Skip to content

New H-1B and L Visa Fee Increases Cause Stir Within Indian Outsourcing Community

With the November congressional elections looming and continued tension over unemployment and illegal immigration issues, President Obama signed into law a bill earmarking $600 million to procure additional personnel and technology to improve border security. To fund this initiative, the law almost doubles the fees for H-1B and L visa applications for the next four years; these visas are heavily relied on by many of India's largest outsourcing companies as one of the very few means of bringing skilled foreign talent into the U.S. to work on client projects.

The increased application fees apply to any applicant company that employs 50 or more employees in the U.S. if more than 50% of its employees are non-immigrants with H-1B or L visas. The fee for H-1B visa applications (for temporary skilled workers) was increased by $2,000, while the fee for L visa applications (for multi-national transferees) was increased by $2,250. Based on the language in the new law, these fee increases appear to apply only to applications for new visas, but not to renewal applications.

While the overall financial impact of these fee increases on the Indian outsourcing community (and their U.S. clients) remains to be seen, initial responses have been swift and critical. NASSCOM, the largest trade body for the Indian outsourcing community, called the bill in a press release "indirect protectionism" that will "hinder the free movement of people essential for promotion of free trade" and "lead to diminished inflows of Indian talent which is helping to drive U.S. tech innovation and spur U.S. recovery". India's commerce minister wrote a letter to U.S. Trade Representative Ron Kirk, expressing concern over the bill and saying that he estimated that the increased visa fees could cost Indian companies over $200 million a year and have an adverse effect on the competitiveness of Indian companies sending professionals to the US.

A copy of the law (Public Law 111-230) is available here

This client alert is a publication of Loeb & Loeb LLP and is intended to provide information on recent legal developments. This client alert does not create or continue an attorney client relationship nor should it be construed as legal advice or an opinion on specific situations.

Circular 230 Disclosure: To assure compliance with Treasury Department rules governing tax practice, we inform you that any advice (including in any attachment) (1) was not written and is not intended to be used, and cannot be used, for the purpose of avoiding any federal tax penalty that may be imposed on the taxpayer, and (2) may not be used in connection with promoting, marketing or recommending to another person any transaction or matter addressed herein.