How the H-1B visa fee spike will affect WA companies

President Donald Trump has proposed overhauling a key visa program supported by many large tech firms, including Washington-based Microsoft and Amazon.

Those companies and many others use the H-1B program to hire highly-skilled foreign workers. Trump wants to impose a $100,000 fee for those visas, which has upended future hiring plans for many companies.

Kim Malcolm spoke to KUOW reporter Monica Nickelsburg about what these companies plan to do in the face of these new fees.

This interview has been edited for clarity.

Kim Malcolm: First of all, for those of us not familiar, tell us why H-1B visas are so important for these companies.

Monica Nickelsburg: Well, these companies have long said that they have talent needs that cannot be satisfied by the domestic labor pool. And so in order to hire the talent, they need to build amazing technology products. They need to bring people in from other countries with specialized skills.

So what exactly is changing here with this executive order? Because I know there was some confusion from the administration about how this was being rolled out.

There was some confusion over the weekend, and that led companies like Microsoft and Amazon to issue these urgent memos to their employees, saying, 'Stay in the U.S. if you're here, return if you're in another country,' because there was concern that this might take effect right away. Now we've gotten some clarity, and it looks like the $100,000 fee is only going to apply for new applications for new H-1B visas, so current holders should be safe for the moment.

OK, so this won't apply to employees who are already working here on H-1B visas. How many people could this potentially affect?

There are thousands of H-1B visa holders across the U.S., and there's a high concentration here in Washington state. Microsoft and Amazon are consistently in the top two or three applicants for these visas, and they're both headquartered here. Just this year, the two of them combined applied for 15,000 H-1B visas.

Now, those are not necessarily all in Washington, but the majority is likely, since they're headquartered here. And one interesting thing about the Trump administration's announcement is it appeared to refer to Microsoft.

In so many words, it said something about a software company who was approved for 5,000 H-1B visas, while at the same time announcing a series of 15,000 layoffs. They don't name them by name, but the implication there is, why do these companies need to bring in all these workers from overseas when they can't even retain their American workforces?

And has the Trump administration laid out their reasons for why they're adding this, frankly, eye-popping fee they have?

Yeah, they say that there's widespread abuse of the H-1B visa program. Rather than using it to bring in these really highly specialized workers, they're being used by outsourcing firms, and really are just a tool to hire cheaper labor than you could get from the U.S.

Is it possible that this strategy could backfire and that there could end up being more hiring or offshoring of these kinds of jobs outside of the U.S.?

I have certainly seen speculation to that effect. Companies, if they are indeed using this as a way to lower their labor costs, I'm sure could find other creative ways to do that, as we've seen — they're very innovative in that way. But I do think that they have a little bit more to answer for given the fact that they're doing so many layoffs. I mean, another potential outcome that I've seen floated is they could lean more on AI and automation, rather than paying these very high fees to bring in more workers from overseas or hiring more domestic workers.

Listen to the interview by clicking the play button above.