Trump’s US$100k visa fee spurs confusion and chaos

Wall Street banks and tech companies big and small were scrambling on Sept 20 to figure out how their tens of thousands of employees would be affected by US President Donald Trump’s proclamation imposing a US$100,000 (S$130,000) fee for visas granted to skilled foreign workers.

The change set off immediate confusion over the exact rules and how they would be enforced.

Shortly after Mr Trump

signed the proclamation on Sept 19

, employees at Microsoft, Amazon and JPMorgan received notices advising those with H-1B visas who were outside the US to return before the new rules take effect at 12.01am Eastern time (12.01pm Singapore time) on Sept 21.

The Trump administration sought to address the confusion on Sept 20 by saying that the fee would apply only to new applicants, and renewals or

current visa holders would not be affected

.

In a post on social media, the White House said the change would “not impact the ability of any current visa holder to travel to/from the US”.

Still, many executives, general counsel and human resources departments, as well as their immigration lawyers, said they are coming down on the side of caution.

Several companies and attorneys urged workers to return to the US as soon as possible. Many kept their eyes glued on the White House social media accounts for any pertinent clarification.

“We acknowledge that this is an uncertain time for our people on H-1B visas and your families,” Ms Jacqueline Arthur, head of human capital management at Goldman Sachs, wrote in a memo on Sept 20 to employees.

The memo said Goldman is working with its lawyers “to review the specifics of the order as more detail becomes available to communicate with you accordingly”.

Mr Bernhard Mueller, co-chair of the immigration practice group at Ogletree Deakins, said he was flooded with calls from executives and corporate board members about the new rules and how to communicate with employees.

“There’s a lot of question marks all over this,” he added early on Sept 20. “We are still flying in somewhat foggy conditions.”

Late on Sept 20, the US Citizenship and Immigration Services issued a memo underscoring that Mr Trump’s proclamation applied only “prospectively to petitions that have not yet been filed”.

Still, the policy change represents a significant overhaul of how the US distributes what are known as H-1B visas. The visas, which play a crucial role in helping employers fill jobs in the tech industry and beyond, have been at the centre of a deep immigration debate.

Immigration hardliners contend that the visa programme hurts Americans because companies have brought in foreign workers at lower wages, while many business leaders said the scheme helps US companies stay competitive.

White House officials said the policy change will help ensure that companies are giving priority to hiring domestic workers.

“President Trump promised to put American workers first, and this common sense action does just that by discouraging companies from spamming the system and driving down wages,” said Ms Taylor Rogers, a White House spokeswoman.

But executives and industry trade groups said they worry about how the steep fee will affect businesses’ ability to fill crucial positions.

A spokesman for the US Chamber of Commerce said it is working with the Trump administration and its members to “understand the full implications and the best path forward”.

“We’re concerned about the impact on employees, their families and American employers,” said Mr Matt Letourneau, a spokesman for the chamber.

Mr Adam Kovacevich, founder and chief executive of Chamber of Progress, a left-leaning tech industry policy coalition, said he expects that firms will have to reassess their entire approach to the H-1B visa programme. He worries over how the change could affect the nation’s competitiveness in fields including artificial intelligence (AI).

“I think this is going to mean that we’re fighting the artificial intelligence war against China with one hand tied behind our back,” he added. “There is a limited number of top talent in AI, and some of that is foreign-born.”

The change is widely expected to be met with lawsuits.

Mr Jeff Joseph, president of the American Immigration Lawyers Association, said it is working with other groups to file a legal challenge seeking a temporary restraining order.

He added that the organisation was making strategy calls over the weekend and working on finding plaintiffs who represent a wide range of industries.

Mr Benjamin Johnson, executive director of the association, said the group’s members are “dealing with chaos” as their clients scramble to understand the change. “I’m just hearing confusion and panic,” he added.

Although tech companies receive the most H-1B visas, Mr Johnson underscored that the new fee will also affect workers in the medical and manufacturing industries, as well as at universities.

“The number of companies and industries where H-1B workers play a really critical role is incredibly broad,” he said.

Some workers who are abroad said they are unsure about how to immediately respond.

A 29-year-old software engineer, with a stamped H-1B visa set to begin in less than 20 days, was tucked into bed in his Munich apartment early on Sept 20 when he realised he might be stuck in Germany.

Speaking before the government’s clarification on how the visa fee would be applied, the software engineer, who is an Indian citizen with a German work visa, said he felt “clueless” about how to proceed.

He spoke on condition of anonymity because he was worried about his visa status. His company told him to stay put.

In its e-mail to employees on the evening of Sept 19, Microsoft, which has roughly 5,200 employees in the programme, said workers in the US should remain there “for the foreseeable future”, even if this interrupts travel plans.

“The critical thing is to stay in the US in order to avoid being denied re-entry,” the advisory noted.

Some policy experts praise the Trump administration’s change, saying it will help ensure that companies are not suppressing wages or giving priority to hiring foreign workers over Americans.

Ms Lora Ries, director of the Border Security and Immigration Centre at the Heritage Foundation, a conservative think-tank in Washington, said the US$100,000 fee is a “good start” at reforming the H-1B programme because it will make companies prioritise which foreign workers they want to hire.

“Americans aren’t getting a fair shake at the opportunities because too many employers are bending the system,” she added.

But the policy change also raises concerns about the long-term impact on the US economy and corporate America.

Venture capitalists warned that the change will add to concerns surrounding an uneven playing field, with only the nation’s largest companies being able to pay the fees or secure an exemption, as technology giants including Apple and Nvidia have done with certain tariffs.

The challenges of complying may be particularly acute for start-ups, many of which operate for years without reaching profitability.

“There is not a single company that I have invested in the last 10 years that could afford to pay this,” said venture capitalist and private equity investor Alan Patricof.

The government caps H-1B visas at 85,000 a year, and visa holders can also bring in their immediate family in a related programme. The vast majority are

typically granted to Indian citizens

.

The Indian government issued a statement on Sept 20 saying it is determining “the full implications” of the new visa rules.

The Ministry of External Affairs said: “This measure is likely to have humanitarian consequences by way of the disruption caused for families.”

Mr Mukesh Aghi, chief executive of the US-India Strategic Partnership Forum, said he reached out to some of the 450 companies in his membership for their opinion on the organisation’s next steps.

“We understand our administration’s position that they want to avoid misuse of H-1B – and we support that,” he added.

“But at the same time, we just want to make sure that in the process, companies which are creating jobs here do not get penalised.” NYTIMES