A $100,000 H-1B fee, wage-based visa selection, and a shrinking foreign-born workforce are creating a labour squeeze that hits SMBs hardest.
If you run a small business that depends on skilled workers, whether in accounting, engineering, healthcare, IT, or construction, the labour market just got harder and more expensive. A set of immigration policy changes enacted over the past year is reducing the available talent pool, increasing the cost of hiring foreign-born professionals, and reshaping workforce planning in ways that most SMB owners have not yet accounted for in their budgets.
The changes are not theoretical. They are already affecting hiring timelines, compensation strategies, and the ability of smaller employers to compete for talent against larger firms with deeper pockets. Understanding what shifted, and what you can do in response, is now a financial planning priority, not just an HR concern.
What Changed
The most significant policy shift is the $100,000 fee on new H-1B visa petitions, signed by executive order on September 19, 2025. The fee applies to employers sponsoring H-1B workers who are currently outside the United States. It does not apply to change-of-status or extension petitions for workers already in the country, according to USCIS clarifications issued in October 2025.
The fee functions, as one immigration law firm described it, as a tariff on the importation of labour. For a startup hiring an engineer or a healthcare system recruiting a specialist, it adds $100,000 on top of existing visa fees ($1,700 to $4,500) and annual salary commitments, before the employee has started work.
The second major change: the H-1B lottery now uses a wage-based selection system rather than random selection. Workers offered higher salaries receive better odds. USCIS modelling suggests that candidates at the highest wage level may have roughly a 60% selection probability, while those at the lowest level may fall to approximately 15%.
The combined effect is a system that structurally favours large, well-capitalised employers. A Fortune 500 company can absorb a $100,000 fee and offer top-tier wages. A $10M professional services firm or a regional healthcare provider typically cannot.
The Broader Labour Market Impact
The policy changes arrive alongside a broader contraction in the foreign-born workforce.
The Bureau of Labor Statistics reports a decline of 1.1 million foreign-born workers since January 2025. The National Foundation for American Policy estimates that current immigration policies could reduce the U.S. workforce by 6.8 million by 2028, a figure that NFAP projects could lower annual economic growth by nearly one-third.
Neil Bradley, executive vice president and chief policy officer at the U.S. Chamber of Commerce, noted in a February 2026 briefing that net migration reductions are already affecting local economies: “There are a lot of communities where immigrant populations made up a significant portion of the consumer base, and suddenly you’re seeing that shift away. That has real consequences for those local economies.”
For SMBs in construction, home services, manufacturing, and hospitality, industries where immigrant workers fill critical roles at every skill level, the labour supply contraction is compounding existing hiring challenges from the accounting talent shortage and post-pandemic workforce shifts.The Richmond Federal Reserve published an analysis finding no evidence that H-1B workers displace native college-educated workers. Instead, the research found that small, high-productivity firms that hire H-1B talent grow faster and hire more domestic graduates. The implication: restricting access to foreign talent does not free up workers for small businesses. It pushes production offshore.
What This Means for Your Financial Planning
The immigration shifts create three specific financial planning considerations for SMBs.
First, payroll and compensation budgets need to reflect a tighter labour market driven by constrained supply, not strong demand. Even if your business does not sponsor H-1B workers directly, you are competing for talent in a market with fewer available workers. Wage pressure is rising across skill levels, and compensation strategies that worked 18 months ago may no longer attract or retain the people you need.
Second, headcount planning requires longer time horizons. Hiring timelines are extending across industries, and the availability of specialised talent, particularly in accounting, finance, healthcare, and technology, is declining. Rolling workforce forecasts that model multiple hiring scenarios (delayed fills, higher compensation, outsourced functions) provide more realistic planning foundations than static annual headcounts.
Third, the cost-benefit analysis of outsourcing versus hiring has shifted. For functions where qualified domestic candidates are scarce and visa-based hiring is now prohibitively expensive, outsourced and fractional staffing models, whether for accounting, finance, or operational roles, may deliver comparable expertise at a fraction of the cost and timeline of a traditional hire.
What to Watch
Several lawsuits challenging the $100,000 fee are working through the courts. The U.S. Chamber of Commerce and the Association of American Universities argue the fee exceeds the president’s authority. Initial rulings were expected before the March 2026 H-1B lottery.
The wage-based lottery system, if sustained, will permanently reshape which workers can access H-1B status, and which employers can afford to sponsor them. For SMBs, this means the H-1B programme as traditionally used is no longer a viable talent pathway for most positions.
The Section 122 tariffs expiring in July, the Fed’s rate hold, and the immigration restrictions are all converging to create a planning environment where multiple cost variables are in motion simultaneously. Business owners who model these variables together, rather than treating each as an isolated issue, will make stronger hiring, compensation, and capital allocation decisions through the rest of 2026.
Frak Finance provides fractional CFO, accounting, and financial advisory services to SMBs between $1M and $50M in revenue, including headcount planning, payroll cost analysis, and financial forecasting through volatile labour and regulatory environments. Schedule a complimentary consultation or call (773) 658-9688.
