Amr Avdallah, the founder of AI Startup Wctara, had two reactions when he heard about the change in the H -1B visa program Increase the application fee for each visa by $ 100,000,
He was not surprised. But he was disappointed.
“I can’t pay $ 100,000,” Avdallah told Techcrunch. They have hired an employee on an H -1B, and while the new fee applies only to new applications, he believes that it is too much for many startups and will exclude them from working internationally.
H -1B visa companies were designed to allow businesses such as IT and engineering to rent skilled talent from the market worldwide. On Friday, Trump announced that the fee hike, usually paid by the employer, will increase from $ 2,000-$ 5,000 to $ 100,000 per application, a change that will be especially felt with a new batch of visas available in March.
Immigration is an important issue for President Trump, who dating back to his 2016 campaign, accusing companies of using H -1B to take jobs from American citizens.
Critics of fee hike noted that this visa helped to bring them to those who have gone to start or run multinational-dollars companies. The former holders include Google’s beautiful Pichai, Microsoft’s Satya Nadella and Elon Musk. The visa is more accessible than the O -1 visa for extraordinary capacity, and is faster to get early than the green card.
“Effects will be serious on the competition and innovation of small startups than hipersscales, bigger businesses,” said Avdallah. While Big Tech can more easily tolerate such fees, they feel that startups will be remembered. Pricing startups, he said, “Very, will affect innovation in very negative ways.”
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The technical industry may cost $ 5.5 billion per year
More than 700,000 People live in America on an H-1BAnd they have brought over 500,000 dependents with them, such as husband -wife (who are allowed to work under this visa) and according to children, immigration and criminal justice advocacy group Fwd.us. Indian citizens The largest recipient of the visa, According to American citizenship and immigration services, China and the rest of the world.
Only 85,000 new people can get visas in a year (20,000 of them would have graduated from just one American university), and demand the availability of outstrips, so H -1B is allocated randomly, in a lottery held in March. Tech companies have Advocation for years for growth In the annual H-1B boundaries.
Critics allege that these companies are using H-1B holders to replace American workers with less paid employees from abroad. Others say that it exploits foreign workers, as the visa is connected to the employer, so workers cannot easily do a job and they face exile if they lose their jobs.
Those who support visa fee increase, said that it can eliminate lottery because the cost is now so high that employers will limit their applications.
Out of 85,000 new H -1B visas released every year, about 55,000 go to computer related jobs. Business market designingWhich shared data with techcrunch. Earlier, the total cost of hiring these workers fell between $ 200 million and $ 400 million, but under the new fee, the H-1B would cost technical activists to hiring $ 5.5 billion per year to hiring.
Under the proposed changes, minimum wage employers would have to pay the H -1B recipient, it will also increase, a change was made to help reduce the US civilian worker salary.
But many questions are still loom. For example, Sophie Alacorn, an immigration lawyer working with startups, stated that it is not clear whether an application is denied whether $ 100,000 will be returned to the payment. As the price was technically effective on Friday, it is also not clear whether visa petitions are currently under it under the review.
“It is forcing us to stop, hopefully, temporarily, many H -1B petitions for aspirational founders,” he said. “We are waiting for more guidance.”
“it saddens me”
Founders of Silicon Valley say they look worldwide because there is a lack of technical talent in the US, especially for skills such as AI engineering.
The AI Company, the co-founder and CTO of Itaret, has a handful of employees on a visa and credits a visa for their previous successful startup exit.
“My last company that I co -established and sold, my co -founder was on H -1B visa. My engineering chief H -1B was on visa,” said Sathianthan. With such a high fee for visa application, that “will not be possible.”
Other founders warned that the fee sends a hint that foreign talent cannot be welcomed.
Effects will be serious on competition and innovation of small startups compared to large businesses, larger businesses.
Hemant Mohapatra, a India -based partner among the LightSpeed Venture Partners, was at H -1B for about 15 years. He said that tech-worker can leave expensive obstacles for visas An innovation interval in US Startup Ecosystem Because a large percentage of unicorn and decocorn is actually established by immigrants.
Many times, he said, people brought to America on H -1B visas, later proceed to start their American companies. Sometimes, their children grow up, the founder too.
This is the experience of Jeffrey Wang, co-founder of AI company EXA.AI. While some of his workers received H -1B visas from the previous employer, Wang’s parents came to the US as H -1B recipients.
“I listened to the news and hurt me in this way,” he told Techcrunch. “I think people like my parents will no longer be able to come to America.”
The Trump administration said the visa change was to protect national interests, but Wang believes that the country helps in bringing the best talent in the US. As a nation of immigrants, immigrants have been involved in almost every important engineering or scientific achievement in the US, he said.
Startups detect your options
US startups are now scratching. Some want exceptions to carve for startups. The administration said that exemption in matters of national interest was possible.
During this time, Business immigration consultancy consultancy cassium Techcrunch reported that this has seen more than 50% increase in the preliminary stage founders by looking at the O -1 visa (although spouses cannot work on this visa). The latter-stage companies are looking at the EB-1A visa, usually given to those at the top of their areas, and the husband and wife are allowed to work.
I think people like my parents will not be able to come to America anymore.
Jack Thorogood, CEO and founder of the original teams of the payroll company, said his company has tracked a 50% increase in American companies searching for visa-free global hiring options such as international remote work.
The original teams working with more than 3,000 companies in 85 countries said that an H -1B fare would now be equal to 20 distance fare in many other countries.
They believe that American startups will just start outsourcing talent or will start keeping their workers abroad. “Anyway it will not be more expensive to have talent abroad,” said Thorogud.
Markets such as Canada, Germany and UK are already burying the tech hub serving as a landing spot for companies opening international offices.
Oliver Kent-Brahm, CEO and co-founder of UK-based Unicorn Marshmallow, said, “If the US is increasing obstacles, the UK and others should exploit the amazing talent from all corners of the world,” said Oliver Kent-Brahm, the CEO and co-founder of Unicorn Marshmallow, the UK-based Unicorn Marshmallow.
Canadian Daniel Wigdor, the founder of AI Venture Studio and founder of Professor at the University of Toronto agreed that the visa fee change was not a good step for America
“Instead of competing for the world’s best, they are testing how much companies will pay to import them,” he said. “This stance can play domestically, but it risk reducing the global technical dominance of the US.”
This piece was updated to reflect the appropriate title of Daniel Wigdor And spelling of the name of Kasium.
