After the $100,000 H-1B Fee: Why US Firms Are Building Teams in India

As of 3 October 2026. USCIS states it is complying with the court order while the government considers next steps, so the payment requirement is paused but the legal question is not settled.

This article is for US founders, CTOs and engineering managers who rely on, or planned to rely on, H-1B hiring and now want a staffing plan that holds up whichever way the courts and agencies go. It summarises what changed in neutral terms, then explains how an offshore team in India works in practice: structure, time zones, contracts, IP and cost planning. This is not legal or immigration advice; speak to an immigration attorney about specific petitions.

What is the $100,000 H-1B fee?

The $100,000 H-1B fee is a payment required by a presidential proclamation signed on 19 September 2025 for certain new H-1B petitions filed from 21 September 2025, mainly for workers outside the United States without a valid H-1B visa.

According to USCIS, the proclamation took effect at 12:01 a.m. Eastern on 21 September 2025. It applied to new petitions for beneficiaries outside the US who did not hold a valid H-1B visa, rather than to existing visa holders or most extensions inside the country. The proclamation also directed further rulemaking on prevailing wages and on how lottery selections are made.

For the current official position, read the USCIS H-1B FAQ, which USCIS updates as the litigation moves.

Is the H-1B fee still in effect in 2026?

Not at present: a Massachusetts federal court vacated the guidance implementing the payment on 8 June 2026, the First Circuit denied a stay on 24 July, and USCIS says it is complying.

Date	Event
19 September 2025	Proclamation signed
21 September 2025	Payment requirement takes effect for covered new petitions
23 December 2025	DHS announces a weighted selection process for the H-1B lottery, favouring higher wage levels
27 February 2026	Weighted selection takes effect for the FY 2027 cap registration season
8 June 2026	District court in Massachusetts vacates the guidance implementing the payment
24 July 2026	First Circuit denies the government's motion for a stay pending appeal

The important planning point is the word pending. The appeal has not been decided, and DHS has said it still plans to collect the payment if the order is later lifted. A hiring plan that only works if the fee stays paused carries risk; so does a plan that only works if it returns.

Why US companies are looking at offshore teams in India

US companies look at India because it already supplies a large share of the skilled technology workforce that H-1B hiring draws on, and an offshore team lets them reach that talent without visa timing, lottery odds or relocation.

USCIS data for fiscal year 2024 show that people born in India accounted for roughly 70 percent of approved H-1B petitions. Many of the engineers a US company might have sponsored are equally available to work from Bengaluru, Pune, Ahmedabad or Rajkot for a company that sets up the right structure.

• Predictable start dates: a team can start in weeks instead of waiting for a lottery and petition cycle.
• Fewer single points of failure: a project does not stall if one visa is delayed.
• Cost planning: no sponsorship and relocation costs, and team cost that scales by month.
• Follow-the-sun work: Indian evening hours overlap with the US morning, so handovers can run overnight.

Offshore teams do not replace every on-site role. Customer-facing, security-cleared and leadership roles often still need to be in the US.

Offshore team models compared

The three common models are a fixed-scope project with a vendor, a dedicated team working only on your product under your direction, and your own legal entity in India.

Model	Best for	Who manages day to day	Time to start	Commitment
Fixed-scope project	A defined product or feature with clear requirements	Vendor project manager	2-4 weeks	Per project
Dedicated team	Ongoing product work, replacing planned hires	Your product owner, vendor handles HR and admin	2-6 weeks	Monthly, usually with notice periods
Own entity or offshore development center	20+ engineers, long-term	Your own managers in India	4-9 months	Years

Most companies start with a fixed-scope project or a small dedicated team and only consider their own entity once the team passes about 20 people and the working model is proven.

For a step-by-step view of the first two, read how to outsource software development to India from the USA.

How to handle time zones between the US and India

India Standard Time is 9.5 to 12.5 hours ahead of the continental US depending on the zone and season, so successful teams agree a short daily overlap window and run most coordination in writing.

For US Eastern, an Indian team working 9 AM to 7 PM IST overlaps for roughly an hour or two of your morning; many teams shift part of the day later to widen it. For US Pacific, live overlap is small, and a written end-of-day update answered before the team's next morning carries most of the work. Our guide on working with an Indian development team across time zones has the exact tables and a template update.

Contracts, IP and compliance for a US company

Protect the company with a contract that assigns all intellectual property to you on creation, a confidentiality clause binding every team member, clear data handling rules, and a governing law and dispute clause your counsel is comfortable with.

1. IP assignment: work product, code and documentation assigned to your company, with the vendor obliged to obtain assignments from its staff.
2. Repository ownership: code lives in your organisation's repositories from day one.
3. Access control: named accounts, least privilege, and removal on exit.
4. Data protection: production data access only where needed; use anonymised data in development.
5. Exit clause: handover of code, credentials and documentation within a set number of days.

Have your own counsel review the agreement. Nothing here is legal advice.

The first 30 days with an offshore team

The first month decides whether an offshore team works, so spend it on access, documentation, a shared definition of done and one small but real deliverable, rather than on a large feature with unclear requirements.

1. Week 1: accounts, repository access, development environment, architecture walkthrough recorded on video.
2. Week 2: the team fixes a handful of real bugs and writes down every question; you answer them in a shared document.
3. Week 3: one small feature from ticket to production, through your normal review and release process.
4. Week 4: retrospective, agreed working hours, escalation rules and a backlog for the next two sprints.

Measure the team on the same things you would measure an in-house hire: lead time from ticket to release, defects found after release, and how often work has to be redone because a requirement was unclear. If those numbers are moving the right way by the end of the second month, the model is working.

What we see from US clients working with our team

US clients who work with JK Tech Hub from Rajkot, India, tend to succeed when they treat the offshore team as part of their engineering organisation, with one accountable product owner, rather than as a ticket queue.

Anonymised examples from recent engagements:

• A US logistics startup had two engineering roles planned through sponsorship. When timing became uncertain, it started a three-person dedicated team with us for the backend and kept one senior US hire as tech lead.
• A US healthcare software company used us for a fixed-scope reporting module first, then converted to a dedicated team after the module shipped on time.
• A Texas-based retailer moved its e-commerce maintenance offshore and kept product decisions in-house, with a 45-minute daily overlap at 8:30 AM Central.

In each case the first month was spent on access, documentation and a shared definition of done. That investment paid back within the first two sprints.

How to decide: H-1B hiring, offshore team or both

Most companies do best with a mix: sponsor visas for the few roles that must be on site and place remote-capable roles in an offshore team, so the roadmap survives any legal outcome.

Role type	Suggested route
Engineering leadership, architecture owner	US hire, on site or remote in the US
Product feature development, QA, DevOps	Dedicated offshore team
Clearly scoped new module or app	Fixed-scope offshore project
Roles requiring on-site customer work	US hire, visa route if needed with legal advice

For cost comparisons in dollars, see developer rates in the US, UK and Australia versus India.

Related reading and next step

These pages explain how US companies structure, manage and price work with an Indian development team, and how we work with clients in the United States from our office in Rajkot:

• Software development for US companies
• Hire dedicated developers in India
• Outsource software development to India from the USA
• Working across time zones with an Indian team

For a fixed quote on a project or a dedicated team, reach us through the contact page or WhatsApp.