H-1B Visa System “Spammed With Fraud”: Trump Administration Defends $100,000 Fee

Introduction

In a major shift in United States immigration policy, the Donald Trump administration has announced that companies sponsoring new H-1B visas must pay a fee of USD 100,000. The move has triggered multiple lawsuits, widespread concern in the tech sector, and a fierce defence by the White House. Government officials argue the H-1B programme has been abused, wages for American workers have been undercut, and sweeping reforms are needed. The controversy is now at the centre of a legal and policy battle over how the US admits skilled foreign workers.

The New Fee and Its Rationale

On September 19, 2025, President Trump signed a proclamation titled “Restriction on Entry of Certain Non-immigrant Workers.” The proclamation stated that for petitions filed between September 21, 2025, and September 21, 2026, an additional fee of USD 100,000 will be levied on employers applying for a new H-1B visa. Reports indicate that Indian nationals make up around 71 % of approved H-1Bs in recent years, giving the change a global-impact dimension. The White House press secretary, Karoline Leavitt, said the move is intended to protect American workers and stop a system that has been “spammed with fraud … and that’s driven down American wages.” She added that the administration views the hike as lawful and necessary, and will defend the policy in court.

What Is the H-1B Programme?

The H-1B visa category allows U.S. employers to sponsor foreign workers in specialised occupations, typically in IT, engineering, science, and certain academic roles. Each year the programme caps the number of visas at 65,000 ordinary visas plus 20,000 additional for holders of advanced U.S. degrees. Historically companies have used the programme to fill gaps in the domestic skilled-worker labour market. The programme has often been criticised, however, for being used to undercut wages, replace U.S. workers, or favour cheaper labour from overseas.

Why the Fee Is Controversial

The four-figure jump in fee from previous levels has caused alarm across business, tech and immigration communities. Critics say the hike is not tied to processing costs, but functions effectively as a barrier or tax on hiring foreign workers. Business groups such as the U.S. Chamber of Commerce argue the fee will make the H-1B route “cost-prohibitive for U.S. employers, especially start-ups and small and midsize businesses” and could sever access to global talent that drives innovation. Furthermore, legal experts and unions contend that the fee may exceed the President’s executive authority under the Immigration and Nationality Act (INA) and may violate statutory limits on how fees can be used or calculated. The ruling may hinge on whether the fee is seen as regulating visas or effectively acting as a tax without congressional approval.

The Administration’s Defence

The Trump administration has made three main claims in its defence:

1. The H-1B system has been “spammed with fraud” over the years, meaning false filings, shell companies, misuse of the visa category and wage suppression.

2. The fee is aimed at protecting American workers by ensuring companies hiring foreign talent pay a meaningful cost, thus discouraging substitution of foreign labour where domestic workers are available.

3. The policy is lawful because it uses existing presidential and executive powers to regulate non-immigrant entry and to set conditions on visas in the national interest.

Karoline Leavitt emphasised that “the administration will fight these lawsuits in court” and asserted that the president’s main priority has always been to “put American workers first” and strengthen the visa system.

Legal Challenges and Industry Push-Back

Since the fee was announced, numerous lawsuits have been filed. The U.S. Chamber of Commerce launched a major suit in October 2025 in the U.S. District Court for the District of Columbia, alleging the fee violates the INA and exceeds presidential powers. Unions, employer groups and religious organisations have joined other suits in California and Washington D.C. These suits argue that the fee will harm U.S. competitiveness, innovation and small businesses and may ultimately reduce job creation in high-tech and specialised sectors. Some industry players believe the real outcome will be fewer opportunities for foreign workers and increased labour costs for U.S. companies.

Global and Indian Implications

Because Indian professionals account for a large share of H-1B visa holders, the policy has significant ramifications for India-U.S. relations, global talent flows and the U.S. tech ecosystem. India’s government has expressed concern, calling the move disruptive and arguing it may harm Indian nationals and U.S. industries alike. The rise in fee may also shift talent flows to other countries such as Canada, the U.K. or Australia. Global businesses may rethink where they locate operations or how they hire overseas talent. The ripple effect extends beyond immigration, touching trade, technology investment, and bilateral ties.

Potential Impacts on Employers and Workers

For employers, especially in the technology, startup, healthcare and academic sectors, the fee presents a new cost-barrier. Smaller firms may decide not to sponsor foreign workers or may shift hiring strategies. The fee could reduce access to highly skilled labour, increase reliance on automation, offshore work, or limit expansion altogether. For foreign professionals, the hike may restrict access to U.S. employment opportunities, delay career plans or redirect talent flows. Some may abandon U.S. job offers, delay relocation, or opt for countries with more welcoming visa regimes. The fee may also prompt some applicants to seek alternative immigration pathways.

Road Ahead and What to Watch

Much depends on how the courts rule. If the fee is struck down, it may be rolled back, and reforms could instead come via Congress or regulatory change. If upheld, the fee may become part of a broader realignment of U.S. high-skilled immigration policy. Key aspects to monitor in coming months include:

• Whether the fee actually leads to measurable reduction in visa misuse or wage suppression.

• How U.S. companies adjust hiring practices, especially in tech, AI, healthcare and research.

• The reaction of global talent and the extent to which professionals shift to other countries.

• Any new regulatory or legislative measures supplementing or modifying the policy, such as merit-based selection, wage minima or alternate visa categories.

• The position taken by Congress and whether they move to codify reforms to the H-1B programme, potentially limiting executive unilateral action.

Conclusion

The Trump administration’s move to impose a USD 100,000 fee on new H-1B visa petitions marks a shift from incremental reform to sweeping change in U.S. high-skilled immigration policy. The policy is framed by the White House as necessary to protect American workers and crack down on fraud. Industry and legal advocates view it as a blunt instrument that may hamper innovation and hurt U.S. competitiveness. As the legal battle unfolds, the broader question is whether the H-1B system will be fundamentally reshaped—either by the courts, by business push-back or by legislative action. For now, the message is clear: the visa system that once symbolised access to U.S. opportunity is entering a new era of scrutiny, cost and uncertainty. In that landscape, both foreign professionals and U.S. employers will need to navigate a changed terrain, where global talent, domestic labour priorities and immigration policy intersect in complex ways.