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U.S. Citizenship and Immigration Services (USCIS) is adjusting fees for visas, including the H-1B. These new fees, designed to more fairly reflect “the time agency offices spend adjudicating petitions and applications” (in the federal government’s words), represent a weighted average increase of 20 percent over the old price structure.

“USCIS is required to examine incoming and outgoing expenditures and make adjustments based on that analysis,” Joseph Edlow, USCIS deputy director for policy, wrote in a statement on the USCIS website. “These overdue adjustments in fees are necessary to efficiently and fairly administer our nation’s lawful immigration system, secure the homeland and protect Americans.”

The new fees will start on Oct. 2, 2020. Of course, those who follow the twists and turns of H-1B policy know that President Trump’s temporary ban on H-1Bs, already in place, will extend to the end of 2020. You might think that, if Trump wins the upcoming election and renews the ban, these fees in the context of new H-1B applications will largely be a moot point, but there’s also a new fee structure for visa extensions that could impact those who already have an H-1B (as well as the companies they work for).   

For those applying for an I-129H1 (petition for nonimmigrant worker: H-1 classification (H-1B, H-1B1), the fee will rise from the current $460 to $555, a 21 percent change. For companies with more than 50 employees, more than 50 percent of whom utilize either the H-1B or L-1, the fee for visa renewals will come to $4,000 (for H-1Bs) and $4,500 (for L-1s). According to The Mercury News, this added fee for renewals could earn USCIS an additional $200 million per year.

USCIS insists the money is necessary, because the current fee structure leaves it with a shortfall of roughly $1 billion per year. Collected fees account for 97 percent of the agency’s overall budget.

The added fees will likely have a significant impact on subcontractors and business-services firms that specialize in contracting H-1B workers to other firms. Although multi-million- and multi-billion-dollar firms can easily absorb the fees associated with a handful of renewals, paying $4,000 apiece for many thousands of workers can impact the bottom line. 

Even before these added fees, USCIS and the Trump administration had cracked down on subcontractors. A recent analysis by the National Foundation for American Policy (NFAP) found that the H-1B application denial rate for these firms had skyrocketed over the past four years, especially when compared to “regular” tech companies. Check out the chart:

Dice’s separate analysis of USCIS data suggests that the rate of initial H-1B approvals (as well as approvals post-RFE) has crept up slightly after a period of declines, but the latest policy maneuvers could have a substantial influence on the number of H-1B approvals going forward. Even if Trump’s H-1B ban is temporary, the new fee structure could make companies seriously re-consider their visa strategy.