Key Points

In a lawsuit filed in the Northern District of California, the plaintiffs argued that Trump's proclamation, signed on September 19, was riddled with "multiple errors" and "ignores the benefits of the H-1B visa program to the American economy."

The case also highlighted that the $100,000 visa application fee is "unprecedented, unjustified and unlawful."

"The Proclamation's imposition of a draconian fee is unprecedented. No President has, without Congressional authorization and by fiat, imposed a market-wide penalty for purported misuse of a program--disregarding and overriding an existing, complex statutory scheme--on employers seeking to hire workers under a visa program Congress created specifically for that purpose," it said.

The complaint said that "the President has no authority to unilaterally alter the comprehensive statutory scheme created by Congress" and that the option of exceptions "opens the door to selective enforcement and corruption."

The plaintiff includes many immigration and advocacy groups, including the Justice Action Center, South Asian American Justice Collaborative, and Democracy Forward Foundation, but no leading tech company.

While signing the proclamation, Trump had said the "incentive is to hire American workers."

"We need workers. We need great workers, and this pretty much ensures that," Trump added.

Commerce Secretary Howard Lutnick had also defended the move, saying the policy would discourage companies from hiring foreign workers.

"So, the whole idea is, no more will these big tech companies or other big companies train foreign workers. They have to pay the government $100,000, then they have to pay the employee. So, it's just not economic. You're going to train somebody. You're going to train one of the recent graduates from one of the great universities across our land, train Americans. Stop bringing in people to take our jobs. That's the policy here. $100,000 a year for H-1B visas," he explained.

The proclamation caused immense confusion as it seemed to suggest that it would impact the current H-1B visa holders, who may face hurdles in returning to the United States.

The White House issued a clarification to IANS on September 20, saying that this is a "one-time fee" that applies only to new visas and not renewals or current visa holders.

Days later, the US Department of Homeland Security (DHS) also proposed to "amend its regulations" governing the H-1B visa process.

The DHS plan sought to scrap the existing lottery system and implement a weighted selection process that it says would favour the allocation of H-1B visas to higher-skilled workers.

India-born workers received over 70 per cent of the total approved H1-B visas in 2024, primarily due to a huge backlog in approvals and a high number of skilled immigrants from India.

- IANS