(Bloomberg/Madlin Mekelburg) — A federal judge said the Trump administration can move ahead with a $100,000 fee on new H-1B visa applications, providing a setback for US technology companies that rely on hiring skilled foreign workers.
US District Judge Beryl Howell said in a ruling Tuesday that President Donald Trump’s effort to radically increase the cost of the popular visa is lawful. The decision gives a boost to the administration’s campaign to restrict immigration and push demand for US workers. The US Chamber of Commerce, which sued to block the proposal, can appeal.
Howell rejected the Chamber’s argument that Trump doesn’t have the power to impose the fee, finding that his proclamation was issued under “an express statutory grant of authority to the President.”
Congress has given the president broad authority that he used to address “in the manner he sees fit, a problem he perceives to be a matter of economic and national security,” she wrote.
Daryl Joseffer, the Chamber’s executive vice president, said in a statement the $100,000 fee makes H-1B visas cost prohibitive.
“We are disappointed in the court’s decision and are considering further legal options to ensure that the H-1B visa program can operate as Congress intended: to enable American businesses of all sizes to access the global talent they need to grow their operations,” Joseffer said.
The Chamber, the nation’s largest business lobbying group, argued in its October lawsuit that raising the fee is unlawful because it overrides federal immigration law and exceeds the fee-setting authority afforded by Congress.
A group of 19 state attorneys general also is challenging Trump’s proclamation. Their lawsuit focuses on the projected impact to the public sector, particularly in the fields of health care and education, that also rely on the H-1B visa program. A separate suit was filed by a global nurse-staffing agency.
The ruling Tuesday, a so-called summary judgment that doesn’t require a trial, doesn’t have an impact on the other lawsuits, meaning another judge could still block the new visa fee in the months to come. The other cases include a suit filed in Massachusetts earlier this month by more than a dozen mostly Democratic-led states, as well as a suit filed in October in California by a global nurse-staffing agency and several unions.
Both of the other cases are also being handled by Obama appointees, and neither judge has yet ruled on any requests for injunctions against the rule. A hearing in the California case is set for Feb. 12 in Oakland. The dispute is likely to ultimately be resolved by the US Supreme Court.
The H-1B visa program is a cornerstone of employment-based immigration, allowing companies in the US to hire college-educated foreign workers for specialized occupations. In September, Trump signed a proclamation to increase the application fee to discourage companies from abusing a program that he claimed displaces US workers.
It’s a stark shift from America’s historical stance toward immigration. Since its founding, the US has welcomed people from diverse countries and economic backgrounds who come to the US in search of a better life and more freedom.
Yet while Trump and Commerce Secretary Howard Lutnick have mused about the prospects of a windfall for the US Treasury that could total $100 billion or more, immigration attorneys have cautioned that an increase in cost of this magnitude would cause major disruptions that would be likely very expensive to the US economy.
“This puts a chilling effect on America’s employers,” said Michael Wildes, a managing partner at the New York-based immigration law firm Wildes and Weinberg PC. “How can you make America great by taking away the talent pool?” Wildes noted that “it’s a limiting law in that America will skip a beat. There will be a generation of talent out there in the world that will go to other countries. We will be missing an opportunity and that is foolhardy.”
Also on Tuesday, the US Department of Homeland Security said it will replace the lottery for choosing H-1B visa applicants with a weighted selection to overcome wage arbitrage and incentivize American employers “to petition for higher-paid, higher-skilled foreign workers.” There are also proposals being considered to impose a wage floor.
H-1B visas are awarded based on a lottery system, but are used primarily in the tech industry. Amazon, Tata Consultancy Services Ltd., Microsoft, Meta Platforms Inc. and Apple Inc. are among the companies with the greatest number of H-1B visas, according to the US government.
The visa fees will shape hiring efforts, but affect some jobs and companies more than others, said Alexis DuFresne, founder of recruiting firm Archer Search Partners, which specializes in recruitment for alternative financial asset managers.
For “superstars” in highly-paid, specialized roles, or for jobs that generate a lot of revenue, organizations will be willing to pay the $100,000 fee, she said.
But the high cost will change how people making hiring decisions approach looking for employees in more run-of-the-mill jobs, DuFresne said. “If you’re going to search, you’re going to tell the search people ‘Don’t look globally for me. Look domestically for me,’” she said of such common jobs.
Likewise, organizations with offices around the world will be able to respond to the recruitment costs by shifting where they hire, according to DuFresne. “The firms that it’s going to affect the most are the smaller firms,” she said.
The tech industry has been adapting to changes in US immigration rules for a while now as political currents shift.
Alphabet Inc.’s Google is taking steps to help move employees off of H-1B visas and onto more permanent status. The company recently told staff it will be “ramping up” PERM applications next year for eligible employees, Business Insider reported, taking a crucial step to securing a green card, which allows them to live and work permanently in the US.
Beyond the US tech companies, the action also hits India hard, as Indians have been the biggest beneficiaries of the H-1B visa program. In addition to the extra costs that Indian IT companies will bear for thousands of employees on such visas, the ongoing unpredictability has unnerved many Indian professionals working in US tech, finance, health care and other industries, especially after the recent mass postponement of work-visa appointments.
The case is Chamber of Commerce vs. US Department of Homeland Security, 25-cv-03675, US District Court, District of Columbia (Washington).
–With assistance from Jake Bleiberg, Erik Larson and Patrick Howell O’Neill.
(Updates with expert comments in 14th paragraph.)
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