H-1B Extension Fee Explained: Why US Firms May Still Choose to Keep Skilled Indian Workers

What happens when keeping an experienced employee costs a lot — but letting them go could cost even more?

That is the calculation some US companies may soon face as a new H-1B visa fee expands to cover certain extension applications.

The US Department of Homeland Security (DHS) is extending an existing USD 4,000 fee on H-1B petitions to certain visa extensions from September 9. The change could be particularly important for companies that rely heavily on foreign skilled workers, including thousands of Indian professionals who spend years on H-1B visas while waiting for employment-based green cards.

But will an extra USD 4,000 actually make companies give up workers they already know and want to retain? Probably not, according to Danielle Goldman, Co-founder and CEO of Build.

What exactly is changing?

The fee itself isn't new. What is changing is when companies have to pay it.

DHS has expanded the existing USD 4,000 H-1B and USD 4,500 L-1 fee to certain extension-of-status applications. The new rule applies to employers with at least 50 employees in the US, where more than half of their US workforce collectively holds H-1B, L-1A or L-1B status.

For these employers, the fee will apply when they seek an extension of status for a covered worker — even if that employee is simply continuing in the same job with the same company.

Why might companies still pay it?

Because by the time an H-1B extension comes around, the company already knows what it has invested in. The employee has worked there. They have built experience, institutional knowledge and relationships. Replacing them could mean recruiting costs, lost productivity, training time and the risk of not finding someone with comparable skills. Goldman said that makes the additional fee less significant when compared with the cost of losing an experienced employee.

“While the administration may hope higher fees discourage employers from relying on foreign talent, this USD 4,000 is not due when someone is first hired. It comes at the extension stage, after the employee has had time to prove their value,” Goldman said.

Her conclusion is straightforward. “For a skilled worker an employer already wants to keep, a future USD 4,000 additional fee is unlikely to outweigh the cost of losing and replacing that talent,” Goldman said.

So, who actually has to pay the fee?

Not every company sponsoring an H-1B worker. This is one of the most important details of the new rule. Goldman said it applies only to employers that meet both conditions: having at least 50 US employees and having more than half of their US workforce in H-1B or L-1 status.

“Importantly, this is not a USD 4,000 fee increase for every company that sponsors an H-1B. It applies to employers with at least 50 U.S. employees where more than half of their U.S. workforce is in H-1B or L-1 status,” she said.

So a company that sponsors a small number of H-1B employees but does not meet that workforce threshold would not automatically face the new extension fee.

Why could the change become expensive for big employers?

Because the fee can keep coming back. Most employers file H-1B petitions for the maximum three-year period. That means the additional charge could recur when the worker's status is extended again. Goldman described this as the biggest business impact of the rule.

“The biggest impact of this rule is that it turns what was largely an upfront H-1B hiring cost into a recurring cost for employers that rely heavily on H-1B and L-1 workers,” Goldman said.

For a company with hundreds or thousands of H-1B employees, even a USD 4,000 charge per qualifying extension can quickly become a sizeable workforce expense. “Beginning September 9, those employers will have to pay the additional USD 4,000 not only when bringing on certain new H-1B workers or transferring an H-1B employee, but also when extending an existing employee's status. For employers with hundreds or thousands of H-1B workers, that can become a significant recurring workforce expense,” she said.

Why does this matter particularly to Indian workers?

Indian professionals are among the biggest beneficiaries of the H-1B programme, and many remain in the visa system for years. The reason is the long wait for employment-based green cards.

For such workers, repeated H-1B extensions can become part of a years-long immigration journey. That means the new fee isn't necessarily a one-time business expense. For companies that continue sponsoring the same employee, it can become a recurring cost.

The key question, therefore, may not be “Is the worker worth another USD 4,000?” It may be “Is replacing this worker worth more than USD 4,000?”

Wasn't the fee already being charged?

Yes — but not generally in the same circumstances.

DHS says the rule does not create a new fee rate. Instead, it expands the circumstances in which the existing 9/11 Response and Biometric Entry-Exit Fee applies. Under the earlier interpretation, extensions filed by an existing employer for the same employee were generally exempt when the separate fraud-prevention fee was not triggered.

DHS now says that interpretation was incorrect and that covered employers must pay the biometric fee for qualifying extension-of-status petitions, regardless of whether the fraud-prevention fee applies.

The financial responsibility remains with the employer.

How much bigger could the impact be?

Quite a bit. Between fiscal years 2018 and 2025, around 27% of H-1B filings by covered employers incurred the biometric levy. Under the new interpretation, DHS estimates that roughly 75% of their H-1B petitions would have been subject to the charge.

That is a substantial jump.

For companies heavily dependent on H-1B talent, then, the story isn't simply about a USD 4,000 increase. It is about turning a cost that was largely associated with bringing foreign talent into the US into a recurring cost of keeping that talent.

And for an employee who has already become difficult to replace, that distinction could matter more than the fee itself.

(With inputs from ANI)