The Big Story: Court gives 100k H-1B visa fee a green light
A federal judge upheld the Trump administration’s executive order imposing a $100,000 fee on new H-1B visas for high skilled workers, setting up the high-skilled immigration visa program to become even less accessible for startups. In a decision issued in late December, a judge for the District Court of D.C. ruled that the administration acted within executive authority when it made access to H-1B visa applications contingent on the six-figure payment to the federal government. The ruling—which has already been appealed—marks the first in a handful of legal challenges to the policy and comes as employers already face high H-1B costs and long waits. The new fee restricts the program’s usefulness for the technology industry broadly and removes H-1B visas as an option for startups entirely.
Startups have warned that this change would have far-reaching consequences across the innovation ecosystem. In a letter last year, more than 30 startups founders, investors, and ecosystem organizations called on the administration to reverse the $100,000 fee. As the letter explains, the current H-1B process is already unreliable, time-consuming, and difficult for startups to navigate given tight funding obstacles and unpredictable hiring timelines. Adding a $100,000 fee will put the program out of reach entirely for many startups. These challenges, compounded by other recent changes—including expanded social media vetting requirements and introduction of a H-1B lottery system weighted to favor higher wages—have created an increasingly uncertain and restrictive environment for founders and potential early-stage employees. This directly impacts early-stage startups that are typically trying to bring in just one or two essential hires, as well as decreasing the overall talent pool in the tech industry.
A pro-innovation, pro-startup immigration system should prioritize clear, accessible pathways for high-skilled talent, including making the H-1B system more transparent, predictable, and affordable, creating a visa specifically for startup founders, and strengthening the International Entrepreneur Parole program. If courts ultimately allow the $100,000 fee to stand, policymakers should, at a minimum, exempt startups and their early employees from the new cost, and pursue alternative mechanisms for global talent to bring their skills and ideas to the U.S.
Policy Roundup:
FCC plans to expand unlicensed spectrum. Federal Communications Commission Chairman Brendan Carr announced this week that the agency will vote at its monthly meeting later in January on an order expanding unlicensed use in the 6 GHz band. This expansion of unlicensed spectrum will support more Wi-Fi capacity and make more airwaves available for connected devices, including those developed and used by startups.
Court blocks Texas age verification law. A federal judge temporarily blocked a Texas law late last month that would have required app stores and developers to verify users’ ages and obtain parental consent for young users’ purchases and downloads. The Texas law is one of many similar proposals at the state and federal levels that would change how Internet companies have to identify and interact with young users, most of which have inherent tradeoffs for privacy, security, and startup competitiveness.
House votes on extending ACA rights subsidies as Senate path remains uncertain. This week, the House passed legislation renewing enhanced Affordable Care Act subsidies that expired at the end of last year, though the fate of the bill in the Senate is uncertain. Millions of Americans have seen their premium payments more than double, raising costs, including for startup founders and early employees, and affecting talent access and workforce stability across the innovation ecosystem.
Pressure mounts on Congress to reauthorize SBIR. Congress has yet to reauthorize the Small Business Innovation Research (SBIR) and Small Business Technology Transfer programs, which lapsed in September, leaving key agencies unable to issue new Phase I and II awards. For startups that rely on SBIR as a primary source of non-dilutive capital to fund early-stage R&D, the continued delay disrupts innovation pipelines, and Congress should move quickly to restore a program that has long supported entrepreneurship.
Student loan wage garnishment resumes for millions of borrowers. The Department of Education has restarted federal wage garnishment for borrowers in default, allowing up to 15 percent of after-tax wages to be withheld. For the innovation ecosystem, rising student debt burdens make it harder for founders and early employees to take risks to join—or build—startups.
On the Horizon:
TUE 01/13: The House Financial Services subcommittee on digital assets, financial technology, and artificial intelligence will convene a hearing to examine how financial technology innovations and regulatory frameworks are affecting American consumers at 10:00 AM ET.
TUE 01/13: The House Ways and Means subcommittee on trade will convene a hearing to examine policies shaping U.S. innovation and technology leadership in global markets at 2:00 PM ET.
WED 01/14: The House Science, Space, and Technology subcommittee on research and technology will convene a hearing to assess the Administration’s AI Action Plan and its implications for innovation and research at 10:00 AM ET.
WED 01/14: The House Education and Workforce Committee will convene a hearing to discuss workforce, education, and infrastructure considerations needed to prepare the U.S. for AI adoption at 10:15 AM ET.
WED 01/14: The House Energy and Commerce subcommittee on communications and technology will convene a hearing to conduct oversight of the Federal Communications Commission at 10:15 AM ET.
Startup Roundup:
#StartupsEverywhere: San Juan, Puerto Rico. Professor Alejandro Mieses Castellanos is the founder and CEO of TerraFirma, a Puerto Rico-based startup that utilizes satellite data to provide localized geographic information for academic research, land management, and development purposes. We sat down with Professor Mieses, to talk about his approach to intellectual property, the state of grant funding, and more.
