One of the biggest shocks to hit U.S. tech hiring in years is the sudden introduction of a $100,000 supplemental fee on many new H-1B petitions. Though announced in a presidential action this September 2025, and then clarified with USCIS guidance, the fee applies to many new H-1B petitions filed on or after September 21, 2025. This raises the upfront cost of sponsoring foreign hires from abroad
Read on to get a clear and practical look at what the fee means, how hiring patterns will shift in 2026, and what concrete strategies founders can take to keep moving fast without breaking the bank
Who pays the $100K fee, and when does it apply?
The new rule imposes an additional fee of approximately $100,000 on new H-1B petitions filed after the effective date. Guidance from USCIS and related government statements provides further explanation of its applicability, exemptions, and limited circumstances. For example, it does not apply to carve-outs for some cases involving a change of status and renewals, depending on the particular facts.
As this rule is very recent, employers should review the official USCIS Frequently Asked Questions and the presidential proclamation to determine its applicability to individual cases.
How might this fee influence hiring budgets and hiring decisions at startups in 2026?
A one-time outlay of $100K per new overseas H-1B hire makes unit economics drastically different:
- Early-stage startups that previously relied on modest visa costs now face an expense almost comparable to the six- to twelve-month total compensation of a senior engineer.
- This will make mid-stage startups reassess the case for sponsoring a visa when it is required, especially for jobs that can be remote or hired locally.
- Larger technology companies might not be as burdened by it, making the competitive gap even wider for startups in case H-1B dependence continues unaltered.
In a nutshell, we expect startups to be much more discerning about whom they sponsor and to pursue alternate models of hiring aggressively.
Will startups stop hiring international talent altogether?
Not likely, but the approach will change. Startups will prefer models that don’t bear the fee or have it less often:
Go Remote: Hiring remote employees who stay in their home country and never need to enter the U.S. avoids the fee altogether.
Employer of Record or global PEO arrangements: Enable startups to employ talent abroad legally while not sponsoring U.S. visas.
Hirings of international candidates already in the U.S.: Candidates under various statuses may remain viable under certain rules and exemptions, such as F-1 OPT, L-1, and existing H-1B transfers.
How will recruiting tactics change, and what should talent teams do now?
- Re-prioritize remote-first sourcing.
Invest in global sourcing pipelines: active sourcing across Latin America, Eastern Europe, South and Southeast Asia. These candidates who work remotely for U.S. companies without needing a visa.
- Make EORs and local entities strategic levers.
EOR providers let you hire quickly and compliantly while avoiding visa fees and entity setup costs. For startups validating new markets, EORs are a fast, lower-risk route.
- Focus on candidates already in the U.S.
International students on OPT or persons with other eligible statuses may still be viable for hires with lower visa friction. However, verify the status rules very carefully.
- Rethink compensation and hiring models.
Consider distributed teams where local hiring is less expensive, with differentiated compensation packages reflecting local market rates but keeping equity sweeteners.
- Building a stronger employer brand and remote onboarding
Invest in frictionless remote onboarding, mentorship, and culture building if you hire more remote candidates. This will retain the best talent without relocation.
What are some key legal and compliance steps founders should take immediately?
Review pending petitions and timelines– If you filed pre-September 21, 2025, petitions, confirm whether they escape the fee under USCIS rules.
Immigration counsel should be contacted now- There are technical exceptions and procedural details to the rule that demand legal interpretation specific to each case.
Onboard and vet EOR partners or local payroll vendors- Choose them for their compliance credentials, cost models, and data security practices.
Update hiring budgets and investor communications. Be transparent with investors
Could the policy change again – wait or act now?
Policy can evolve. Political pressure and litigation may forge future adjustments or exemptions; Congress and other stakeholders have already begun responding publicly. But rarely do hiring or product timelines wait for such solicitude from regulators.
The smart move is dual track: stabilize the short-term hiring via EORs while monitoring legal developments that may reopen more affordable onshore sponsorship in future cycles.
Utilize a hybrid model: Hire critical, on-site roles domestically and source remote specialists from around the world with EOR. This means filing H-1Bs only for very exceptional, mission-critical hires where financially justified.
If you need a physical presence in a region, consider investing in a local entity early to recruit without U.S. visa friction.
Final thoughts
To startups, the immediate imperative is clear: stop assuming H-1B sponsorship is a budget option. Reassess your hiring plan, embracing EOR models where possible, and consult counsel on edge cases.
Do this while maintaining a long-term talent strategy for balancing speed, compliance, and culture.
