BI/Momo Takahashi
- Wall Street is bracing for the impact of President Trump's H-1B application fee.The $100,000 price tag could upend hiring for technologists and junior bankers.Experts broke down which finance jobs are most at risk and why.
President Donald Trump's new H-1B visa policy may hit Big Tech the hardest, but Wall Street is well within the blast zone.
Big banks like JPMorgan, Goldman Sachs, and Citi have long used these work visas to hire a range of highly skilled overseas workers, from junior bankers to technologists and even risk managers and traders.
Trump's late Friday executive order, which raised the application fee to $100,000 each, is expected to upend this hiring process in a way that could make it a lot harder for international students to get a leg up in finance — and potentially lead more financial firms to outsource their technology needs, experts said.
"If the $100,000 fee is indeed implemented, I would expect demand for H-1Bs would shrink to just the most highly compensated, hardest-to-fill roles," said Ted Chiappari, head of Duane Morris' immigration law group.
Chiappari pointed to junior-level bankers, like analysts, who he said are common recipients of financial industry H-1B visas. Computer-related jobs are also a big source of the finance industry's H-1B hiring, making up about two-thirds of applications last year, according to a recent report from JPMorgan. The firm predicted the policy change could result in 5,500 fewer work authorizations being granted every month.
"If I were a hiring manager and the choice was between candidate A and candidate B, and let's say I liked candidate A a little bit better but he had a $100,000 price tag on him — I'd have to like him a lot better," said Meridith Dennes, founder of Prospect Rock Partners, a Wall Street recruiting firm.
A career-altering fee
For young people, the new visa fee could alter their entire career path. Breaking into finance — whether in hedge funds or investment banking — is a complex process that often begins in college, if not earlier.
If the new H-1B fee prompts some banks to avoid hiring international students to fill their entry-level ranks, US universities may see fewer students from other countries pursuing this track or attending at all.
"I think it's going to make it that much less attractive to come to the United States," Chiappari said.
Junior bankers earning roughly $185,000 or so, including bonuses, might not justify the $100,000 visa sponsorship expense.
"The question everyone is considering is, what's the cut-off point? A million-dollar VP?" said an associate at a large private equity firm.
This person said that an associate earning under $400,000 might not warrant the added expense, but higher-level employees with bigger salaries and revenue-generating potential could.
Dennes said she would be "really freaked out" if she were an international student.
"One of the reasons why you study in the United States is to secure a job in the United States," she said, adding, "Now nobody wants to hire you because you have a $100,000 price tag on your head."
'Offshore and outsource'
The visa application fee is expected to drive more hiring of American tech talent— but only to a point, Dennes said. Many US financial firms like Goldman Sachs have established software and tech hubs in countries like India, which could see more hiring to make up for workers who would have previously come to the US on H-1 B visas.
"If it gets too hard to do business in the US," Chiappari said, "they'll just offshore and outsource."
Not all tech jobs will be so easily expendable. Some tech jobs can be expensive and hard to fill, which has led some financial firms to offer generous pay packages to compete with tech firms and the rest of the economy.
The industry's higher salaries could play to its advantage in the H-1B lottery, said Bo Cooper, a partner at immigration-focused law firm Fragomen, who noted that certain industries, companies, or roles could be exempted from the $100,000 fee at the president's discretion.
On Tuesday, the administration proposed a change to the H-1B lottery that "would give boosted chances in the lottery to those H-1B candidates who would receive the highest wages," Cooper said.
While the real impact for Wall Street may not be entirely visible until bonus season rolls around, in some cases, it's already happening. An executive at a small multistrategy hedge fund told Business Insider that his firm has decided against hiring a portfolio manager from a foreign country because of the fee.
The executive said firms with deep pockets are more likely to eat the added cost of the fee, saying, "This is a rounding error in their recruiting expenses."
