What does Trump’s latest H-1B directive state? | Explained

The story so far: On September 19, U.S. President Donald Trump signed a proclamation increasing the fee for processing H-1B visas by about 60 times to $1,00,000. The White House underlined that the objective was to help “curb abuses that displace U.S. workers and undermine national security”. A tentative calm returned when Washington clarified the revised fee would only be for new applications, starting September 21, and not for present visa-holders or those up for renewal.

Also read: The Hindu’s coverage on U.S. work immigration visa fee hike and its impact

What is the purpose of the hike?

The entire contestation revolves around the perception that the H-1B visa programme was leading to a “disadvantageous labour market for American citizens”. The H-1B programme seeks to help employers in the U.S. obtain crucial skills and abilities, not existing within the current local workforce, by authorising them to temporarily bring certain specialised talent from overseas to work in the U.S. However, the White House argues the programme has been exploited to make it challenging for U.S. STEM graduates to find jobs. This is because companies prefer to hire foreign workers at a “significant discount”. It has been misused to the extent where tech companies have fired their domestic workforce in favour of H-1B workers, the White House alleges.

What’s the argument for legal migration?

In a survey conducted by the U.S.-based think tank Pew Research Centre in 2024, about 40% of respondents believed high-skilled workers should be given top priority for legal immigration. About 60% of respondents said legal immigrants fill jobs that U.S. citizens do not want. Further, Daniel Aobdia, former professor of accounting information and management at the Kellogg School of Management (U.S.), had investigated these questions in 2016 with respect to H-1B workers hired as auditors. He observed that the workers, most of whom attended U.S. schools, took jobs in “less desirable offices or that [which] require highly specialised skills”. Thus, he inferred, “they complement — rather than displace — U.S. workers”. His research came across no evidence that hiring more H-1B workers lowered wages at these offices. However, he cautioned this may not be true for foreign-educated H-1B holders in the U.S. employed at outsourcing firms.

According to data from the U.S. Citizenship and Immigration Services (USCIS), Amazon.com is the most prominent employer of H-1B employees, followed by the India-based Tata Consultancy Services, Microsoft, Meta and Apple. India was the top beneficiary of the H-1B programme in 2024, accounting for 71% of approved beneficiaries. The U.S. approved more than 2.8 lakh Indian H-1B workers, across varied sectors, at the end of 2024, according to data from the USCIS. The agency had given approval to approximately 4 lakh applicants during the period; of these, it approved only about 1.4 lakh applicants for initial employment. If the USCIS receives more registrations than the visas provisioned for the year, it runs a lottery to determine eligibility.

Pro-immigration advocacy group American Immigration Council observes that the presence of skilled legal immigrants ensures that businesses expand their operations in the U.S. itself than searching for avenues overseas. Further, it also notes that immigrants are known to create new businesses and helping expand the labour market. Prominent examples being Elon Musk (South African and Canadian descent) and Sergey Brin (Russian migrant who founded Google with Larry Page). Additionally, H-1B holders are not just contributors to the more business-centric sectors but also civic essentials like medicine and health, as well as educational and scientific research. In a letter to the Secretary of Homeland Security, Kristi Noem, post the directive, the American Medical Association (AMA) emphasised the “growing need for [a] larger physician workforce that the U.S. cannot fill on its own”.

Why is immigration a ‘problem’ in the U.S.?

In his order, President Trump quoted a 2017 study that stated that wages for native U.S. computer scientists would have been 2.6%-5.1% higher with employment being approximately 6.1%-10.8% higher (in 2001) in the absence of an immigration regime. It is interesting to note that the same study, authored by professors from the University of Michigan and University of Chicago, stated immigration helped lower prices and raised the output of IT goods by 1.9%-2.5%, benefitting consumers.

The story is, however, not that simple. Earlier this year, the U.S. Equal Employment Opportunities Commission (EEOC) was learnt to be investigating Mumbai-headquartered TCS for discrimination in favour of H-1B workers. Bloomberg reported last December that at least 33 former employees had filed complaints at the EEOC alleging they were fired in favour of hiring Indian workers. TCS dismissed the allegations as “meritless and misleading”. In fact, the U.S.-headquartered IT solutions provider Cognizant too found itself mired in similar allegations (in 2017). The company was also accused of firing non-South Asians at “disproportionally high rates”. It did not receive a favourable verdict and sought to challenge it at an “appropriate time”.

Reforming the H-1B programme to curb alleged misuse has traditionally had bipartisan support from both Democrats and Republicans. Democrats, including senator Bernie Sanders, have maintained the need to reform the regime to address “low-wage indentured servants from abroad”. “The cheaper the labour they hire, the more money the billionaires make,” he had said.

What lies ahead?

Ajay Srivastava, founder of the Global Trade Research Initiative (GTRI), in The Hindu’s ‘Parley’ podcast earlier this week, pointed out that the hike in visa fee makes it almost impossible for anyone to be hired, except top STEM graduates. “No U.S. company is going to take a risk given the vitiated political environment,” he observed. But Mr. Srivastava also pointed at a “little-known” clause in the directive, which allows for a waiver if the applicant serves in a project of “national importance”. Immigration lawyers say lawsuits to challenge the directive is inevitable. In a Facebook post, U.S.-based Immigration lawyer Karin Wolman said the proclamation was “drafted badly” and obfuscated processes. She argues that while the President has the power to execute a travel/entry ban, any collection of fees would have to be formally established as being “reasonably related to agency costs”. Further, they can only be put out with a formal notice supported by a consultation over a period before being instituted.

Mr. Trump’s directive comes against a larger backdrop of tariff-related tensions between the U.S. and India. Industry body Nasscom holds that with the revised fee effective with the next round of lottery expected in March, companies in the U.S. would have time to step up skilling programmes and enhance local hiring, which has already increased “tremendously”.

Published – September 28, 2025 02:43 am IST