A proposed $100,000 fee on H-1B visa applications by the Trump administration could impose significant financial burdens on Connecticut businesses, potentially adding $110 million in annual costs. The policy, announced Sept. 19 under a proclamation titled Restriction on Entry of Certain Nonimmigrant Workers, took effect Sept. 21 and targets specialty occupation visas commonly used by technology, finance, and healthcare firms.
Initial confusion surrounded the rule’s implementation, including whether the fee applied retroactively. Officials later clarified it does not affect petitions filed before the effective date, approved applications, or individuals already holding valid H-1B visas. There was also conflicting messaging about whether the charge would be recurring annually or a one-time payment, with White House sources eventually confirming it as a single assessment.
Over the past decade, Connecticut employers have averaged 1,104 new H-1B approvals per year. With the national cap set at 85,000 visas annually, distributed via lottery, the proposed fee could substantially alter hiring strategies, especially for mid-sized companies lacking the financial flexibility of larger corporations.
These visa holders play a vital role in key sectors such as professional and technical services, finance, insurance, manufacturing, healthcare, and education. Geographically, approvals are concentrated in New Haven, Stamford, Norwalk, East Hartford, and Hartford—areas anchored by universities, financial institutions, and advanced manufacturers reliant on international expertise.
However, nearly every municipality in the state has had at least one employer sponsor an H-1B applicant in the last ten years, underscoring the program’s broad economic footprint.
Historical data suggests that tightening H-1B access may accelerate offshoring. A 2024 study of U.S. multinationals found that each visa denial leads to an average of 0.4 hires abroad, with highly globalized firms substituting nearly one foreign worker per rejection.
This shift risks creating a two-tiered labor market: large enterprises can absorb the cost and maintain global talent pipelines, while smaller and mid-sized firms may be forced to forgo skilled workers or relocate innovation activities overseas.
The concern extends to research and development. When domestic hiring becomes constrained, companies often expand operations abroad, moving not just jobs but also R&D functions. For a state investing heavily in innovation ecosystems tied to academic institutions, this could undermine long-term competitiveness.
Beyond the proposed $100,000 fee, employers already face multiple mandatory charges, including a $215 electronic registration fee, base filing fees ranging from $460 to $780, an asylum program fee ($300–$600), the American Competitiveness and Workforce Improvement Act fee ($750–$1,500), a $500 fraud prevention charge, a $4,000 fee for firms with high H-1B/L-1 usage, and a $2,805 optional premium for expedited processing.
Connecticut faces additional economic headwinds, including a stagnant labor force growth and net domestic outmigration of nearly 6,000 residents in the previous year. International migration, which brought in 36,000 people in 2024, helps offset this trend, with 20% of the workforce born outside the U.S.
Policymakers now face the challenge of supporting local businesses while preserving the state’s appeal to global talent in a tightening regulatory environment.
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1B Visa: Connecticut’s Latest Economic Challenge » CBIA
The Trump administration’s new $100,000 fee for H-1B visa applications represents another significant federal policy shift with broad ramifications for Connecticut’s economy. n nThe White House announced the policy in a self-described proclamation released Sept. 19 called Restriction on Entry of Certain Nonimmigrant Workers. n nEffective Sept. 21, the administration will assess a $100,000 fee on H-1B petitions. The visas are largely designed for nonimmigrants hired to work temporarily in specialty occupations by U.S. companies. n nThe original announcement created widespread confusion, with administration officials later clarifying that the fee “does not apply to individuals who are the beneficiaries of petitions that were filed prior to the effective date of the proclamation, are the beneficiaries of currently approved petitions, or are in possession of validly issued H-1B non-immigrant visas.” n nCommerce Secretary Howard Lutnick also said the visa fee must be paid annually, with White House officials later saying that it will be a one-time assessment. n nWhile the rollout has been chaotic, with contradictory statements from different government officials about who pays what and when, business community responses suggest this will be a costly change to a crucial workforce program. n nConnecticut’s H-1B Environment n nConnecticut employers averaged 1,104 new H-1B approvals annually over the past decade. (Issued through an annual lottery, the visas are capped at 85,000 per year across the country.) n nShould the administration’s proposed $100,000 fee hold up, this translates to roughly $110 million in additional costs for employers each year. n nAn important caveat, and one that reflects the lack of clarity regarding the new policy, is the uncertainty as to whether the fee will apply to all new visas, or only those applying from outside the country. n nWhat is clear is that these H-1B visa holders represent critical talent flowing into key Connecticut industries. n nThe top destinations for these visa holders over the past decade were the professional and technical services, finance and insurance, manufacturing, healthcare, and education sectors. n nThe geographic concentration further tells the story of Connecticut’s knowledge economy. n nNew Haven, Stamford, Norwalk, East Hartford, and Hartford lead in H-1B approvals, reflecting the concentration of universities, financial services firms, and advanced manufacturers that depend on global talent pools. n nHowever, it is worth noting that nearly every town and city in the state has an employer that sponsored an H-1B visa over the past decade. n nAccelerating Offshoring n nWhile the stated goal of the policy is to encourage the recruitment and development of domestic talent, research indicates that restrictions of the H-1B program in the past have tended to accelerate offshoring of talent. n nA 2024 study tracking U.S. multinational companies found that for every H-1B visa rejection, firms hire 0.4 workers abroad on average. n nThe most globally connected companies—often the largest and most innovative—hire 0.9 workers abroad per rejection, nearly achieving full substitution. n nThe fee structure threatens to create a bifurcated labor market. Large corporations with deep pockets and an international footprint can continue accessing global talent, while mid-sized firms, the backbone of Connecticut’s manufacturing and professional services sectors, face the difficult choice of paying high prices or forgoing access to top-tier talent. n nThis dynamic mirrors broader economic trends we’ve seen with other recent policy changes. Just as tariffs have prompted businesses to frontload imports and reconsider supply chains, the H-1B fee could trigger a reconfiguration of where companies locate their most valuable intellectual work. n nOf particular concern for the state is the possible impact on research activities. n nThe same study showing the offshoring of talent in response to visa restrictions also shows that R&D employment is particularly affected when companies expand existing foreign operations. n nWhen companies can’t hire skilled immigrants domestically, they move those jobs—and by extension their innovation activities—overseas. n nLooking Ahead n nIn addition to the new application fee, employer sponsors also must pay H-1B processing fees, which U.S. Citizenship and Immigration Services raised last year. Those fees include: n n$215 H-1B electronic registration fee n nBase filing fee of $780 for large employers and $460 for small employers and nonprofits n nAsylum program fee of $600 for large employers and $300 for small employers, with nonprofits exempt n nAmerican Competitiveness and Workforce Improvement Act fee of $1,500 for large employers and $750 for small employers n nFraud prevention and detection fee of $500 for new petitions and those changing employers n n$4,000 fee for companies with a high proportion of H-1B or L-1 employees n n$2,805 optional premium for expedited processing n nFor a state that has invested heavily in building innovation ecosystems around universities and research institutions, disruptions to those ecosystems represent a threat that extends beyond the immediate fiscal impact of the fee itself. n nThe new H-1B fee adds another layer of uncertainty to an already complex economic environment. n nCombined with ongoing tariff impacts, federal funding cuts, and market volatility, Connecticut faces a convergence of policy driven headwinds that require careful navigation. n nConsider the state’s labor shortage, with the population of those working or looking for work falling by 4,100 people In August and 12-month growth essentially flat. n nConnecticut ranked 40th in the country for net domestic migration last year, losing almost 6,000 residents to other states. International migration offset that, with 36,000 people immigrating to the state in 2024—20% of the state’s workforce was born outside the country. n nThe challenge for state policymakers will be developing strategies that help businesses adapt while maintaining Connecticut’s competitive position in attracting and retaining the talent that drives our knowledge economy.