Amr Awadallah, founder of Ai Startup Vectara, had two reactions when he heard about the changes to the Visa H-1B program that Increase the application fee for each visa to $ 100,000.
It wasn’t surprised. But he was frustrated.
“I can’t pay $ 100,000,” Awadalah told TechCrunch. A H-1B employee has been hired and while the new fee only applies to new applications, he believes it is too high for many newly established businesses and will invoice them from hiring internationally.
The H-1B view was created to allow companies to hire specialized talents from a global market for professions such as IT and Engineering. On Friday, Trump announced that the increase in fees, usually paid by the employer, would increase from $ 2,000- $ 5,000 to $ 100,000 per request, a change that will be particularly noticeable with the new batch of visas available in March.
Migration is a key issue for President Trump, who dates back to his 2016 campaign, accused companies of using H-1B to take jobs from US citizens.
Critics of the fee increase that this view has helped to bring to people who have started or run by companies of many billions of dollars. Former owners include Google’s Sundar Pichai, Microsoft’s Satya Nadella and Elon Musk. The visa was more accessible than the O-1 visa for excellent ability and faster to get a green card.
“The impact will be serious on the competitiveness and innovation of the smaller newly established businesses compared to supreme, big businesses,” Awadalah said. While Big Tech can more easily endure such fees, it feels that newly formed businesses will lose. The newly established businesses, he said, “will affect innovation in a very negative way longer.”
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Could cost the $ 5.5 billion technology industry per year
More than 700,000 People live in the US in an H-1BAnd they have brought with them more than 500,000 dependents, such as spouses (who are allowed to work on the basis of this view) and children, according to the defense group of immigration and criminal justice fwd.us. Indian nationals are the greater recipients of the visa, followed by China and the rest of the world, according to US citizenship and immigration services.
Only 85,000 young people per year can receive the visa (20,000 of them must have just graduated from a US university) and demand to overcome availability so that the H-1Bs are randomly available in a draw held in March. Technology companies have exerted pressure for years to increase to annual H-1B limits.
Critics claim that these companies use H-1B holders to replace US employees with lower payment employees from abroad. Others say that they are exploiting foreign workers, as the visa is linked to the employer, so workers cannot easily change jobs and face deportation if they lose their job.
Those who support the increase in visa fees have said that it could eliminate the draw because the costs are now so high that employers would limit their applications.
Of the 85,000 new H-1b visa issued each year, about 55,000 go to computer-related jobs, according to Business Marketplace Designrushwhich were shared with TechCrunch data. Previously, the total cost of recruitment of these workers has declined between $ 200 million and $ 400 million, but with the new fee, it will cost the $ 5.5 billion in the technology industry a year to hire H-1B TECH employees.
According to the proposed changes, few employers have to pay an H-1B recipient will also increase, a change that is offended to help prevent the degradation of salaries of US citizens.
But many questions are still late. For example, Sophie Alcorn, a migration lawyer working with newly formed companies, said it is not clear if $ 100,000 will be returned to the payer if a request is rejected. As prices increase came into force on Friday, it is also not unclear whether the visa reports under review are subject to it.
“This is forcing us to stop, we temporarily hope, numerous H-1B reports for aspiring founders,” he said. “We are waiting for more guidance.”
‘That makes me sad’
The founders of Silicon Valley say they look worldwide because there is a lack of technical talent in the US, especially for skills such as AI Engineering.
Brian Sathianathan, co -founder and CTO of AI Company Replate, has a handful of visa employees and credits the visa for the previous successful start out.
“My last company I founded and sold, my co-founder was in a H-1B visa. My engineering chief was in a H-1B visa,” Sathianathan said. With such high fees for the visa application, that “it would not be possible”.
Other founders warn that the end sends a message that foreign talent may not be welcome.
The impact will be serious on the competitiveness and innovation of the smaller newly established businesses compared to ultrasound, big businesses.
Hemant Mohapatra, an India-based partner at Lightspeed Venture Partners, was in H-1B for about 15 years. Said the expensive obstacles for technology visas could leave A gap of innovation in US start -up ecosystem Because a large proportion of unicorns and decacorns was actually founded by immigrants.
Many times, he said, people brought to the US in an H-1B view later they continue to start their own US companies. Sometimes, their children grow older to be founders.
This is the experience of Jeffrey Wang, co -founder of AI Company Exa.ai. While some of his employees received H-1B visas from a previous employer, Wang’s parents migrated to the US as H-1B recipients.
“I heard the news and it was like that makes me a bit sad,” he told TechCrunch. “I feel that people like my parents could no longer come to America.”
Trump’s administration said the change of visa was to protect national interests, but Wang believes that it brings the best talent to the US helps to secure the nation. As a nation of immigrants, almost every major mechanical or scientific achievement in the US has been involved in immigrants, he said.
The newly formed explores their choices
The newly established businesses are now mixing. Some want exceptions engraved for newly formed businesses. The administration said the exceptions were possible in cases of national interests.
Meantime, Counseling Business Migration He told TechCrunch that he has seen more than 50% increase in early stage founders who are examining O-1 (although spouses cannot work in this view). Subsequent companies are looking at the EB-1A visa, usually given to those at the top of their fields, and spouses are allowed to work.
I feel that people like my parents could no longer be able to come to America.
Jack Thorogood, chief executive and founder of the inherent groups of the Payroll Company, said his company has watched a 50% increase in US companies exploring global visa -free recruitment options, such as international remote work.
Inherent groups, which work with over 3,000 companies in 85 countries, said one H-1B lease will equate 20 remote recruitment in many other countries.
He believes that newly established businesses will simply begin the talent of external assignment or maintaining their employees abroad. “It would not be more expensive to have talent abroad anyway,” Thorogood said.
Markets such as Canada, Germany and the United Kingdom are already developing technological hubs that serve as landing points for companies opening international offices.
“If the US is increasing obstacles, the United Kingdom and others will have to adapt accordingly to utilize the amazing talent from all corners of the world,” said Oliver Kent-Braham, Managing Director and co-founder of UK Unicorn Marshmallow.
Canadian Daniel Wigdor, founder of a AI Venture studio and professor at the University of Toronto, agreed that Visa’s remuneration change was not a good step for the US
“Instead of competing for the best in the world, they try how many companies they will pay to introduce them,” he said. “This attitude can play in the domestic market, but it is in danger of underestimating the world technical domination of America.”
This piece was informed to reflect the correct title of Daniel Wigdor and the spelling of the name of the camel.
