Trump extends the $100,000 H-1B fee by a year and orders tighter vetting of employers
Outsourcing firms' H-1B registrations fell 92% in a year. Is the $100,000 fee here to stay?
Published 20 September 2026. Written by Pratidin from the reports linked at the end; every fact checked by a separate review before publishing. How we work
On 18 September 2026 U.S. President Donald Trump signed a proclamation, 'Restriction on Entry of Certain Nonimmigrant Workers', continuing for another year the restriction first imposed by Proclamation 10973 of 19 September 2025. It now runs until 12:00 a.m. eastern daylight time on 21 September 2027. Under it, entry of H-1B workers is restricted except for petitions accompanied or supplemented by a $100,000 payment, subject to very limited exceptions: the Secretary of Homeland Security may exempt cases where hiring such workers is in the national interest. The Hindu reported that the order does not apply to foreigners already in the U.S. on student visas or to renewals of current visas. The fee has faced legal challenges since it was first announced.
The same day, Mr. Trump signed an executive order on 'Enhancing Program Integrity and Interagency Coordination in the Administration of the H-1B Nonimmigrant Visa Program'. It states that the programme 'has been widely abused by certain employers, third-party placement groups, and outsourcing firms'. Agencies must now consider whether an employer 'directly or indirectly engaged in layoffs within the previous year or plans future layoffs' affecting similar U.S. workers, and the Secretary of Labor must begin reviewing data on past labour condition applications within 30 days. The proclamation cites results of the first year: the largest IT staffing and outsourcing firms cut their combined H-1B registrations from 24,946 to 2,055, a 92% fall, and the share of registrants with at least a U.S. Master's degree rose from 45.1% for FY 2026 to 66.1% for FY 2027. The Department of Homeland Security has also moved to a weighted selection that favours higher-skilled, higher-paid applicants.
The H-1B visa lets U.S. employers hire foreign professionals in 'specialty occupations' that need at least a bachelor's degree. The law caps new visas at 65,000 a year, plus 20,000 for holders of U.S. Master's or higher degrees. Indians are the largest group of H-1B beneficiaries, so the fee and the vetting order fall most heavily on Indian professionals and on Indian IT services companies that send staff to client sites in the U.S. The U.S. administration says the steps protect American workers from being undercut. Critics argue that they worsen skill shortages and push work offshore; for India, the likely effects include fewer onsite postings, more local hiring by Indian firms in the U.S., and more work delivered from India.
Prelims facts
- A U.S. proclamation of 18 September 2026 extends the $100,000 H-1B payment requirement of Proclamation 10973 (19 September 2025) until 21 September 2027.
- A companion executive order directs agencies to weigh an employer's layoffs in the previous year, or planned layoffs, when handling H-1B cases.
- The largest IT staffing and outsourcing firms cut combined H-1B registrations from 24,946 to 2,055, a 92% fall, according to the proclamation.
- The H-1B annual cap is 65,000, plus 20,000 for holders of U.S. Master's or higher degrees.
- Indians are the largest group of H-1B beneficiaries.
Quick recall
- When did the U.S. extend the $100,000 H-1B payment rule?
- 18 September 2026, until 21 September 2027.
- Which proclamation first imposed the $100,000 H-1B payment?
- Proclamation 10973 of 19 September 2025.
- Who can grant a national interest exemption from the H-1B payment rule?
- The U.S. Secretary of Homeland Security.
- What is the annual H-1B cap?
- 65,000, plus 20,000 for holders of U.S. Master's or higher degrees.
- By how much did the largest IT outsourcing firms cut H-1B registrations?
- From 24,946 to 2,055, a 92% fall.
- What new factor must U.S. agencies weigh under the September 2026 executive order?
- Whether the employer made layoffs in the previous year or plans layoffs affecting similar U.S. workers.
- Which U.S. law provision lets the President suspend entry of a class of foreigners?
- Section 212(f) of the Immigration and Nationality Act.
- Which group is the largest among H-1B beneficiaries?
- Indians.
Prelims practice question
With reference to the H-1B visa of the United States, consider the following statements:
1. It is meant for workers in 'specialty occupations' that generally require at least a bachelor's degree.
2. The proclamation of September 2026 abolished the annual cap on H-1B visas.
Which of the statements given above is/are correct?
- 1 only
- 2 only
- Both 1 and 2
- Neither 1 nor 2
Show answer
Answer: (a) 1 only. Statement 1 is correct: H-1B covers specialty occupations needing at least a bachelor's degree or equivalent. Statement 2 is incorrect: the proclamation extends the $100,000 payment requirement; the statutory cap of 65,000 plus 20,000 remains.
Use this in UPSC Mains: previous-year questions
Recurring theme: Protectionism in developed economies and its effect on India's services exports and diaspora
- How to use this
Gives a services-side example of protectionism hitting India, with its measurable effects and India's possible responses.
- A US proclamation of 18 September 2026 extends the $100,000 H-1B payment requirement until 21 September 2027, and a companion order makes agencies weigh employers' layoffs.
- The largest IT staffing and outsourcing firms cut combined H-1B registrations from 24,946 to 2,055, a 92% fall, according to the proclamation.
- Suggest raising mobility in trade talks, seeking totalisation of social security and diversifying destinations to Europe and East Asia.
- How to use this
Shows how curbs on skilled migration can affect India's services earnings, remittances and IT delivery model.
- Indians are the largest group of H-1B beneficiaries, so the $100,000 fee and layoff-linked vetting fall most heavily on Indian professionals and IT services firms.
- Note that slower migration may weaken a key source of remittances and diaspora links.
- List likely effects for India: fewer onsite postings, more local hiring by Indian firms in the US and more work delivered from India.
Mains practice question
Rising restrictions on skilled migration in developed countries affect India's economy and its diaspora. Discuss with reference to recent changes in the U.S. H-1B programme. (150 words)
Model answer
On 18 September 2026 the U.S. extended its $100,000 H-1B payment requirement until September 2027 and ordered agencies to weigh employers' layoffs in H-1B cases.
Effects on India
- IT services: onsite postings become costly; outsourcing firms' registrations fell 92% (24,946 to 2,055).
- Professionals: Indians, the largest H-1B group, face fewer and costlier opportunities.
- Students: U.S. degrees gain weight, as Master's holders rose to 66.1% of FY 2027 registrants.
- Remittances and diaspora: slower migration may weaken a key source of remittances and diaspora links.
Possible gains
- More high-value work delivered from India and growth of offshore centres.
- Return of skilled talent to Indian start-ups and research.
India's response
- Raise mobility in trade talks and seek totalisation of social security.
- Diversify destinations (Europe, East Asia).
- Build domestic research and innovation capacity.
India must turn a migration setback into a push for domestic value creation.
The basics
Why this matters
For two decades the U.S. has been the top destination for India's software engineers, and the H-1B visa programme has been the main door. A year ago, the U.S. put a $100,000 payment on new H-1B entries. It has now extended that rule by a year and added tighter vetting of employers. The change touches India's IT exports, its students and the Indian diaspora and remittances.
What the H-1B is
The H-1B lets a U.S. employer hire a foreign professional for a 'specialty occupation' that needs at least a bachelor's degree. Each year only 65,000 new visas are available, plus 20,000 for holders of U.S. Master's or higher degrees. Because applications far exceed the cap, visas are allotted by a lottery of registrations.
- 1ProclamationExtends the $100,000 payment rule of Proclamation 10973 until 21 September 2027
- 2National interest exemptionSecretary of Homeland Security may exempt specific cases
- 3Executive orderAgencies must weigh an employer's recent or planned layoffs
- 4Labour data reviewSecretary of Labor to start reviewing past labour condition applications within 30 days
The legal tool
The payment rule rests on Section 212(f) proclamations, a power in U.S. immigration law that lets the President suspend the entry of any class of foreigners found detrimental to U.S. interests. Checks on wages run through the Labour condition application that every H-1B employer must file.
What changed in one year
The proclamation itself reports the effect of the first year of the fee and a new weighted lottery that favours higher-paid, higher-skilled applicants.
- Stops outsourcing firms from undercutting U.S. wages
- Protects workers after tech layoffs
- Shifts visas to higher-skilled applicants
- Worsens skill shortages in U.S. firms
- Pushes work offshore rather than creating U.S. jobs
- Hits Indians, the largest group of beneficiaries
The takeaway
The H-1B is becoming a visa for fewer, better-paid, U.S.-educated workers. For India that means fewer onsite jobs but more pressure, and opportunity, to deliver high-value work from home.
Go deeper
In one line: The U.S. has extended its $100,000 payment rule for new H-1B workers until September 2027 and told agencies to weigh employers' layoffs when handling H-1B cases.
Why it matters for UPSC
GS2 asks about the 'effect of policies and politics of developed countries on India's interests' and the Indian diaspora. The H-1B is the clearest example: a U.S. domestic rule that shapes India's IT exports, jobs and remittances.
The core idea
The H-1B visa programme lets U.S. firms hire foreign graduates in specialty jobs. Using Section 212(f) proclamations, the President made new entries conditional on a $100,000 payment in 2025 and has now extended it. A new executive order ties vetting to layoffs and to wage records in the Labour condition application. Because Indians are the largest group of beneficiaries, the effect runs straight into the Indian diaspora and remittances.
Numbers and dates to remember
- Proclamation 10973: 19 September 2025. Extension: 18 September 2026, until 21 September 2027.
- Payment: $100,000 per petition, with a national interest exemption.
- Outsourcing firms' registrations: 24,946 to 2,055 (92% fall).
- U.S. Master's holders: 45.1% (FY 2026) to 66.1% (FY 2027) of registrants.
- Cap: 65,000 plus 20,000.
Where to go next
- H-1B visa programme: how the visa and lottery work.
- Section 212(f) proclamations: the President's entry-restriction power.
- Labour condition application: the wage check behind every H-1B.
- Indian diaspora and remittances: what is at stake for India.
Go deeper: protection or self-harm?
The U.S. administration's case. The executive order says the programme has been 'widely abused' by outsourcing firms that undercut U.S. workers. The proclamation presents the results as proof of success: outsourcing firms' registrations fell 92%, and the share of registrants with U.S. Master's degrees rose to 66.1%. Linking vetting to layoffs aims to stop firms from replacing laid-off U.S. staff with cheaper visa workers, and wage checks in the Labour condition application are meant to reinforce this.
The critics' case. Critics argue that the H-1B visa programme fills genuine skill gaps. A $100,000 charge prices out start-ups and smaller employers, and work may simply move offshore. Legal challenges question whether Section 212(f) proclamations can be used to impose what is in effect a fee, though the U.S. Supreme Court read the entry power broadly in Trump v. Hawaii (2018).
For India. The costs are real: fewer onsite postings, uncertainty for students, and pressure on a pipeline that has built the Indian diaspora and remittances. But the shift also pushes Indian IT firms to hire locally in the U.S. and to deliver more work from India, which could deepen India's own technology base. A balanced answer notes both, and suggests that India raise mobility of professionals in trade negotiations, sign social security totalisation agreements and diversify destinations.
H-1B visa programme
How the main U.S. work visa for professionals works.
In one line: The H-1B is a temporary U.S. work visa that lets employers hire foreign professionals in specialty occupations requiring at least a bachelor's degree.
How it works
The employer, not the worker, applies. U.S. law caps new H-1B visas at 65,000 a year, with another 20,000 for people holding U.S. Master's or higher degrees; some employers such as universities are outside the cap. Because demand is far higher than supply, employers register candidates and visas are allotted by a lottery. The Department of Homeland Security has now moved to a weighted selection favouring higher-skilled, higher-paid candidates.
Why Indians dominate
India's large pool of engineering graduates and its IT services industry, which sends staff to client sites in the U.S., have made Indians the largest group of beneficiaries.
Why it is in the news
The $100,000 payment rule has been extended to September 2027, and vetting of employers tightened.
Where to go next
Section 212(f) proclamations
The U.S. President's power to restrict entry of foreigners.
In one line: Section 212(f) of the U.S. Immigration and Nationality Act lets the President, by proclamation, suspend or restrict the entry of any class of foreigners whose entry would be detrimental to U.S. interests.
How broad it is
The provision lets the President act for as long as he considers necessary and impose any restrictions he thinks appropriate. In Trump v. Hawaii (2018), the U.S. Supreme Court upheld a travel ban issued under this power, reading it broadly.
How it was used for H-1B
Proclamation 10973 of 19 September 2025 restricted entry of H-1B workers unless their petitions came with a $100,000 payment. The 18 September 2026 proclamation, which cites Sections 212(f) and 215(a), continues this until 21 September 2027. Critics say using an entry power to impose what works like a fee goes beyond what Congress intended.
Where to go next
Labour condition application
The wage check every H-1B employer must file.
In one line: A labour condition application (LCA) is a filing with the U.S. Department of Labor in which an H-1B employer attests to the wages and working conditions it will offer.
What the employer promises
The employer must pay the H-1B worker at least the higher of the actual wage paid to similar employees or the prevailing wage for the job in that area, and must confirm that hiring will not adversely affect the working conditions of U.S. workers. Prevailing wages are set in levels based on skill and experience; low levels have been criticised for allowing cheaper hiring.
Why it is in the news
The September 2026 executive order asks the Secretary of Labor to begin reviewing data on previously submitted LCAs within 30 days, and the Labor Department is also revising prevailing wage rules. Together these aim to stop visa workers being used to undercut U.S. wages.
Where to go next
Indian diaspora and remittances
What India stands to lose, and gain, from U.S. visa curbs.
In one line: The Indian diaspora is the community of people of Indian origin and Indian citizens living abroad, and the money they send home (remittances) is a major source of foreign exchange for India.
Why it matters
India is the world's largest recipient of remittances. The diaspora in the U.S. is among the most highly skilled and prosperous, built over decades through student and work visas such as the H-1B. It also shapes India-U.S. ties through business, technology and politics. India marks Pravasi Bharatiya Divas on 9 January, the date Mahatma Gandhi returned from South Africa in 1915.
The H-1B link
Curbs on H-1B visas slow the flow of new professionals, may reduce future remittances from the U.S., and add uncertainty for Indian students. At the same time, returning talent and more offshore work can strengthen India's own technology sector.
Where to go next
Take the 20 September 2026 quiz: 30 Prelims-style questions with answers