Effective September 21, 2025, entry of new H-1B workers will be restricted for 12 months unless employers pay a $100,000 fee — a response to years of program abuse that saw IT outsourcing firms secure tens of thousands of visas while American companies laid off over 40,000 workers, even as foreign STEM employment surged to 2.5 million.
The H-1B nonimmigrant visa program, originally designed to temporarily bring high-skilled workers into the United States, has faced significant criticism for being misused as a replacement for American workers with lower-paid foreign laborers. This large-scale abuse has compromised U.S. economic and national security.
Over recent years, employers have been accused of exploiting the H-1B program to suppress wages and subsequently disadvantage American citizens in the labor market. This manipulation has especially impacted critical fields such as science, technology, engineering, and mathematics (STEM). The foreign workforce in STEM in the U.S. surged from 1.2 million to almost 2.5 million between 2000 and 2019, while overall STEM employment increased by only 44.5%. In 2019 alone, foreign workers represented 26.1% of the workforce in computer and math occupations, a significant rise from 17.7% in 2000.
The information technology (IT) sector has been notably implicated, with the portion of H-1B visa holders in IT rising from 32% in Fiscal Year 2003 to over 65% in the past five fiscal years. Consequently, IT outsourcing companies reliant on H-1B visas have become prolific employers. Businesses take advantage of the lower wage costs by outsourcing jobs previously held by American staff to foreign workers, using the savings from the reduced labor costs incentivized by the H-1B program.
This practice has not only made it harder for college graduates to secure IT positions but has also contributed to higher unemployment rates among U.S. computer science and engineering majors. A study by the Federal Reserve Bank of New York highlighted that the unemployment rates for computer science and computer engineering graduates stood at 6.1% and 7.5%, respectively—significantly higher than those for recent graduates in fields like biology and art history.
Several American tech companies have faced criticism for laying off skilled American workers while simultaneously bringing in thousands of H-1B workers. In Fiscal Year 2025, one software company was granted over 5,000 H-1B visas while announcing the layoff of more than 15,000 employees. Another IT firm approved for nearly 1,700 H-1B workers laid off 2,400 American workers in Oregon. A further example saw a company reducing its American workforce by roughly 27,000 from 2022 onwards, while acquiring over 25,000 H-1B visas.
There have been reports of American IT workers being forced to train the foreign workers replacing them, with severance conditioned on signing nondisclosure agreements. This indicates that H-1B visas are not necessarily being utilized to fill labor shortages or recruit uniquely skilled workers unavailable domestically.
The high influx of relatively low-wage workers using the H-1B visa system undermines not only the program’s integrity but also the wages and employment opportunities for American workers, especially at entry levels in sectors where such foreign workers are concentrated. This misuse limits other industries’ access to the visa program to fill roles for which qualified American workers are unavailable.
Concerns over national security have also been raised, with domestic law enforcement agencies investigating H-1B-reliant companies for potential visa fraud and other criminal activities. Moreover, the misuse of the program discourages American citizens from pursuing careers in science and technology, potentially threatening the U.S.’s leadership in these industries. A 2017 study indicated that, without the importation of foreign workers into computer science fields, wages for American computer scientists could have been 2.6% to 5.1% higher, and employment in these fields could have been 6.1% to 10.8% higher in 2001.
In response, higher costs will be imposed on companies utilizing the H-1B program, ensuring its abuse is curtailed while still allowing the entry of exceptionally skilled foreign workers. Immediate measures have been deemed necessary to protect the economic and national security interests of the United States. Therefore, the unrestricted entry of specific foreign workers, as described in section 1 of a new presidential proclamation, is deemed harmful to U.S. workers by undercutting their wages.
Henceforth, the entry of nonimmigrants under the H-1B program is restricted unless their applications are accompanied by a supplementary $100,000 payment. This restriction is set to expire after 12 months unless extended. Specific exceptions will apply if the Secretary of Homeland Security determines that hiring certain foreign workers is in the national interest and does not compromise U.S. security or welfare.
Employers will be required to document payments made for H-1B petitions and coordinate with the Departments of State and Homeland Security to ensure compliance. Recommendations on whether to extend these restrictions will be formulated following the completion of the upcoming H-1B lottery.
The Department of Labor is tasked with revising wage levels to align with the proclamation’s goals, while Homeland Security seeks to prioritize high-skilled and high-paid nonimmigrant admissions.
This proclamation, effective from midnight EDT on September 21, 2025, does not intend to create enforceable legal rights or subsidies for any parties, nor shall it interfere with existing legal authorities possessed by federal agencies or the Office of Management and Budget.
Source: Original article
