$100,000 H-1B visa fees are a distraction from real reform

With America’s global leadership in scientific innovation facing unprecedented competition, getting high-skilled immigration right should be a top priority in Washington. The first task for the White House is to get out of its own way.

The administration sparked fear and confusion last month by announcing that it would impose a $100,000 fee on H-1B visas — temporary work permits designed for college-educated foreigners. There’s an element of bluster to the new policy: It only applies to new applicants outside the country, allows for certain exemptions and, in any case, expires in a year. Nevertheless, it threatens to discourage companies from investing in the US, lest they’re blindsided by other haphazard and costly changes that impact their workforce. Health care, education and religious organizations are challenging the fees in court.

The White House says it’s aiming to stamp out “large-scale abuse” of the H-1B program. The problem is real. For the past two decades, the government has issued these highly coveted visas using a lottery system. Taking advantage of weak oversight of wage rules, IT and consulting companies have flooded the pool with lower-paid applicants — submitting multiple petitions for a single worker, at times for jobs that don’t exist. Fortune 500 companies then hire these firms to provide low-cost staff for back-office work, some of whom later transfer that business overseas.

At the same time, these companies are crowding out more deserving applicants. Because visas are capped at 85,000 annually, with some exemptions, thousands of talented workers get turned away every year simply for lack of better luck. Employers say the shortage of skilled labor is slowing advancements in critical fields including artificial intelligence, robotics and biotechnology.

The answer, however, isn’t to make the H-1B program — to borrow a phrase from Commerce Secretary Howard Lutnick — so “uneconomical” that it’s abandoned altogether. The White House would be wiser to scrap the new fee entirely, as the Chamber of Commerce and others have argued.

The goal of any reform should instead be to reward the highest earners, ensuring American companies can hire the world’s top talent and US workers benefit from rising wages. A more recent proposal from the administration moves in this direction. Days after the fee announcement, the Department of Homeland Security proposed a rule that would end the current lottery system and instead hand out visas by wage level.

Even this system could remain susceptible to cheating — for example, if employers assign high salaries to low-paid roles. But the bigger issue is that the rule is sure to be challenged in court. The job of allocating visas — whether by wages or any number of other factors, including age and education — should be left to Congress. If potential gaming can be addressed, the program should also be expanded judiciously.

Sensible visa reform could hardly be more urgent. For decades, corporate America’s openness to foreign talent has given the US a natural advantage over other countries. That gap is rapidly narrowing. China, which just introduced a new visa for foreign professionals specializing in science and technology, has made stunning advancements in artificial intelligence and pharmaceutical innovation. European countries are offering new incentives to attract top researchers and scientists. The last thing the US should be doing is making it harder for prized recruits to find their way to its shores.