The annual H-1B visa lottery registration — where employers apply to secure one of 85,000 available temporary work visas for high-skilled foreign nationals — is underway this month. But some labor experts warn that new restrictions in place will hinder innovation in Massachusetts.
It's the first lottery since President Trump overhauled the visa program and imposed a $100,000 fee and changed the selection process. The new H-1B visa rules have already lead to multiple lawsuits and sent companies scrambling with their hiring plans.
Large corporations will likely be able to take on the new cost of an H-1B visa, but smaller companies will be hit hard, according to Maggie O'Toole, the CEO of biotech incubator LabCentral in Cambridge.
" It's expensive to hire in the first place, and you are always wanting to get the very best person," O'Toole said. "To add $100,000 to the cost of hiring is pretty substantial for any early stage company."
Startups are a key part of the state's biotech industry because they provide crucial research and development — including for larger pharmaceutical companies — according to O'Toole.
The overhaul of the H-1B visa program "slows down" this scientific innovation, she said. And for families waiting for life-saving treatments and therapies, "it doesn't matter who is working on the science," O'Toole said.
Some early stage companies at LabCentral have struggled with hires under the new visa rules, according to O'Toole. There are people with very specialized skills who happen to be from another country and companies need access to them, she added.
Companies are looking to partner with businesses overseas or hire foreign workers as consultants to fill critical roles, O'Toole said.
In other industries like tech, companies have considered opening offices overseas " where they feel like their employees are going to be safer," said Sara Fraim, the CEO of the Massachusetts Technology Leadership Council. She said this is an economic loss because many foreign workers start companies and create jobs here.
"It's a real shame," She said. "It's a shame for the companies. It's a shame for innovation. It's a shame for our economy. There's absolutely nothing positive about it."
The H-1B visa program has had its critics for a long time; Trump took aim at the program during his first term. The Trump administration has said the program has been abused by companies looking to hire cheaper foreign workers instead of Americans.
But tech industry leaders like Fraim disagree.
" It's not that there are no very skilled, very smart American born people," she said.
"There's just not enough."
It already costs companies to hire someone on an H-1B visa. Even before Trump's overhaul, companies could spend thousands in fees, including legal expenses, to file a visa application.
"Our employers are not out there trying to figure out how to not employ American workers. It's just a narrative that just doesn't exist," said Mike Haven an attorney at Goldman and Partners Immigration Law, which helps companies retain foreign talent. "The amount of money that they spend on legal fees and the stress and the headaches that we go through, they just wouldn't do it if they could easily hire American workers."
It's unclear how this year's H-1B lottery will shake out. The registration period runs through the middle of this month. And companies will learn if they are approved for H-1B visas by the end of the month.
So far, "we have fewer applicants this year for the lottery, but not nearly as significant as I thought," Haven said.
Additionally, none of the employers Haven works with are willing to enter anyone in the lottery unless they are already here on another visa due to the $100,000 fee, he said. The new H-1B fee doesn't apply to renewals.
Haven has also see an uptick in employers looking to get foreign workers through other types of visas or green cards. For example the O-1 visa for people with "extraordinary ability" or a training program that allows students on an F-1 visa to work. At the same time, Haven said he's seen more denials in these other programs.
Trump's overhaul of the H-1B visa program will also feature a new weighted lottery that will give priority to applicants with higher salaries instead of a random selection process. That's a big disadvantage for tech startups, according to Haven.
" So it's definitely hurting a lot of employers, but also helping some," Haven said.
As the lottery process rolls on, Haven said, some companies are resigned to the fact that they likely won't be approved under the new H-1B visa process. So they're trying their luck this year and will try again next year if it doesn't work out.