High cost of H-IB visas changes hiring calculus at American startups

Ezra Gershanok, chief executive and co-founder of subleasing-market-place Ohana, said he doesn't expect to sponsor more H-1B visas now that the petition fee jumped to $100,000 under President Trump's new rules.

- Yuliya Chernova

An H-1B visa will carry a fee for new applicants beginning next year. Some firms think it could give them an edge in hiring.

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He will hire contractors abroad instead.

"If the intended purpose is to have more domestic hiring, that is not going to be the case for us," Gershanok said.

Founders of venture-backed U.S. startups are rethinking hiring plans following the imposition of the whopping new fee on H-IB visa petitions. Some founders expect to bring on foreign workers remotely or to rely more on international offices. Among well-funded companies, some aren’t ruling out paying the high fee in rare cases.

Venture investors worry that immigration roadblocks will deter foreigners from starting companies in the U.S. and otherwise push global talent overseas. Easing skilled immigration has long been a big part of the venture market's agenda.

Ohana, which has raised $6 million in venture funding, now employs 11 people. Six are based in New York, including a new hire in a business development role who is a U.K. citizen and won the H-IB lottery earlier this year, Gershanok said.

The other five people at Ohana are international contractors working in South Africa and Portugal. Hiring in New York is already too expensive, Gershanok said. "I wish I could hire in the U.S., but I can't at this cost," he said.