How to Preserve the Spirit of H1B Reform While Protecting Innovation

The administration’s decision to introduce a $100,000 annual fee on H1B visa applications and renewals is one of the boldest moves in decades on immigration and labor policy. The intent is clear and commendable: protect American jobs, prevent abuse of the system, and ensure that companies do not use visas to undercut wages for domestic workers. These are worthy goals. No one can argue with the idea that the United States should safeguard its workforce and preserve opportunities for American talent.

But as with any sweeping policy, the execution matters. And in this case, a one-size-fits-all approach risks unintended consequences that could undermine the very innovation economy that keeps America strong. That is why we need to think carefully about exceptions—or more precisely, a framework that protects American jobs while still enabling startups and smaller technology companies to hire the specialized talent they desperately need.

Big Tech will manage this change without much difficulty. The largest companies in the world have the resources to absorb an extra $100,000 per foreign engineer without hesitation. For them, this fee is a line item, not a crisis. But for startups and emerging tech firms, the calculus is entirely different. A young company might raise only a few million dollars to cover its first years of operation. Every dollar goes toward salaries, product development, and customer acquisition. Adding $100,000 per employee is not a minor inconvenience. It is often the difference between survival and failure.

The administration’s goal of protecting American workers is noble. Yet startups are not abusing the system. They are not seeking visas as a way to save money. Quite the opposite: they turn to global talent because the specialized skills they need are often scarce in the domestic labor pool. Fields like artificial intelligence, biotechnology, cybersecurity, and advanced robotics require expertise that cannot always be sourced locally. When a founder looks abroad for talent, it is not because they want to bypass Americans. It is because they cannot find enough Americans with the skills to fill these roles.

Without access to that global talent, startups are left with few choices. They can hire overseas and build teams abroad, exporting both jobs and intellectual property. They can scale back their ambitions, slowing innovation and growth. Or they can shut down altogether. None of these outcomes serve the American economy, and none align with the administration’s broader goals of strengthening the nation’s workforce and protecting opportunity.

That is why an exception for startups makes sense. The administration can achieve its objectives while also preserving the vitality of our innovation ecosystem. A carefully designed waiver or exemption for early-stage technology companies hiring specialized technical talent would strike the right balance. Such an exception could be tied to revenue thresholds, employee headcount, or specific occupational categories where shortages are well documented. By setting clear guardrails, policymakers could prevent abuse while still giving young companies the breathing room they need to compete.

It is worth remembering that some of the most iconic American companies were built by immigrants or by teams that included H1B talent in their early days. Google, Tesla, and Intel are only the most famous examples. Imagine if those founders had faced a $100,000 annual fee per employee at the moment when their companies were struggling to gain traction. Would they have been able to build their businesses in the United States? Or would they have taken their ideas elsewhere? America’s leadership in technology exists today because the door was open then. It should remain open now—especially for the startups who represent the next wave of growth.

By granting an exception for startups, the administration would not be weakening its reform. It would be strengthening it. It would demonstrate that the government can be tough on abuse while still flexible enough to nurture innovation. It would send a signal that America is serious about protecting workers while also serious about remaining the global leader in technology and entrepreneurship.

We should applaud the administration for taking on a difficult issue and confronting the challenges of immigration and labor head-on. But we should also work together to refine the policy in a way that avoids collateral damage. Protecting jobs and protecting innovation are not mutually exclusive. With an exception for startups, we can achieve both.

If we fail to act, the unintended consequence is clear. Big Tech will get stronger, startups will get weaker, and the next generation of transformative companies may well be born in Toronto, Berlin, or Shanghai instead of in San Francisco, Austin, or Boston. That is not the outcome anyone intends. With thoughtful adjustment, we can ensure that it does not happen.

The administration has made a strong start by signaling its intent to reform the H1B system. Now let us take the next step together. Let us create an exception for startups so that America continues to be the place where the best ideas in the world turn into the best companies in the world.