Hiring H-1B Visa Holders Gets Costlier Due to Increased Fees

Hiring and retaining foreign-born scientists and engineers in the United States is becoming increasingly expensive for employers, with recent federal actions, such as the U.S. Citizenship and Immigration Services fee rule, driving up costs. Despite assertions about “cheap labor,” employers face significant fees and are required by law to pay H-1B professionals as much as comparable U.S. workers. The registration process for the FY 2025 H-1B cap begins on March 6, 2024.

The USCIS published a final rule on January 31, 2024, increasing many government fees. Employers will see a 70% rise in fees for H-1B beneficiaries, a 201% increase for L-1 employees, and a 129% hike for O-1 individuals. Additionally, a new $600 Asylum Program Fee will be enacted, along with a 2,050% increase in the H-1B Electronic Registration Fee per beneficiary.

According to Lynden Melmed of BAL, larger clients could face filing fee cost increases of 115% to 175% in the first year of the new fee schedule. Overall, legal and government fees for filing initial H-1B petitions and extensions could exceed $33,000 per employer, not including costs for sponsoring employees for permanent residence.

Most companies are expected to spend around $9,400 for a first-time H-1B visa holder under the new fee structure. Filing an extension for an H-1B professional could raise costs to about $18,000, with additional costs incurred for changes in location. Employers also face increased processing times and additional attorney fees for Requests for Evidence from USCIS.

Employers have paid over $6 billion in H-1B fees over the past two decades, funding scholarships for U.S. students in science and technology fields and job training for U.S. workers. The new $600 asylum fee has raised concerns, as it lacks a clear connection to employment-based immigration and may lead to litigation.

Attorneys argue that the high costs reflect the demand for the skills of foreign-born professionals in the U.S. labor market. However, if costs continue to rise, employers may offshore these jobs, benefiting other countries’ economies at the expense of the U.S.

To gain approval for an H-1B petition, employers must pay at least the prevailing wage level for the specific employment, which may be higher than the actual wage level paid to other individuals with similar experience and qualifications. Some argue that mandating the average wage for everyone in an occupation would lead to paying inexperienced individuals the same as experienced professionals, potentially discouraging hiring international students or requiring significantly higher salaries.

Studies have shown that H-1B visa holders earn the same or more than comparable U.S. professionals and do not harm U.S. workers. The average annual salary for an H-1B visa holder in computer-related occupations in 2022 was $129,000, with a median salary of $123,000. Additionally, many immigrants in the U.S. earn more than U.S.-born individuals, with foreign-born individuals representing almost 20% of the top 1% of wage earners.

The substantial fees employers pay when hiring foreign-born scientists and engineers in the U.S. indicate they view these individuals as valuable assets.