Trump plan to raise H-1B salaries could cost employers $18Bn
NEW YORK, UNITED STATES — A Trump administration proposal to sharply raise the minimum salaries United States employers must pay H-1B visa holders would cost the country’s biggest employers of white-collar foreign talent at least $18 billion in the first 12 months and could swell to $43 billion annually within three years.
According to a report from Bloomberg News, the plan would push entry-level software engineer wages in San Francisco to $162,000, in New York to $132,000, and in Dallas to $113,000 — increases of roughly 30% over current thresholds.
The proposal marks the latest move in the Trump administration’s crackdown on the H-1B program and arrives as the future of skilled immigration in the U.S. becomes a defining business and labor question for global enterprises, outsourcing firms, and tech employers.
A sweeping wage reset for the H-1B workforce
The proposed thresholds — currently awaiting final approval from the Labor Department — would apply across sectors that depend on H-1B workers, including tech, finance, medicine, civil engineering, research, and education.
The top 500 H-1B sponsors would face a median annual wage cost increase of roughly $13 million, with the most exposed companies running into hundreds of millions in new payroll obligations.
“There is no avoiding the cost increase from this change,” said Finn Reynolds, head of insights at Lawfully. Backers argue the higher salary thresholds will prevent foreign workers from undercutting American wages and ensure visas are reserved for top-tier talent.
“There has to be a way to ensure that you’re not distorting the labor market,” said Ronil Hira, associate professor of political science at Howard University.
“The simplest way to do that is to ensure that the folks who are being brought in really do have specialized skills, and the way to signal that is by wages,” Hira added.
Foreign graduates and mid-level talent face the biggest squeeze
The new rules will hit foreign graduates of U.S. universities hardest, ending what has been a straightforward two-decade pathway — graduate, secure one to three years of work authorization, then find an H-1B sponsor.
That route launched the careers of business titans including Alphabet CEO Sundar Pichai and Microsoft CEO Satya Nadella, both former international students who went on to lead U.S. tech giants.
“That’s an extra cost employers haven’t planned for, and it’s going to cause them to have to pay well above market in an already competitive market in a lot of places,” said Kevin Miner, a partner at immigration law firm Fragomen.
The H-1B will likely shift toward being a pathway only for established foreign workers who can justify higher salaries, while some companies — particularly outside manufacturing — may respond by moving roles overseas to control costs.
The proposal carries direct implications for the global outsourcing industry, where IT services firms, staffing providers, and offshore vendors have long used the H-1B to deploy specialized engineers onto U.S. enterprise projects.
As Washington tightens onshore hiring economics, demand for offshore delivery in India, the Philippines, and Latin America is expected to accelerate — giving providers that can scale specialized talent abroad a clear opening, while squeezing U.S. employers caught between rising labor costs and shrinking access to global skilled workers.
