneurship.

These policies really don‘t have the intended effect of balancing the labour market competitiveness of American workers, Prof Wang said. There’s not a trace of data that suggests that American workers would benefit from this.

Elise Fialkowski is co-chair of the corporate immigration practice at Klasko Immigration Law Partners, which works with both startups and larger corporations.

She said since last week, some of her larger corporate clients - many of which already have subsidiaries or branch offices outside the US - have started to ponder whether to hire talent in Canada, the UK and elsewhere instead.

Trumps executive order almost begs companies to offshore work, she said.

Despite the reprieve, Mr Singh said he was still considering leaving his startup if he could find a job in his home country of India, or elsewhere - Canada, Japan, South Korea - worried the administration will continue to harden policies against immigrants.

There‘s uncertainty now that anything can happen in the future, Mr Singh said. If we are forced out, then that’s the only option were left with.