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New Visa Changes Hurting California Businesses Who Rely on Foreign Workers

A hotel with multiple stories located in California.
Source: Sdkb/Wikimedia

On April 1, new changes to how the U.S. government handles certain visa fees went into effect. These changes are already starting to affect California businesses in several industries, that have relied on recruiting foreign workers through visa programs in recent years.

In particular, H-1B visa applications, which allow companies to hire skilled foreign workers for up to six years, rose by 70% to $780. These visas, once seen by some as a way for companies to hire cheaper high-skilled workers are no longer as cost-effective.

In 2023, California ranked first in the nation for H-1B approvals, having 16% of the approvals in the country. H-1B approvals in California totaled more than 19,300 that year.

While bigger companies like Google and Apple can more easily absorb increased visa costs, they put smaller businesses in a bind.

“I think it’s a real hardship for people,” said San Francisco attorney Lisa Spiegel when asked about the effect the changes are having on smaller employers. Spiegel is part of a team of 15 immigration specialists at the Duane Morris law firm and processes thousands of visa petitions per year.

Big companies have an appetite for a global workforce, spurred on by concerns about increasing diversity in the workplace and appealing to a global audience.

“We have also recognized that the fees have increased, but they haven’t increased in a way that we view them as prohibitive,” said Riley of Riot Games, a leading video game company based in Los Angeles. “The value in the diverse perspectives that [global employees] bring to the organization — they put us in a position to see a return that’s much greater than what we might pay in processing fees.”

Some California businesses that depend on foreign workers for help at farms or to staff hotels in the hospitality industry have seen visa application fees for their workers more than double. According to New American Economy, 33 percent of businesses in the hospitality industry would have to close or reduce their operations if they lost access to temporary visa program workers.

Ally Bolour, who represents clients wanting to hire foreign actors in the entertainment industry, has seen the processing time increase from two to three weeks and the fee rise by 12% for visa filing processing.

On January 31, U.S. Citizenship and Immigration Services (USCIS) published a finalized version of a rule, that for the first time since 2016, would increase immigration and naturalization benefit request fees in some cases.

On their FAQ page, the USCIS cited problems meeting their operating budget as a motivation for the rule.

“With the final rule, we can recover our operating costs more fully and support timely processing of new applications. Unlike many other federal agencies, we are almost entirely fee funded. About 96% of our funding is from filing fees, and only about 4% is from congressional appropriations,” the UCIS said.

California has one of the largest economies in the world, generating $3.89 trillion in gross state product in 2023. This also made it the US state with the largest economy. 

This large economy has become increasingly reliant on foreign and immigrant workers over the years. The California Budget and Policy Center recently estimated that over half of all California workers are immigrants or the children of immigrants.

The same report asserted that California has the largest percentage of immigrant residents of any other state in the country. Over 11 million immigrants were living in California in 2023, which represents 23% of the state’s population.

The Economic Policy Institute estimated in 2022 that at least 310,500 migrant workers are employed in California through temporary work visa programs.

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