What Is the H-1B Visa and Why Does It Matter for Tech?
The visa program that channels skilled foreign workers into America's technology sector faces its biggest policy shift since 1990.
The H-1B visa is the primary legal pathway for skilled foreign workers to fill specialty occupations in the United States, particularly in technology, engineering, and science.
Created by the Immigration Act of 1990, the program allows 85,000 new workers annually—65,000 through a general cap, plus 20,000 reserved for those holding advanced degrees from U.S. institutions. Congress designed the H-1B to enable employers to hire temporary foreign workers in specialty occupations, defined as roles requiring theoretical and practical application of highly specialized knowledge and a bachelor’s degree or higher.
Recent policy changes have thrust the program into the spotlight. In September 2025, President Trump issued a proclamation requiring H-1B petitions filed after September 21, 2025, to include an additional $100,000 payment. A federal judge in December 2025 ruled the Trump Administration can move ahead with the $100,000 fee on new H-1B visa applications, creating material cost pressures for companies that rely on foreign talent to power innovation.
How the H-1B Program Works
The H-1B is an employer-sponsored visa with a multi-stage application process. Since March 2020, USCIS uses a registration process where employers register electronically before knowing if a visa will be available, reducing the burden of submitting complete petitions upfront. From fiscal years 2008 to 2020, the annual H-1B cap was reached within the first five business days on eight occasions, forcing USCIS to conduct lotteries.
Employers must attest on a labor condition application certified by the Department of Labor that hiring the H-1B worker will not adversely affect wages and working conditions of similarly employed U.S. workers. The initial H-1B classification typically lasts three years and may be extended for a maximum of six years.
The FY 2027 H-1B cap registration opened at noon Eastern on March 4, 2026 and ran through March 19, 2026, during which petitioners paid a $215 registration fee for each beneficiary. About 400,000 H-1B applications were approved in 2024, peaking in 2022 at 442,425 applications. Since 2013, the majority of approvals each year have been renewals—in 2024, 65% were renewals versus 35% new applications.
Who Uses H-1B Visas
Indian nationals accounted for 72 percent of all H-1B visa approvals in fiscal year 2023, according to USCIS. Amazon has been the employer with the most H-1B workers approved each year since 2020, receiving more than 11,000 H-1B approvals in fiscal 2023. In FY 2022, Amazon Services had 12,444 total H-1B beneficiaries approved, followed by Tata Consultancy Services with 9,981, Google with 8,440, and Microsoft with 7,210.
| Company | Approvals |
|---|---|
| Amazon (all entities) | ~10,000 |
| Tata Consultancy Services | 5,505 |
| Microsoft | 5,189 |
| Meta | 5,123 |
| Apple | 4,202 |
| 4,181 |
Concentration among top employers is significant. The top 30 H-1B employers—representing 0.001% of employers that hired a new H-1B worker—hired more than 34,000 new H-1B workers in 2022, accounting for 40% of new H-1B visas available under the annual cap, according to Economic Policy Institute.
Between FY 2009 and 2022, there was an annual average of approximately 115,000 initial and 214,000 continuing approvals. Professional, Scientific, and Technical Services accounted for half of total initial approvals each year on average since 2009.
Economic Impact and Controversy
The H-1B program generates fierce debate about its effects on American workers and economic innovation. Absent the influx of foreign computer scientists, U.S. computer scientists would have earned between 2.6 and 5.1 percent more and employment in computer science for U.S. workers would have been 6.1 to 10.8 percent higher in 2001, according to National Bureau of Economic Research.
However, broader effects appear positive. The reduction in labor costs associated with this program spurred growth and innovation in the computer science sector and increased productivity in the economy as a whole, with lower labor costs enabling new companies to enter the field. Between 2005 and 2018, an increase in the share of workers within a particular occupation who were H-1B visa holders was associated with a decrease in the unemployment rate within that occupation.
- Higher rates of successful H-1B applications correlated with increased patents filed, patent citations, and greater likelihood of startups securing venture capital funding and achieving successful IPOs
- Restrictions on H-1B visas motivate U.S.-based multinationals to decrease domestic jobs and increase employment at foreign affiliates—particularly in India, China, and Canada
- A one-percentage-point rise in the share of H-1B workers in an occupation is associated with an increase of 0.1 to 0.26 percentage points in that occupation’s earnings growth rate
Critics argue the program enables wage suppression. The Economic Policy Institute found sixty percent of certified H-1B positions were paid below the local median wage, with companies hiring level-1 entry-level H-1B software developers in Washington D.C. receiving a discount of 36%, or $41,746. Outsourcing firms dominated the H-1B program in 2022—thirteen of the top 30 H-1B employers were outsourcing firms, issued a total of 17,534 visas for new workers.
The $100,000 Fee and AI Talent Competition
The September 2025 proclamation fundamentally altered the economics of H-1B hiring. The $100,000 fee applies to all new H-1B petitions filed after September 21, 2025, including 2026 lottery filings. The supplemental fee impacts H-1B cap petitions filed during the April–June 2026 window for Fiscal Year 2027, as well as new petitions filed by cap-exempt employers, though implementing regulations and payment mechanisms remain unresolved.
The new fee is expected to decrease the total number of college-educated immigrants in the U.S., with the IT services sector most affected as most firms pay H-1B workers a lower annual wage than the fee itself, according to Federal Reserve Bank of Richmond.
The policy shift coincides with explosive demand for AI talent. AI talent demand exceeds supply by 3.2:1 globally, with over 1.6M open positions and only 518K qualified candidates available, according to industry research. For the first time, Artificial Intelligence skills have surpassed all others to become the most difficult for employers to find globally, with 72% of employers reporting hiring difficulty in ManpowerGroup’s 2026 Talent Shortage Survey.
AI-related roles command 67% higher salaries on average compared to traditional software engineering positions, with some specialized roles seeing premiums of over 100%. Demand for AI skills has grown 21% annually since 2019, with nearly half of all AI jobs potentially remaining unfilled by 2027.
In AI, 46% of leaders cite skill gaps as a major barrier to adoption, and job postings for agentic AI rose almost 1000% from 2023-24, according to McKinsey. The confluence of immigration restrictions and AI talent scarcity creates strategic pressure for Technology companies dependent on global hiring.
Program Evolution and Reform
The H-1B has undergone multiple transformations since 1990. The annual statutory cap began at 65,000 in 1990, was temporarily adjusted to 115,000 in 1999-2000 and 195,000 from 2001-2003, before returning to 65,000 from 2004 onward. In 2006, an additional 20,000 visas were made available to those holding master’s or doctoral degrees from U.S. institutions.
DHS announced in December 2025 a final rule implementing a weighted selection process that favors allocating H-1B visas to higher-skilled and higher-paid aliens while maintaining the opportunity for employers to secure H-1B workers at all wage levels, effective February 27, 2026 for the FY 2027 cap season.
Research shows companies winning the H-1B lottery expand employment and revenues and are more likely to survive in subsequent years, with no evidence that hiring H-1B workers displaces native college-educated workers—instead, small, high-productivity firms grow faster and hire more native graduates once they bring in immigrant talent.
Related Coverage
For the latest on how the $100,000 H-1B fee is reshaping tech company hiring strategies, see Trump’s $100,000 H-1B Fee Survives First Court Test as Tech Giants Face Material Cost Shock.
The AI talent competition extends beyond immigration policy—see India’s $250 Billion Outsourcing Empire Faces AI Existential Threat for how traditional H-1B sponsors are adapting. Tech decoupling is creating alternative talent strategies, explored in NIST Bars Foreign Scientists from Labs in Sharp Escalation of U.S. Tech Decoupling and Missiles Over the Money Hub: Iran War Tests Dubai’s Neutrality Model.