The White House issued a major clarification on Saturday to its new H-1B visa policy that had rattled the tech industry, saying a $100,000 fee will be a "one-time" payment imposed only on new applicants.
US Commerce Secretary Howard Lutnick, in announcing the major fee increase on Friday, said it would be paid annually, and would apply to people seeking a new visa as well as renewals.
But White House Press Secretary Karoline Leavitt issued a clarification on Saturday, hours before the new policy went into effect. "This is NOT an annual fee. It's a one-time fee that applies...only to new visas, not renewals, and not current visa holders," she said in a social media post.
A White House official told PTI that the USD 100,000 fee will first apply in the upcoming lottery cycle. It does not apply to 2025 lottery winners.
The executive order, which is likely to face legal challenges, came into force on Sunday at 12:01 am US Eastern time (0401 GMT), or 9:01 pm Saturday on the Pacific Coast.
Prior to the White House's clarification, US companies were scrambling to figure out the implications for their foreign workers, with several reportedly warning their employees not to leave the country.
Some people who were already on planes preparing to leave the country on Friday de-boarded over fears they may not be allowed to re-enter the United States, the San Francisco Chronicle reported.
"Those who already hold H-1B visas and are currently outside of the country right now will NOT be charged $100,000 to re-enter," Leavitt said.
"H-1B visa holders can leave and re-enter the country to the same extent as they normally would," she added.
The politics over H-1B program
H-1B visas allow companies to sponsor foreign workers with specialized skills --- such as scientists, engineers, and computer programmers -- to work in the United States, initially for three years but extendable to six.
Such visas are widely used by the tech industry. Indian nationals account for nearly three-quarters of the permits allotted via lottery system each year. The United States approved approximately 400,000 H-1B visas in 2024, two-thirds of which were renewals.
Notably, US President Donald Trump announced the change in Washington on Friday, arguing it would support American workers.
The H-1B program "has been deliberately exploited to replace, rather than supplement, American workers with lower-paid, lower-skilled labor," Trump's proclamation said. "The main thing is, we're going to have great people coming in, and they're going to be paying," Trump told reporters as he signed the orders in the Oval Office.
Lutnick, who joined Trump in the Oval Office, said multiple times that the fee would be applied annually. "The company needs to decide... is the person valuable enough to have $100,000 a year payment to the government? Or they should head home and they should go hire an American," he told reporters.
Though he claimed that "all the big companies are on board," many businesses were left confused about the details of the H-1B order.
Meanwhile, the Ministry of External Affairs on Saturday said the mobility of skilled talent had contributed to "innovation" and "wealth creation" in both countries and that it would assess the changes.
It said in a statement the new measure would likely have "humanitarian consequences by way of the disruption caused for families," which it hoped would be addressed by US authorities.
The announcement has dealt a body blow to the 2,83,397 (71%) skilled technology workers from India, as per 2024 data. At 71%, India was the largest beneficiary of the H-1B visa program last year, while China was a distant second at 12%.
According to US Citizenship and Immigration Services (USCIS) data, Amazon was the top H-1B visa employer with 10,044 workers as of June 2025, followed by Tata Consultancy Services (TCS) with 5,505 visas approved.
Other top beneficiaries included Microsoft (5,189), Meta (5,123), Apple (4,202), Google (4,181), Deloitte (2,353), Infosys (2,004), Wipro (1,523) and Tech Mahindra Americas (951).
Critics say H-1B visas undercut American workers
H-1B visas, which require at least a bachelor's degree, are meant for high-skilled jobs that tech companies find difficult to fill. Critics say the program undercuts American workers, luring people from overseas who are often willing to work for as little as $60,000 annually. That is well below the $100,000-plus salaries typically paid to US technology workers.
Historically, H-1B visas have been doled out through lottery. This year, Amazon was by far the top recipient of H-1B visas with more than 10,000 awarded, followed by Tata Consultancy, Microsoft, Apple and Google. Geographically, California has the highest number of H-1B workers.
Critics say H-1B spots often go to entry-level jobs, rather than senior positions with unique skill requirements. And while the program isn't supposed to undercut US wages or displace US workers, critics say companies can pay less by classifying jobs at the lowest skill levels, even if the specific workers hired have more experience.
As a result, many US companies find it cheaper to contract out help desks, programming and other basic tasks to consulting companies such as Wipro, Infosys, HCL Technologies and Tata in India and IBM and Cognizant in the US. These consulting companies hire foreign workers, often from India, and contract them out to US employers looking to save money.
