Trump signs H-1B order, also extends USD 100,000 fee: What it means for Indians

Indian IT services companies and workers face tighter scrutiny in the United States after President Donald Trump signed an executive order directing federal agencies to more closely examine H-1B visa applications, particularly where American workers may have been laid off or could face layoffs.

The order, signed on Friday (September 18), requires the US departments of State, Labor and Homeland Security to coordinate with the departments of Commerce and Education and the Small Business Administration when processing H-1B petitions and visas. The agencies will share information on wages, employment, academic qualifications and industry conditions.

‘Systematic abuse of H-1B programme’

“The large-scale, systematic abuse of the H-1B programme to obtain non-qualifying foreign labour has undermined the additive purpose of the program and harmed the wages, working conditions, and job opportunities of skilled American workers,” Trump said in the order.

Also read: US proposes rule change to eliminate 60-day grace period for H-1B, other work visas

“The abuse of cheaper H-1B labour places downward pressure on domestic pay. H-1B visa holders earn far less than comparable United States-born workers, despite the statutory mandate that H-1B workers be paid equally to their domestic peers, with the estimated wage gap starting at $9,000 and climbing as high as $20,000 in H-1B reliant industries,” he added.

According to Trump, one company even warned its shareholders that restrictions on cheap H-1B labour could force the company to use “local” workers, which “may only be available at higher wages”.

Trump said many employers had laid off a “large number of highly skilled American workers”. “Many employers have laid off large numbers of highly skilled American workers, only to promptly hire large numbers of H-1B workers who are often lower-skilled and lower-paid. For instance, technology sector employers have collectively requested H-1B visas for hundreds of thousands of workers, yet have also laid off somewhere between 800,000 to 1.3 million American employees from 2022 through 2026. Employers have even forced laid off American workers to train their foreign replacements.”

What it means for Indian IT

For Indian IT companies and professionals, the most significant provision may be the instruction to consider whether a sponsoring employer has directly or indirectly carried out layoffs of similarly situated US workers during the previous year, or is planning such layoffs.

Also read: Trump trouble: Is American dream over for Indian students, techies?

The Labor Department has also been ordered to begin, within 30 days, a review of data from previously filed labour-condition applications to determine whether further action should be taken against sponsoring employers.

The H-1B programme has traditionally been important to Indian technology workers and the US operations of Indian IT services companies.

Reuters news agency reported in 2025 that more than 70 per cent of H-1B beneficiaries entered the United States from India, underscoring the country's importance to the programme.

The latest order does not abolish the H-1B programme or impose a blanket ban on Indian workers. Instead, it gives US agencies additional instructions to scrutinise employers and applications, particularly where there are concerns about the displacement of American workers.

The White House says the action is aimed at preventing companies from using H-1B workers to replace US employees with lower-paid foreign labour. It specifically accuses some IT staffing and outsourcing companies of abusing the programme. Those allegations are the administration's stated rationale for the policy.

Another year of USD 100,000 H-1B restriction

The executive order comes as the Trump administration separately extended restrictions requiring a USD 100,000 payment for certain new H-1B visa applications for another 12 months, until September 21, 2027. The White House says exemptions may be granted where the Department of Homeland Security determines that an exemption is in the national interest.

The fee has faced legal challenges. In June, a federal judge struck down the USD 100,000 charge, ruling that the administration lacked authority to impose it as a tax without congressional approval. The case has been appealed.