Buried in a Federal Register notice this administration published on August 25 is a number that should embarrass whoever signed off on it. DHS's own analysis found that its proposed $103,265 fee on new H-1B petitions would inflict "significant economic impact" on 76% of the small businesses it examined — 11,051 of them, by the department's own count, according to Fortune's reporting. This isn't an outside watchdog or a hostile think tank producing that estimate. It's DHS, grading its own homework, and still landing on a number that should have killed the proposal before it left the building.
Six figures, one lump sum, zero patience for how startups actually work
A hundred-plus thousand dollars, due up front, per hire, is a rounding error for a bank or a defense contractor. For a twelve-person startup trying to bring on one specialized engineer, it's the entire runway for a quarter. Wharton researcher Britta Glennon put it plainly in the same Fortune piece: small companies "have fewer options," so the fee "just hits their profitability" directly — there's no larger balance sheet to absorb it into. Immigration attorney Elizabeth Ricci's framing cuts even closer to the point: "Either way, the country loses talent and jobs." Whether the visa gets denied or the fee gets paid, something productive doesn't happen that otherwise would have.
Worth being precise about what this fee is not: it isn't a floor under wages for American workers, which would at least be a defensible goal even where I've disagreed with the execution. It's a flat entry toll that a five-person biotech spinout pays at the identical rate as a firm with a market cap in the hundreds of billions. That's not leveling a playing field. That's paving over the small end of it.
A do-over of a rule a judge already struck down
This isn't even the administration's first swing. Coverage of the rollout notes this follows a federal judge voiding a prior $100,000 H-1B entry-fee proclamation earlier this year — a legal defeat that, rather than prompting a rethink, produced a re-packaged version run through a different regulatory door. This time it's a draft rule with a 30-day comment period rather than a proclamation, a process likely to stretch for months and just as likely to draw the same legal challenges that sank the first attempt. And notably, the fee applies to all cap-subject petitions, including master's-degree holders, while carving out cap-exempt positions at universities and nonprofits — so the businesses actually creating new private-sector jobs get the bill, and the institutions that don't have to compete for talent in the same market mostly don't.
I want fewer companies quietly training foreign workers to do jobs Americans could do at fair wages, and I've said so plainly. But that fight gets won by fixing wage floors and enforcement, not by taxing a Series A startup out of existence while its options for hiring within the country are already thin. A policy whose own authors project it will hobble three-quarters of the small businesses it touches isn't tough on outsourcing. It's just badly aimed, and DHS put the proof of that in writing itself.