When word got out about the Trump administration’s policy shift on H1B visas, current visa holders were on planes to travel out of the country and desperately insisted on getting off – concerned they might not be allowed back in. Companies were telling their successful H1B candidates to show up in the United States within 24 hours. It’s been chaos at airports.

A flight from US to India. People boarded the flight. Found out about the H1B news. Immediately disembarked fearing they won’t be allowed re-entry. Crazy pic.twitter.com/pgoSwK24UC

— Gabbar (@GabbbarSingh) September 20, 2025

Emirates out of San Francisco was delayed so passengers could get off.

Ladies and Gentlemen, this is the captain speaking. Due to the current circumstances obviously that are unprecedented for us at Emirates, we are aware that a number of passengers do not wish to travel with us, and that’s particularly fine.

Chaos in Emirates flight at SFO Airport. Delayed by 3 hours after many Indian H1B holders bound for India disembarked from the plane after hearing the news of $100K fees for H1B.

Many Indian passengers apparently left the aircraft after receiving calls from their employers not… pic.twitter.com/kZJG642RDz

— Drunk Journalist (@drunkJournalist) September 20, 2025

Here was Microsoft’s warning to employees:

I can imagine. pic.twitter.com/C6eHxQ08LI

— Aaliyah Briggs (@antiGOVTt) September 20, 2025

To foil Microsoft’s advice, for those trying to make it to the U.S. under the wire for the start of these fees, online activists tried to tie up remaining airline inventory for departing flights to block ticket purchases.

Frogposter has single handedly spiked the price by confusing the computer system to $6k for a flight pic.twitter.com/CT3YJRxuTE

— Callum (@AkkadSecretary) September 20, 2025

Skilled workers who follow the law are exactly whom the Trump administration has said that they want coming to the U.S.

While the H1B program itself doesn’t always perfectly align with its stated goals, we should want more bright minds from the rest of the world coming here, not fewer.

And the policy, as-announced, is unclear at best in terms of cost and frequency of payments or how broadly it applies. The administration has said it’s subject to discretion – they can exempt companies and industries – making it a scheme to reward favored supporters and punish opponents (cronyist industrial policy).

With unemployment running at 4.3%, these workers aren’t ‘taking American jobs’. In fact, research shows that a company that gains access to global talent through the H1B program wins. (HT: Marginal Revolution).

• Since there are only a limited number of 3-year H1B visas (renewable for a second 3 years), and demand exceeds supply, we can look at the performance of companies getting lucky securing H1B workers versus those trying to sponsor them but that aren’t selected.

• And winning the H1-B lottery makes a big difference in firm outcomes (which means firms can’t just hire U.S. workers and get the same outcomes). In fact, for 2,000 tech startups that are studied, one extra high-skilled worker increases the likelihood of a successful IPO within 5 years by 23%.

  We find that a firm’s win rate in the H-1B visa lottery is strongly related to the firm’s outcomes over the following three years. Relative to ex ante similar firms that also applied for H-1B visas, firms with higher win rates in the lottery are more likely to receive additional external funding and have an IPO or be acquired. Firms with higher win rates also become more likely to secure funding from high-reputation VCs, and receive more patents and more patent citations. Overall, the results show that access to skilled foreign workers has a strong positive effect on firm-level measures of success.

The administration today clarified and walked back the fee slightly, stating that it won’t apply to existing H1B holders. Still, it’s a strategic gift to Canada.

And to be clear, the $100,000 H1B Visa fee is not legal. No law supports it and there’s been no administrative rulemaking. President Trump signed a proclamation announcing the fee, effective September 21, 2025.

• Fees for visas and immigration are set by Congress and agencies acting under laws passed by congress. No law gives the President or Department of Homeland Security discretion for this. There is explicitly a fee schedule for the H1B program that’s been set legally. And there’s no grounds for arguing that the $100,000 fee is related to the cost of the program. The executive branch can only set fees to recover costs under 8 U.S.C. § 1356(m).

• A shift in skilled immigration policy of this magnitude likely qualifies as a ‘major question’ that the Supreme Court has made clear falls under the purview of Congress (see broadly, West Virginia v. EPA and Biden v. Nebraska).

• If this is merely a rulemaking, though, it would have to follow the Administrative Procedures Act including notice nad comment (or outline how it’s exempt), avoid arbitrary and capricious decision making (tough for a suddent $100,000 fee) and stay within authority granted by statute (which this clearly is not).

At best the administration might argue that the President has broad authority under 8 U.S.C. § 1182(f) to “suspend the entry of any class of aliens” or impose restrictions on entry – but this is a visa program fee, not the suspension of entry or a restriction on entry and doing so in contravention to fees that have already been set in line with statute. Courts have upheld suspending entry (e.g. Trump v. Hawaii) and to require private health insurance proof (Doe v. Trump), but not to specify price of entry.

Like the tariffs that have lost in court in every decision so far and will go before the Supreme Court for oral argument in November (I’m predicting a 6-3 loss for the administration), this policy is probably illegal but will cause significant disruption before that’s finally adjudicated.