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President Donald Trump’s executive order just put a $100,000 fee on new petitions for H-1B temporary workers. The rollout suffered from muddled communication, and the order does not stop the H-1B from being used to replace American workers — but it’s a sorely needed first step.
Created more than 30 years ago to fill a temporary labor shortage, the H-1B has ballooned beyond its intended scope. It needs to be reformed to put American workers first.
Explaining how the H-1B went so far off the rails would take a whole report — which is why I’ve written one, coming out soon. Meanwhile, here are some of the problems.
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H-1Bs allow companies to replace American workers with cheap foreign labor and suppress wages for Americans. Exceptions to the original H-1B annual cap of 65,000 visas each fiscal year have expanded the number far beyond statutory limits.
First, 20,000 more were set aside for applicants with a master’s degree or higher degree. Then, H-1Bs for universities and government research organizations were made cap-exempt. Then DHS allowed the spouses of H-1B holders to work.
Fraud, nepotism and corruption have long compromised the H-1B process. Outsourcing firms and “body shops” rig the labor market to hire foreign workers over Americans.
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Yet there is no shortage of domestic science, technology, engineering and math (STEM) graduates. Every year, the U.S. produces more graduates with bachelor’s degrees in computer science and engineering than the economy demands, and overall, only 28% of workers with a STEM degree actually work in a STEM job.
There are some high-talent H-1Bs, but as Howard University Political Science Professor Ron Hira says, the typical H-1B recipients “are ordinary skilled workers” who could be supplied domestically.
Amazon, Intel, Google, Microsoft and many other companies have let American workers go while they continued to hire thousands of H-1Bs. Companies predictably deny any connection between the two phenomena, but laid-off U.S. workers insist otherwise. In 2020, the site White Collar Workers of America ranked the “Misfortune 500” body shops most-abusive of H-1Bs. In some cases, companies even require Americans they are sacking to train their foreign replacements.
On Sept. 25, Iowa Republican Sen. Chuck Grassley and Illinois Democrat Sen. Dick Durbin wrote to the CEOs of Amazon, Apple, Google, Microsoft and other large American companies asking for specific information about their hiring of H-1Bs, saying “we find it hard to believe that [you] cannot find qualified American tech workers to fill these positions.”
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H-1Bs were supposed to be limited to three years, but holders can renew up to six years. And if an alien can’t get a green card because of the cap (no one country is allowed more than 7% of the annual visas), he can get three-year extensions indefinitely.
Many of the top employers of H-1B workers are foreign-based outsourcers who hire thousands of low-wage H-1Bs and farm them out to U.S. industry. More than 70% of new H-1B workers are from India, with China a distant second at 11%.
H-1Bs allow companies to replace American workers with cheap foreign labor and suppress wages for Americans. Exceptions to the original H-1B annual cap of 65,000 visas each fiscal year have expanded the number far beyond statutory limits.
By going through an outsourcing firm, U.S. companies can pay less and avoid negative publicity when replacing Americans. In 2024, hundreds of subcontractors filed for H-1Bs on behalf of Verizon, Wells Fargo, and Walmart. From 2020 to 2024, Citigroup hired more than 3,000 new H-1B workers via outsourcers, who paid them less than those Citi hired directly.
Many H-1B subcontractors commit unscrupulous or illegal practices. In 2024, Kishore Dattapuram and Kumar Aswapathi, owners of Nanosemantics in San Jose, California, pled guilty in an H-1B visa case. According to the U.S. Attorney’s Office, “In pleading guilty, Dattapuram admitted to working with Aswapathi and Giri to submit fraudulent H-1B applications that falsely represented that foreign workers had specific jobs waiting for them at designated end-client companies when, in fact, the jobs did not exist.”
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Outsourcing giant Cognizant has successfully petitioned for over 52,000 new H-1B workers since 2009, the highest of any company. In 2024, Cognizant was found liable for intentionally discriminating against more than 2,000 non-Indian employees between 2013 and 2022.
American workers at Cognizant were twice as likely to be fired or resign than workers on visas, and, “Black employees were let go at a rate 23 times that of Asian workers.” According to Bloomberg, “each of the five largest outsourcing companies has either settled, lost or is currently fighting a discrimination lawsuit” within the last four years.” Yet they are allowed to continue petitioning for new workers.
The H-1B salary minimum was set at $60,000 in the 1990s but has not been adjusted for inflation. Employers must attest that they will pay new H-1Bs at least the prevailing wage, but a July 2025 Heritage Foundation report showed most H-1B positions pay below-average salaries.
Microsoft reportedly pays 82% of its foreign workers less than the market wage. Accounting giant Deloitte paid H-1B workers 10% less than Americans in similar roles. Many universities use their cap-exempt status to recruit foreign workers over their own graduates.
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The most corrupt element in the H-1B pipeline is when they convert to permanent residence. This “PERM process,” according to a 2020 Department of Labor report, “relentlessly has employers not complying with the qualifying criteria” — because it is a hoop which they must reluctantly jump through before they can hire their preferred, foreign candidate into a job.
The law requires PERM jobs to be advertised, but companies try to hide them. They try to minimally advertise open positions while avoiding qualified American applicants.
H-1Bs were supposed to be limited to three years, but holders can renew up to six years. And if an alien can’t get a green card because of the cap (no one country is allowed more than 7% of the annual visas), he can get three-year extensions indefinitely.
In 2021, Facebook (Meta) was fined $4.75 million for intentionally denying qualified U.S. workers a fair opportunity to apply for jobs that it had reserved for H-1Bs. In 2023, Apple paid $25 million for similar discrimination. But these fines are minuscule compared with the profits from bringing in cheap labor.
In 2025, a group of veteran tech workers set up the site www.jobs.now. They find deliberately obscure job advertisements and post them, advising applicants to file complaints with the Department of Justice if they believe they were unfairly rejected.
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At a time when 6.1% of recent college graduates with computer science majors are unemployed, allowing thousands of foreign workers to compete against them on unfair terms makes no sense.
Charging new H-1B petitioners $100,000 will be a body blow to body shops. But it will leave open many other side doors to unfair competition. Let’s hope this is the beginning of more reform to put the H-1B back in its box and give Americans first crack at their own labor market.