H-1B Extension Fee: A Recurring Cost That May Not Deter Retention
US expands H-1B extension fees to more employers from Sept 9. Experts say retention value may outweigh the recurring cost.
A new US rule expanding visa extension fees for certain H-1B and L-1 employers is unlikely to push companies away from retaining skilled foreign workers, according to Danielle Goldman, Co-founder and CEO of Build. The added charge, she argues, may be less than the cost of losing and replacing experienced talent.
The US Department of Homeland Security (DHS) will apply the existing USD 4,000 fee on H-1B petitions and USD 4,500 fee on L-1 petitions to certain extension applications starting September 9. The rule targets companies with at least 50 US employees where more than half of the workforce holds H-1B, L-1A, or L-1B status.
Previously, extensions filed by the same employer for the same employee were generally exempt from the fee. Under the revised interpretation, covered employers must pay the 9/11 Response and Biometric Entry-Exit Fee for all qualifying extension-of-status petitions, even when the worker continues in the same role.
Goldman noted that the fee now becomes a recurring expense rather than an upfront hiring cost. Since employers typically file three-year H-1B petitions, the charge could recur every three years for each covered worker. For firms with hundreds or thousands of such employees, this could become a significant workforce expense.
However, she stressed that the fee arrives at the extension stage, after an employee has already proven their value. "For a skilled worker an employer already wants to keep, a future USD 4,000 additional fee is unlikely to outweigh the cost of losing and replacing that talent," she said.
The impact may be especially pronounced for Indian professionals, many of whom remain in H-1B status for years while waiting for employment-based green card availability. DHS estimates that the share of H-1B petitions subject to the fee among covered firms will rise from about 27 per cent (fiscal years 2018-2025) to roughly 75 per cent under the new interpretation.
The financial responsibility remains with employers, as DHS statutes and regulations specify that the fee must be paid by the company, not the worker.