What the H1-B Visa Mess Says About Trump 2.0
Immigration visas might be an obscure topic for corporate compliance officers, but we should spend some time today examining the changes President Trump just announced for holders of H1-B visas. It’s emblematic of so much that we encounter in this messy Trump 2.0 Administration.
Here’s what happened. On Friday evening, Trump announced a new $100,000 fee for holders of H1-B visas. These are the visas that many corporations (technology companies in particular) use to bring highly skilled workers from overseas into the United States, ostensibly because the companies can’t find suitably skilled American workers to do the job.
Under current law, the United States awards 85,000 H1-B visas every year, and recipients are chosen by lottery since the number of people who want an H1-B far exceeds the 85,000 available. Applicants first pay a $215 fee to enter the lottery; if they win a slot, they then pay another $5,000 (plus personal legal fees) to secure the visa itself.
Now comes Trump, imposing a $100,000 fee on every H1-B visa effective today. When the president first announced the fee on Friday evening, the language of the order wasn’t clear about whether the new fee applied to existing H1-B visa holders who might currently be outside the country. That sparked a panic across corporate HR and legal teams, who started warning their H1-B visa holders that if they happened to be outside U.S. borders, they needed to get back into the United States double-quick.
Even worse, Commerce Secretary Howard Lutnick stood next to Trump and said, multiple times, that the $100,000 fee would need to be paid every year. That would leave many jobs predicated on H1-B visas no longer economically viable.
The White House has since communicated that the fee will only apply to new H1-B applicants, not existing H1-B visa holders; and that the $100,000 will be a one-time fee, not annual. But if you were an H1-B visa holder outside the United States right now, with your employment and immigrant status on the line, would you put all your faith in U.S. border agents correctly interpreting this policy?
That’s where things stand today. Now let’s consider why this mess is worth a compliance officer’s attention.
The Trump 2.0 Approach to Regulation
The H1-B overhaul neatly captures Trump‘s approach to business regulation in several important ways.
First, it’s arbitrary. People have called for reform to H1-B visas for years, but nobody was expecting this reform. No rule change was proposed for public comment. No guidance was prepared for companies to consider. Nobody was expecting this reform now, and Trump announcing the fee on a Friday evening is a tell that the few advisers who did know it was coming knew it would be controversial.
Quite simply, Trump blind-sided companies with this news. It’s an example of how policy change in this administration erupts from Trump’s id, rather than flows from carefully developed proposals.
Second, it ignores the realities of how businesses work. Trump’s theory of the $100,000 fee is that by making H1-B visas so expensive, companies won’t bring highly skilled foreign workers into the United States; instead, they’ll invest that money into training U.S. workers.
Umm, no. This move could just as well drive global companies to export the high-skilled work they need done to the high-skilled labor overseas. For example, if you need to spend $1 million to bring 10 H1-B visa employees into the United States, you could instead spend that money opening an overseas office and sending U.S. managers to train the foreign workers there. Or if Americans won’t go, the company could bring managers from yet another country to train the foreign workers.
To be clear, Trump’s beef with H1-B visas isn’t wrong. Some companies do bring foreign workers into the United States to learn highly skilled jobs, then send those workers back to their home country and lay off the American workers still here. That abuse needs attention. This fee, however, is a bureaucratic blunt instrument. It won’t work well in the intricate world of modern business.
Perhaps if Trump had pursued a more deliberate approach, with a public notice and comment period, we could have arrived at something more feasible, such as a sliding scale depending on company size or a forbearance program for companies that keep jobs in the United States.
Instead, we have this confusing mess. Then again, what else should we expect from a man who failed at pretty much every business he ever tried?
Third, a mechanism for corruption is built into the policy. Specifically, Section 1(c) of Trump’s proclamation allows for the $100,000 fee to be waived at the discretion of the Secretary of Homeland Security:
The restriction imposed pursuant to subsections (a) and (b) of this section shall not apply to any individual alien, all aliens working for a company, or all aliens working in an industry, if the Secretary of Homeland Security determines, in the Secretary’s discretion, that the hiring of such aliens to be employed as H-1B specialty occupation workers is in the national interest and does not pose a threat to the security or welfare of the United States.
So a company can avoid paying these fees. All it needs to do is ask the Trump Administration.
Well, does anyone really expect those waivers will be granted on a fair and equitable basis? Because if you do, I have a bridge to sell you. It’s inevitable that to some extent, and possibly to a great extent, waivers will be granted depending on how much your company (a) demonstrates political loyalty to Trump or (b) just bribes him by buying into one of his crypto ventures.
The Bewildering New Normal
As I mentioned earlier, I know H1-B visas aren’t a core issue for compliance officers — but how Trump has handled H1-B visa regulation so perfectly captures this Administration’s approach to regulation writ large, that we’re foolish to ignore it.
Arbitrary, internally inconsistent, built for corruption: those are the themes of Trump 2.0. They fit just as easily whether we’re talking about immigration, tariffs, energy policy, government contracting, enforcement against corporate misconduct, and lots more.
That’s no way to govern the most important country in the world, but it’s the reality Trump is foisting upon corporations everywhere: an endless series of regulatory and enforcement landmines tossed into your path at random intervals. It’s going to have a profound effect on your workforce, your corporate culture, and the strategies you use to try to comply with regulations.
And that’s just the way it is in Trump 2.0, until this administration comes to a close.