H-1B Visa Disruption: How HR Leaders Are Responding

A recent i4cp Flash Call, a member peer-to-peer virtual discussion, tackled the urgent and complex implications of the newly enacted $100,000 H-1B visa fee. Guided by expert insights from Nancy Morowitz, Partner at Fragomen and Leader of their U.S. Legal Strategy and Knowledge Group, and grounded by practitioner experience from Pete Manias, Chair of i4cp’s Total Rewards Leader Board and former Microsoft HR executive, the discussion offered clarifications on the impact of the policy changes and early organizational responses. As employers continue to seek clarity amid regulatory ambiguity, they are preparing for changes, from cost modeling to compassionate employee communications.

Key Take-Aways

• The new $100K H-1B fee will significantly impact U.S. talent strategy, especially for new visa applications.
• “New” H-1B filings are defined narrowly, but the government's final interpretation remains unclear.
• Employers are urgently modeling financial impact and adjusting internal policies—some initiating travel freezes.
• Immigration transitions (e.g., OPT to H-1B, L2 to H-1B) raise critical timing and compliance concerns.
• Cap-exempt employers are cautiously proceeding with petitions, balancing risk and speed.
• Mergers and acquisitions introduce further complexity in visa transitions and fee applicability.
• Global talent strategy is shifting: more focus on nearshoring, remote hiring, and internal mobility.
• Equity and belonging are top of mind—HR leaders are weighing how uncertainty impacts employee well-being.

A Disruptive Change with Uncertain Scope

Nancy Morowitz opened by explaining the unexpected scope and rapid enactment of the $100,000 fee tied to “new” H-1B visa filings. While framed as an effort to deter overuse of the system, the fee's ambiguity—particularly around what constitutes a “new” filing—has created confusion. Does a change from student status (e.g., F-1 to H-1B) count? What about overseas hires? Employers are left interpreting vague language while awaiting formal guidance.

“We need more clarity from the government on what a 'new' H-1B filing is. And also what it means for an H-1B beneficiary to be 'outside the United States' for purposes of liability for the fee.” – Nancy Morowitz

As of October 6, 2025, Morowitz provided the following overview clarifying what is currently known of the White House Initiatives, the impact they’ll likely have on talent, and potential employer actions in response:

White House Initiative	Impact	Status	Employer Action Items
Presidential Proclamation restricting entry of H-1B workers	Imposes $100,000 fee on “new” H-1B petitions filed after 9/20/2025 on behalf of individuals outside the U.S. Does not apply to H-1B extensions, but impact on other types of H-1B filings and effect of international travel after case filing are not yet clear Allows employers to seek waivers of the fee by individual, company, or industry in the national interest Directs DOL to propose a rule to lift H-1B wage minimums	In effect but not fully implemented No payment mechanism yet in place Lawsuit to strike down the entry restrictions and fee has been filed	Advise international travel caution for some H-1B employees Assess H-1B hiring needs and budget impact Plan strategy for seeking national interest fee waivers Plan alternative immigration strategies for affected employees Consider advocacy activities to advise USG of impact on talent pipeline and U.S. competitiveness
DHS proposed regulation to restructure the annual H-1B visa lottery	Would use weighted lottery to favor the highest-paid prospective H-1B employees, keyed to DOL prevailing wage statistics	Proposal stage Public feedback accepted through 10/24 Won’t take effect until federal rulemaking process is complete May be vulnerable to court challenge	Identify potential impact on talent pipeline and comp structure Consider advocacy activities
DHS proposal to restrict practical training programs for recent foreign grads of U.S. universities	Could limit or eliminate the ability of foreign students to engage in first professional experiences in the U.S. Could restrict employer access to early-career foreign talent	Proposal in development Once published, public feedback would be accepted before implementation	Identify potential impact on talent pipeline and comp structure Consider advocacy activities

 

H-1B Disruptions Immediate Timeline

While we continue to wait for additional clarifications from the administration and potential challenges, Morowitz provided the following timing considerations for employers:

• 9/21/2025: $100,000 fee in effect for “new” H-1B employment filed on behalf of beneficiaries outside the U.S., unless overturned by a federal court or unless the employer is granted a waiver, though implementation had not begun as of 10/6/25.  Because the H-1B cap has been met for FY 2026, most employers will not feel the full impact of the fee on new H-1Bs until next year.  But employers exempt from the annual H-1B cap – i.e., higher-ed institutions and certain government and nonprofit research entities – can file new H-1Bs at any time and thus could face the financial impact sooner, unless the government clarifies that they are not subject to the fee.
• Now through 03/01/2026: Assess potential impact of wage-based weighting system on H-1B needs in advance of the next selection lottery in March 2026, in case proposed regulations are finalized and implemented quickly.
• 4/1/2026 and beyond: Full impact of the $100,000 fee would take effect for all cap-subject employers, as fee would be required with H-1B cap petitions filed for employment in FY 2027, unless overturned by a federal court or a waiver is granted.

Immediate HR Responses: Caution, Modeling, Freezes

Organizations are not waiting. Several HR practitioners shared that their companies are already initiating travel freezes and halting H-1B filings until they understand the financial and legal ramifications. Others are engaged in rapid cost modeling, considering whether roles previously offered to international candidates can be reprioritized or filled differently.

Pete Manias emphasized that companies must act even amid uncertainty. He encouraged HR leaders to consider proactive budgetary assessments to avoid mid-year surprises.

“New” H-1B Status: A Grey Area for Many

F-1 to H-1B: A significant portion of the conversation centered on F-1 students and STEM OPT transitions to H-1B status. Employers raised concerns about whether internal transitions count as “new” under the rule. Fragomen’s guidance was cautious optimism: the transitions might not incur the fee—but organizations must be prepared for interpretation to shift.

This concern dominated chat comments as well, with multiple attendees reacting positively to shared questions about this issue.

M&A Transitions: Participants flagged an urgent need for clarity around M&A transitions. If an employee moves to a new legal entity due to acquisition, does that trigger a new H-1B filing—and therefore the fee? Nancy acknowledged this is an unresolved risk factor that companies undergoing structural changes must monitor closely.

Cap-Exempt Organizations Tread Carefully

Cap-exempt employers (e.g., non-profits, universities, certain research institutions) asked whether they could proceed with status change petitions. Morowitz shared that, in theory, they could—but only with an understanding that policy interpretation may shift. Risk tolerance will drive decision-making.

One participant asked if they could “move forward with these now.” The cautious answer: yes, but with eyes wide open.

Long-Term Impacts on Global Talent Strategy

Several leaders shared that their organizations are already shifting talent strategy away from U.S.-based H-1B reliance. Nearshoring, remote international roles, and internal mobility are all under consideration. Some are exploring relocating critical roles to Canada, Europe, or Latin America to mitigate risk.

Organizations should not treat this as a short-term disruption only. The visa landscape is likely to continue evolving, and agility is essential.

The Toll on Employee Experience, Well-being, and Belonging

Perhaps the most resonant moment came when an attendee noted that this uncertainty is impacting the well-being of both employees and their families. International employees face intense anxiety about their status, and HR must consider emotional, cultural, and equity dimensions when crafting responses. One attendee noted, “There’s a real human cost behind these changes,” and shared that they’re providing guidance on well-being and belonging to their HR team as they field challenging questions.

Recommended Resources:

• National Foundation for American Policy (NFAP) (opens in a new tab) – A key source for tracking H-1B and L-1 visa policy updates and cost modeling.

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