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H-1B Fee Hike and PERM Pause: How Indian Software Companies Must Rethink US Hiring Through 2027
The H-1B fee increase impact on hiring comes down to cost and predictability. A proposed $103,265 fee on every cap-subject petition, plus a PERM pause for certain companies, makes sending Indian staff to the US dearer and less certain. Indian software companies should plan to hire more locally in the US and in nearby talent markets, and to pay recruiters only on a hire.
| Item | Status (as of 29 October 2026) | What it means for Indian TA teams |
|---|---|---|
| $103,265 fee per cap-subject H-1B petition | Proposed rule, published in the Federal Register on 25 August 2026; not final | Model it as an added cost per relocation hire, on top of regular filing fees |
| Earlier $100,000 fee (September 2025) | Blocked by US courts; a new route has been proposed instead | Expect litigation on any final rule |
| PERM pause | Announced 8 October 2026 for certain companies; existing H-1B visas not cancelled | Green-card promises to affected staff are now uncertain |
| Indian share of H-1B approvals | About 71% of FY 2024 approvals | Indian-HQ firms are the main group exposed |
| CBREX time-to-hire, India-based roles | 15 to 45 days (CBREX typical range) | Offshore and GCC delivery fills seats faster than relocation |
| CBREX last pharma placement in the USA | 17 days from opening to hire | Local US hiring through specialists can be quick |
Two separate US actions matter. DHS proposed a $103,265 fee on all H-1B cap-subject petitions in August 2026, and on 8 October 2026 the US government paused PERM labour certification for certain companies. The fee is still a proposed rule. The PERM pause is an enforcement action against named employers.
The Federal Register notice of proposed rulemaking would set a $103,265 fee, payable at filing, for all H-1B cap-subject petitions, including those eligible for the advanced degree exemption. It would sit on top of existing fees. USCIS released the proposal on 24 August 2026, and the comment period was scheduled to close on 24 September 2026.
It is also distinct from the earlier $100,000 charge. Brown University's international office notes that the new fee is separate from that September 2025 measure. The 2025 fee was announced as a one-time payment rather than an annual renewal, and a Jindal Global University paper says USCIS clarified it applied to petitions filed after 21 September 2025.
Courts have already pushed back once. The Indian Express reports the 2025 fee was subsequently blocked by US courts, and the administration then proposed a new one. A Congressional Research Service note tracks the wider set of H-1B policy changes from that period.
PERM is the labour certification step that employers must clear before filing most employment-based green-card petitions. On 8 October 2026 the Labor Secretary said the department would not accept new PERM applications, or process pending ones, involving certain named companies. The Hindu reports the move raises talent-retention concerns for Indian IT majors.
Read it precisely. The action does not suspend the H-1B programme or revoke existing H-1B visas. The Hindu also says it does not, by itself, invalidate existing H-1B visas. What it does is freeze the next rung for affected employees: the green card.
Several points remain unsettled, and we will not guess at them:
Indian software companies feel it most because they file the most H-1B petitions. A large fee raises the cost of every relocation hire, lengthens planning cycles, and weakens the retention promise of a US green card. The result is higher cost per hire and slower, less certain US staffing.
Start with exposure. The Financial Express reports that more than 70% of H-1B visa applicants are Indian nationals, and that a higher fee may force Indian IT services firms to rethink moving India-trained staff to the US for two or three year assignments. USCIS data for FY 2024 puts India-born workers at 71% of approved petitions, out of 399,395 approvals.
Exposure also depends on cap status. Business Standard reports that cap-exempt petitions would not be covered, including many filed by institutions of higher education, affiliated nonprofits, nonprofit research organisations and government bodies.
Indian software services firms are mostly commercial employers, so most of their new filings should be cap-subject. We hold no published figure for the cap-subject share of Indian firms' filings, so ask counsel to split your own filings by category before you size the exposure.
Suppose a mid-sized Indian software firm plans 20 cap-subject H-1B filings for a year. At the proposed fee, that is 20 x $103,265 = $2,065,300 in fee alone. Legal costs, regular filing fees, relocation and the empty-seat time all come after that. This is an illustration, not a forecast of any one company's bill.
Know what the fee covers. The proposal applies to all cap-subject petitions, including those eligible for the advanced degree exemption. Petitions that are not cap-subject are outside its wording, so check each role's category with counsel. Now compare the alternative. A US-local hire through a specialist recruiter carries an agency fee but no petition fee and no relocation. Run both columns for each role before you commit to relocation.
Cost is only half the story. Relocation hiring adds lottery risk, filing time and consular steps. The PERM pause adds a retention risk: staff who joined expecting a green-card path may leave. BusinessLine describes the suspension as another layer of uncertainty for Indian IT services firms already dealing with tighter immigration rules and the rising cost of deploying talent onshore.
The shift was under way before this year. Nasscom said H-1B use at Indian tech companies in the US has fallen significantly over the past five years as companies expanded local hiring. We could not source the RBI survey on falling on-site revenues that earlier drafts cited, so we have dropped it.
Hiring is moving away from relocation and toward location. Indian-HQ firms are hiring more people locally in the US, adding Canada, Mexico, Poland and Gulf teams, and growing Indian GCC and offshore delivery. Niche skills are sourced where the talent already lives instead of being moved.
A local US hire needs no petition and starts sooner. On CBREX, our last anonymised pharma placement in the USA took 17 days from opening to hire. That is one search in one sector, not a promise for every role, but it shows what a specialist agency network can do when the candidate can already work in the country. 104 US-based recruiting firms are active on CBREX each month.
We have no published CBREX fee range or time-to-hire for US software engineering searches, so we do not quote one. Ask each agency for its fee and its expected time to fill for the specific role.
Canada gives time-zone overlap, Mexico gives US-hours coverage, and Poland gives engineering depth in a European time zone. Our country handbooks cover the local rules: see hiring in Canada, hiring in Mexico and hiring in Poland.
On Mexico, 32 recruiting firms are engaged on CBREX on a monthly basis, and our first Mexico placement, in 2019, was a digital account manager. The Gulf is the other region to price in. Compare the UAE, Saudi Arabia and Qatar as delivery hubs before you assume any of them replaces a US seat.
The simplest way to avoid a US visa fee is to keep the work in India. Our last India GCC or niche search, for AI, semiconductor, hardware and software engineers, took 24 days from opening to hire. India-based roles on CBREX typically take 15 to 45 days.
The most common mistake we see from India-based GCC heads is in the first hiring brief. They want very high-quality talent but do not benchmark against market salaries, so they do not pay at that level. Fix the salary band first, or the search stalls.
AI and LLM engineers are the clearest case. CBREX has filled 445 AI or LLM engineer searches, which tells us the talent sits in many countries and is reachable through specialist firms. Relocating one scarce engineer through a fee-heavy visa route makes little sense when a local specialist can find an equivalent person.
Re-plan in five steps: re-cost every US role with and without the possible fee, rebuild the pipeline by country, audit your agency pool, move to pay-on-hire terms, and fix your salary benchmarks. Do this now, because every step is useful whether the fee is finalised or dropped.
Build two columns per role: relocate on H-1B, or hire locally. Add the proposed $103,265 as a risk line, regular filing and legal costs, relocation, agency fee and the cost of each vacant day. Pass mark: a relocation hire stays on the plan only if it still wins after the fee line is added. If it does not, move that role to the local column.
Worked example (illustrative inputs only, replace with your own figures): take one software engineer role. We publish no benchmark for regular H-1B filing and legal costs, so get a written quote from your immigration counsel and enter it in the table below.
| Cost line | Relocate on H-1B | Hire locally in the US |
|---|---|---|
| Proposed fee | $103,265 | None |
| Regular filing and legal costs (F) | Counsel's written quote | None |
| Relocation (R) | Quote from your mobility provider | None |
| Agency fee (A) | Your agreed fee | Your agreed fee |
| Vacant-day cost x days to fill | V x days (longer cycle) | V x days (shorter cycle) |
The relocate column starts $103,265 ahead before any other line is filled in. The local column wins unless the other lines favour relocation by more than that.
Break-even formula: relocation still beats local hiring only if the local hire costs more than the relocation route by at least the fee. In symbols: (local salary premium over the relocated hire, over the period you compare) + (V x extra days the local search takes) > $103,265 + F + R + (V x extra days the relocation route takes).
Here is a hypothetical, with invented inputs. Suppose F + R = $30,000, the local search takes 20 more days than relocation would, and V = $500 a day.
Then the right side is $103,265 + $30,000 = $133,265, and the left side needs a salary premium of at least $133,265 - (20 x $500) = $123,265 over the comparison period. Unless the local hire costs that much more, the local hire wins. Replace every input with your own figures.
Group open and forecast roles by where they could sit: US-local, Canada, Mexico, Poland, Gulf, India GCC. Mark each role as "must be in the US" or "could be anywhere". Roles that are tied to a client site stay in the US. Pure engineering roles usually do not need to be.
Count your agency contracts, invoices and active briefs per country. One client of ours consolidated 54 agency contracts into a single CBREX contract, and its time-to-hire before consolidation was 60 to 75 days. Your own audit should ask a simple question: how many vendors fill most of your seats? If a handful do, cut the rest.
Check how duplicates are handled too. On CBREX the duplication check is built into the platform, so when two agencies submit the same candidate for a role, the second agency is told at the point of upload and cannot add the candidate. That removes a common fee dispute.
While rules shift, you cannot forecast US volume. Retainers and seat licences charge you before a hire exists. Pay-on-hire terms charge only when a person joins. Walk-away signal: any vendor that wants a retainer for a market whose visa rules may change within months.
The fee mistake we see most often is calibrating agency fees to how difficult a hire is, when they should be set by the candidate's years of experience. Agency fees per overseas hire also depend on the country of the hire. For European placements, we typically see 15% to 30%.
Also check the replacement guarantee. On CBREX it covers 30 to 90 days per placement, with a free replacement or a refund per eligible claim. A hire who leaves early is a larger loss when each hire cost you more to land.
Our base case for the next 12 to 15 months is a fee that is narrowed or delayed by litigation, a PERM pause that stays in force for named firms, and steady growth in local and nearshore hiring. These are predictions, not facts, and each post in this series will update them.
| Scenario | What happens | Effect on Indian TA teams |
|---|---|---|
| Base | Fee is finalised in a reduced or delayed form, or tied up in court. PERM pause stays for named companies. | Relocation hiring is slower and costlier. Local US, nearshore and GCC hiring keep growing. |
| Upside | Courts block the fee, or DHS withdraws it. PERM restrictions ease for some firms. | H-1B returns as an option for senior and client-site roles. Mixed models still win on cost. |
| Downside | Fee takes effect as proposed and PERM scope widens to more employers. | US relocation hiring becomes the exception. Most US roles go to local hires and offshore teams. |
We expect fewer new relocation hires from India and more local hires in the US. Local salaries are set by the US market, so Indian firms should budget for local pay levels rather than India-plus-allowance. Where roles do not need a US seat, expect more distributed teams spread across India, Canada, Mexico, Poland and the Gulf.
One thing we cannot call yet is how courts will treat a final rule. The earlier fee was blocked, but a new rule may be built differently. Treat the downside case as live until a court says otherwise.
CBREX is one platform and one contract that reaches 4,000+ specialist recruiting firms across 55 countries, with AI matching and payment only when you hire. For Indian companies, it means you can hire locally in the US and elsewhere without retainers or seat licences.
The main reason clients pick a single CBREX contract over a standalone vendor management system is supply. CBREX adds new agencies to the marketplace on demand, so if supply in a country dips, we can bring in specialist suppliers straight away. A standalone VMS does not do that.
Screening is in three levels: agency pre-screen, C Screen AI validation, then stack ranking. C Screen is 98% accurate across more than 10,000 cases, and recent searches saw interview-to-offer ratios of 1:3 to 1:4. In Europe, our fastest shortlist turnaround has been 48 hours, and a Germany search with local candidates took 30 to 45 days with no visa step.
For roles that need an employer on the ground, CBREX has partners that can run EOR in over 90 countries. If you are a US, Canadian or other specialist agency, you can sign up as a recruiting firm or log in as a recruiting firm to receive these mandates.
No. It is a proposed rule published on 25 August 2026, and DHS may revise, withdraw or finalise it after reviewing public comments. Employers should plan for it as a risk, but they should not treat it as a charge that applies today.
No. The pause covers new and pending PERM applications from certain named companies. It does not suspend the H-1B programme or revoke current H-1B visas. Its main effect is on green-card sponsorship for affected employees, which can hurt retention.
Not across the board. Keep H-1B for roles that must sit in the US and cannot be filled locally, and only where the cost still works with the fee line included. Move other roles to local US hiring, nearshore teams or Indian GCC delivery.
The H-1B fee increase impact on hiring will not wait for a final rule. Start by working out what your current approach costs you in agency sprawl: calculate your hidden hiring tax. Then book a demo to see how one contract and pay-on-hire terms would cover your US-local, nearshore and GCC roles. If you prefer to talk it through first, let's talk.
