What the New H-1B Fee Means for MSP Staffing

A federal fight over work-visa fees is reshaping how MSPs will need to source technical talent, even for shops that have never sponsored a visa themselves. The first fee got struck down in court, but a second, broader fee is already moving through formal rulemaking behind it. The practical result is a tighter, more expensive market for imported technical labor, and a stronger case for building capacity at home.

How much does the new H-1B fee actually cost?

President Trump's September 2025 proclamation added a $100,000 charge to every new H-1B petition filed for a worker outside the United States, taking effect September 21, 2025, according to ChannelE2E's coverage of the fee's rollout. A federal judge in Massachusetts vacated that fee in June 2026, and Fisher Phillips reports the fee has not been collected since, though the administration's appeal is still pending before the 1st Circuit.

That pause has not ended the cost pressure. The Department of Homeland Security has published a separate proposed rule, built on different legal authority, that would add a $103,265 fee to roughly 85,000 cap-subject H-1B petitions a year, which Fisher Phillips estimates would generate about $8.8 billion annually for DHS. Public comments on the rule closed September 24, 2026, and DHS has not yet published a final version.

The H-1B program itself is a small, capped pipeline, not a general source of IT labor. ChannelE2E notes that the government caps new H-1B visas at 65,000 a year, plus another 20,000 for applicants with a U.S. master's degree or doctorate, and every visa requires at least a bachelor's degree in a specialty field. That scarcity is why a fee this size lands hardest on the large offshore staffing and consulting firms that file thousands of petitions a year, and why it barely touches MSPs that already fill most seats with domestic hires.

While the proclamation fee was in effect, Forrester estimated that if providers kept filing H-1B petitions at pre-fee volume, the added cost across the industry would reach about $2 billion a year, a roughly 3 percent hit to provider margins. Forrester also expected onsite billing rates on new contracts to rise by 2 to 3 percent as providers passed the added cost through to clients.

What happened to H-1B demand after the fee hit?

The proclamation fee was only in effect for about nine months, but the drop in filings it caused is the clearest evidence of what a fee at this scale does to employer behavior. Bloomberg Law reports that DHS lottery data from while the fee was active show H-1B entries fell 85 to 100 percent at the hardest-hit employers, with Infosys cutting more than 8,100 entries, a 91 percent drop, and Tata Consultancy Services cutting more than 5,600 entries, a 95 percent drop, from the prior year. Cognizant filed zero lottery entries that cycle, down from 3,752 the year before, according to the same Bloomberg Law report. DHS had described H-1B demand as weakly responsive to price beforehand, which makes a pullback of that size notable.

That history is the backdrop for the new rule. An analysis from IFP, cited by Bloomberg Law, projects the proposed rule could reduce H-1B demand by 63 to 91 percent depending on the estimation method used. That is roughly the same scale as the drop already seen under the first fee. Whatever the final number, the direction is consistent: employers are filing far fewer H-1B petitions than before, and nothing in the current docket points back toward the old volume.

Does this matter if your MSP never sponsors a visa?

Yes, indirectly. Most small and mid-sized MSPs never sponsor an H-1B visa themselves, but the fee still reaches them through the broader technical labor market. Victor Janulaitis of Janco Associates told ChannelE2E the fee effectively bars most SMBs from the H-1B program, a significant shift given that more than half of all IT jobs before the pandemic sat inside SMBs. Analyst Shelly Kramer, also interviewed by ChannelE2E, said larger consultancies and outsourcers facing the fee are already shifting toward nearshoring and offshoring rather than paying it, which tightens competition for the same domestic technical talent MSPs already compete for.

Paul Nashawaty, an analyst at theCUBE Research, told ChannelE2E that smaller MSPs are less likely to feel the fee directly but more likely to feel it through a scarcer, pricier labor market for cybersecurity, cloud, and infrastructure skills, the same roles MSPs already struggle to fill. He expects the pressure to push more companies toward in-house training and certification instead of competing for a shrinking visa-eligible talent pool.

That broader labor market was already tight before any of this started. CompTIA's State of the Tech Workforce 2026 report puts the median tech wage in the United States at $112,805, more than double the median wage across all occupations in the U.S. labor force. Visa-cost pressure is more likely to widen that gap than close it.

Consider a hypothetical 15-technician MSP that has leaned on a staffing partner to place one senior cloud engineer through an H-1B petition most years. If DHS finalizes its pending rule anywhere near the proposed amount, that single hire could carry a six-figure government fee on top of salary and placement costs before the engineer closes a single ticket. Redirecting that same budget into certifying three existing technicians into cloud and security specialties over the same year spreads the investment across people who already know the business and are not exposed to a single federal rulemaking decision.

What should MSPs do about it?

The practical response does not involve sponsoring your own visas. It means building technician capacity in ways that do not depend on an increasingly expensive and uncertain global labor market. Structured training and certification pathways grow junior technicians into skilled roles faster than you can hire experienced ones away from a shrinking pool, and that pathway is not exposed to the next court ruling or federal rule. Forge University builds that pathway for MSPs that want a repeatable way to train and certify technicians instead of competing for the same scarce experienced hires everyone else is chasing.

This is also a good prompt to look at succession risk directly. If any client-facing SLA depends on one specialized engineer, you already have a staffing single point of failure that a pending federal fee rule just made more expensive to replace through the open market. Cross-training a second technician into that same specialty, even at a slower pace, costs less than discovering the gap the day that engineer leaves.

The other lever is reducing how much technician time each client actually requires. White-labeled, AI-assisted tools can absorb tier-1 and repetitive provisioning work that would otherwise need a new hire, which matters more as the cost of adding headcount keeps climbing and getting less predictable. If you are not sure where your own stack has the most headcount-saving upside, the stack builder walks through your current tools and client mix and flags where a packaged tool would free up the most technician hours.

Either path works better as a deliberate plan than as a reaction to the next rulemaking cycle. The full Actiforge product catalog lays out every tool available to white label today, so you can match what you add to where your technician hours are actually going.

The H-1B fee fight is a policy outcome outside your control, but how you build technician capacity in response is not. See the full stack and decide where your next staffing dollar actually does the most good.