Beyond the $100K fee: The H-1B reform that might actually matter

By Aneela Mirchandani

(This story is done in partnership with the URL Collective)

The Takeaways

📉 Trump’s H-1B proclamation includes a little-noticed clause to raise wage standards for foreign workers, potentially reducing undercutting of U.S. labor.

🧠 Policy expert Ron Hira applauds the wage reform, calling it the most impactful change—more significant than the headline-grabbing $100K visa fee.

🔍 The move could curb outsourcing abuses and prioritize truly skilled talent, aligning with bipartisan calls for H-1B reform and protecting both U.S. and foreign workers.

The Details

A little-noticed clause in President Donald Trump’s recent proclamation affecting the skilled worker visa, otherwise known as the H-1B, could prove very beneficial to American workers, says a policy expert and longtime critic of the program. The clause in question mandates revamping H-1B worker wages.

Ron Hira, the author of Outsourcing America and an associate professor of political science at Howard University, has long argued that the H-1B, as it is currently designed, not only harms US workers, it is also unfair to the foreign workers brought in under the program. 

Several of his policy papers written for the left-leaning Economic Policy Institute make the case that flaws in H-1B rules make it vulnerable to being misused by American employers to do the very thing the visa was supposedly designed to guard against — undercut the US worker with lower paid foreign labor. His co-authored 2019 policy paper for the Atlantic Council describes several cases of US companies hiring cheaper foreign labor and in some cases, requiring workers to train their own replacements. The paper suggests ideas for reform. 

Trump’s Sept. 19 proclamation attracted a great deal of attention due to the new $100,000 fee imposed for each skilled worker entering under the program. As it was framed as a “restriction on entry,” it drove panic among H-1B holders who happened to be travelling, and a rush to get back into the country before the two day deadline. Subsequent announcements from the administration clarified that the fee would only apply to future petitioners, not current visa holders. 

However, Hira said in an interview with AsAmNews, while the fee was an attention-grabbing headline, it is unlikely to survive in its current form. 

“I think it’s a complete distraction,” Hira said, “and maybe it’s done on purpose to be a complete distraction.” Groups will be jockeying for exemptions, and the fee will be challenged by multiple stakeholders. In fact, a lawsuit filed in the US District Court in San Francisco last week does just that. Hira believes it is possible no one will end up paying the fee in the end. 

However, he applauded the other steps signaled in the proclamation for their pro-worker impact. The wage levels the Department of Labor currently uses to ensure that H-1B workers are not underpaid relative to the market will be revamped, thus ensuring that the workers are actually bringing special skills, not ordinary skills abundantly available in the US. 

“That’s the number one most important thing,” Hira said.  

The administration also intends to move away from using a random lottery to determine who is selected to receive a visa from among the vast number of petitioners each year, instead prioritizing higher wages. 

Hira has been invited several times to share his expert analysis in Congressional hearings. Senators across the political spectrum — including Sen. Chuck Grassley (R-IA), Sen. Dick Durbin (D-IL), and Sen. Bernie Sanders (I-VT) have supported reform of the H-1B along the lines that Hira has suggested. 

The preamble of the White House proclamation, Hira suggests, is spot-on in its diagnosis of the problem — that the H-1B visa is poorly regulated and easy to exploit. As a matter of fact, it echoes his own. 

***

The H-1B visa is a skilled guest worker program instituted through the Immigration Act of 1990. From the start, it was meant to complement the American workforce with skilled labor from abroad — while also protecting US workers. To ensure this, the program has built-in safeguards: an annual cap of 85,000 visas per year, with validity only good for three years, with one potential renewal — and a requirement that companies attest that they will pay the foreign worker on par with what they would pay an American. It is meant to ensure that companies will recruit foreign labor only if they are unable to fill that need with US workers.

The program has been used by all kinds of employers: hospitals, universities, and companies seeking IT workers. Many do use the program for exactly the purpose for which it was designed. 

For example, Pam Bullock, a manager at the Feinberg School of Medicine who handles H-1B applications for foreign scientists, explained why the university hires them. 

“Why not just hire Americans? Very good question,” Bullock explained in a public post. “In theory it sounds great, but medical research is both highly specialized and highly collaborative…. Professor(s) search for the top people doing similar work, to bring them together in one lab and increase the chances for success.” These foreign scientists are often recruited through ads placed in scientific journals, Bullock explained in an email to AsAmNews. 

The majority of H-1B visas go to IT workers — around 65%, according to a Pew report from March, and of these, according to data from the USCIS, California bags the biggest share. Also according to the Pew report, a whopping three-quarters of H-1Bs approved in 2023 went to foreign workers from a single country — India. China was a distant second.

This is not a surprise. A Statista report suggested that India produces the most technical graduates per year among all nations: and of these, almost 90% have English proficiency. The annual income an Indian software engineer working in India can expect — an amount that ranges from $4,000 to $20,000 per year — is vastly lower than what they can expect to be paid in America.

At the same time, top US tech companies have benefited enormously from Indian engineers. Sundar Pichai, the CEO of Google, and Satya Nadella, the CEO of Microsoft, both were once H-1B visa holders from India. 

***

Debate on the H-1B visa has raged almost since the very beginning. 

Proponents tout the economic benefit of skilled immigration to the US. “High-skilled immigration is America’s not-so-secret weapon,” begins a paper from the Economic Innovation Group that argues for widening the program. 

Rajal Shah, a VP of Engineering at a Silicon Valley tech firm whose organizations have hired hundreds of H-1B engineers, insists that the hiring process is scrupulously fair. 

“That is the beauty of America, it believes in merit,” Shah said in a phone interview with AsAmNews. Shah himself is a first-generation immigrant from India. “[While hiring] we never had a quota system for immigrants or US workers. We always hire on merit based on what the law allows.” 

However, critics like Hira point out that it is what the law allows that is the problem.

A common misconception held by many is that in order to get an H-1B petition approved, an employer has to prove that they made a good faith effort to recruit American workers for the position first. 

That is not true in the vast majority of cases, Hira explained in the interview. In order to successfully petition for an H-1B hire, the employer merely has to attest that the foreign worker will make the prevailing wage that is appropriate for the profession, the location, and the level of the job. 

However, as Hira has argued in a 2020 paper, the wage levels set by DOL allow firms to game the system by selectively choosing lower levels for foreign workers. 

But even those minimal protections are voided when the employer uses an outsourcing business model — a perfectly legal practice where a US firm relies on foreign consulting companies to supply temporary workers. In a notorious case from 2015 reported by the New York Times, Disney laid off 250 IT workers in Orlando and replaced them with cheaper outsourced workers who were officially employees of two Indian firms, HCL and Cognizant. The US workers had been forced to train their own replacements. 

“[The laid off workers] complained first to the DOL, then they sued,” Hira said. “And the DOL said, no, everything is cool. If Disney had hired the H-1B worker, you’d have a case. But because they laundered the H-1B through the outsourcing firm, all the protections disappear for you.”

The outsourcing companies, often derided as “bodyshops,” have gained a reputation for gaming visa rules in any way they can. They are known in the tech industry as the “WITCH” companies, an acronym for the biggest such Indian firms: Wipro, Infosys, TCS, Cognizant, and HCL. 

Many proponents of skilled immigration do not see a problem with this practice, seeing outsourced labor as ultimately redounding to the benefit of US companies, allowing them to quickly spin up a team when needed. 

“It’s based on what the US company needs,” Logan Ullyott, founder of Compass Visa, said in an interview with AsAmNews. “Let’s say they need developers or designers or product managers that have experience and can hit the ground running. Market forces dictate [who] should be hired.”

***

But the Trump proclamation of Sept. 19 has nothing to say about the main problem with the H-1B, Hira said, which, as he puts it — is that the so-called skilled immigration has no immigration in it. 

The H-1B visa does not have a path to a green card. 

Since the worker’s visa is tied to the employer, they enjoy a great deal of power over a compliant workforce, turning them into a “captured underclass.” 

While employers can choose to sponsor a foreign worker for a green card, immigration quotas limit how many each country can get. In practical terms, this means H-1B holders from India can spend more than a decade in limbo, indentured to the employer who sponsored their green card application. 

“Guest workers don’t have the same rights, and they’re easily exploited, both in terms of wages and working conditions, while the employer is dangling the carrot of a green card,” Hira said. “That doesn’t just harm the guest workers, it also harms the U.S. workers that are competing with them.”

Most H-1B holders have been unwilling to speak up about the havoc this plays with their lives, fearful of the consequences, fearful that their social media might be monitored. 

One H-1B holder, an engineer working for a large Silicon Valley tech firm who was granted anonymity to share her views with AsAmNews, bemoaned the humiliating rituals Indian workers are made to undergo, despite, in her words, being a “model minority” who have helped Silicon Valley achieve trillions of dollars in net worth. 

In her experience, Indian engineers work harder. “This is an intensely capitalistic field. If you come in at nine and leave at five, that’s not going to get the job done.” Immigrants, she said, with more on the line, display more of that work ethic. And yet, H-1B holders are put through the “mental torture” of unforgiving visa rules.

Shah believes Trump’s proclamation will have the desired effect of shielding US workers from competing with a global workforce. But, he said, dismissing talent as disposable is short-sighted. It pushes young engineers to go elsewhere to build the next Google. 

“America needs to build talent inhouse to rewire the economy for the AI future,” he said. “This is an inflection point. We have to fight to sustain this country that has given us so much.”