On September 19, 2025, the White House issued an Executive Order entitled “Restriction on Entry of Nonimmigrant Workers” (here), which placed new restrictions, costs, and conditions on H-1B visas. In the following guest post, Sarah Abrams, Head of Claims Baleen Specialty, a division of Bowhead Specialty, takes a look at the new H-1B visa provisions and considers the potential implications for D&O risk exposure. I would like to thank Sarah for allowing me to publish her article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to the site’s readers. Please contact me directly if you would like to submit a guest post. Here is Sarah’s article.
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Will recently announced H1-B visa restrictions impact company D&O exposure? Given that 50 to 60 thousand U.S. employers may be “in scope” of President Trump’s September 19, 2025, proclamation (H-1B Proclamation), which conditions visa issuance for new H-1B petitions on a $100,000 payment, there is potential for an immediate and significant impact on affected companies’ D&O risk. Of note, the President called out information technology (IT) companies in the H-1B Proclamation as having “prominently manipulated the H-1B system.”
D&O Diary readers may recall a securities class action filed in July that provided an example of how global mobility can impact D&O exposure. The lawsuit, filed against Flywire, alleged that the payments-enablement platform, which facilitates payments between clients and payees, and has a large industry focus on education, failed to disclose the negative impact visa-related restrictions were having on its business. Flywire cited student visa restrictions as a significant headwind with anticipated continued restrictions, causing its stock price to drop.
Considering the Flywire SCA and the recent H-1B Proclamation, there is potential for abrupt financial reforecasting, shifts in the corporate workforce, and required updates to compliance guidance. Whether this will lead to an increase in D&O exposure remains to be seen; however, to appreciate the breadth of potential impact, I will review the H-1B Proclamation in more detail, as well as the history of H-1 B visas and follow-on emerging executive and board liability.
Within days of President Trump’s “Restriction on Entry of Certain Nonimmigrant Workers,” the White House issued a FAQ clarifying that the H-1B Proclamation “[r]equires a $100,000 payment to accompany any new H-1B visa petitions submitted after 12:01 a.m. eastern daylight time on September 21, 2025. This includes the 2026 lottery, and any other H-1B petitions submitted after 12:01 a.m. eastern daylight time on September 21, 2025.” The H-1B Proclamation was further clarified as not applying to renewals or extensions of existing H-1B status.
The H-1B proclamation further authorized the Department of Homeland Security (DHS) and the Department of State (DOS) to coordinate all necessary and appropriate action to implement the proclamation, including denying entry to an H-1B visa recipient who has not paid the $100,000 fee. The DHS has issued a proposed amendment whereby DHS would weigh registrations for the skilled worker visas based on the equivalent wage level that an employer offers to pay a visa recipient. The rule outlines a four-tier scale into which DHS would sort registrations. Higher-paying talent offers would be placed at the higher end of the scale and receive a greater number of entries into the agency’s “lottery” than those at the lower end.
As previously noted, the H-1B Proclamation specifically called out the IT industry, stating that “[t]he abuse of the H-1B visa program has made it even more challenging for college graduates trying to find IT jobs, allowing employers to hire foreign workers at a significant discount to American workers.”
However, if it is the case that foreign IT workers are highly paid and DHS specifically notes that it “aims to implement the numerical cap in a way that incentivizes employers to offer higher wages, or to petition for positions requiring higher skills and higher-skilled aliens, that are commensurate with higher wage levels,” salaries at IT companies may see a sudden increase. Thus, depending on the position and the number of individuals who require H-1B visas, there may be an expense recalibration that could have a significant impact on a company’s balance sheet.
According to a recent Times of India publication, technology companies with the highest H-1B visa approvals in the first half of 2025 include between 1,000 and 10,000 H-1B sponsored employees. While the H-1B Proclamation was further clarified as not applying to renewals or extensions of existing H-1B status, given the number of employees and companies this directive may impact, the direct and indirect financial impact of the H-1 B Proclamation may affect a company’s D&O risk profile. Before I discuss the potential D&O impact further, it may be helpful to understand what H-1B visas are and why they exist.
Created in 1990, the H-1B visa program allows businesses to employ foreign workers in specialty occupations (technology, engineering, or medical research) for three to six years. Employers are directed to first make efforts to recruit American workers and must pay H-1B recipients the same wages they would pay to Americans in the same roles. At this time, the H-1B program offers 65,000 visas annually and another 20,000 visas for workers with advanced degrees.
Notably, in Trump v. Hawaii, the U.S. Supreme Court upheld the travel restrictions imposed during President Trump’s first term, emphasizing that under §212(f) of the Immigration and Nationality Act, the President possesses broad discretion to suspend the entry of non-citizens whenever such entry is deemed detrimental to the interests of the United States.” The H-1B Proclamation indicates that the existing framework of the H-1B visa program is harming American workers and, by extension, the United States. Even so, the risk created by the proclamation may increase D&O liability for United States-based companies, their executives, and boards.
Discussion
Importantly, at this point, the H-1B Proclamation introduces an emergent set of D&O risk exposures that vary by sector. For public companies that may have a workforce or IT vendors affected by the proclamation, the likely immediate issue is disclosure: if hiring pipelines or project delivery rely heavily on H-1B workers, the per-hire fee could prove material to margins, cost structures, or growth trajectories. Thus, supplemental filings indicating impact by the H-1B proclamation may be warranted to mitigate a future Flywire-type SCA.
Thus, financial forecasting may become more precarious for company executives. As previously indicated, the DHS proposal to shift the H-1B selection process from a pure lottery to one that highly weights salary is a significant lever. Meaning employers offering higher salaries might see a statistical advantage in selections. This may encourage companies to increase the wages of foreign workers to increase the chances of H-1B visa selection. A budget set for talent salaries or even IT services by a third-party vendor reliant on H-1B visas may need to be recalibrated to account for the $100,000 fee and increased wages, which increase chances for H-1B visa approval.
If the impact of the fee on workforce planning or technology services was not adequately disclosed or accounted for, there may be shareholder inquiries surrounding corporate leadership and board oversight. As D&O Diary readers are aware, supply-chain dependencies can heighten D&O exposure. H-1B labor costs may be passed through, or vendors may fail to meet obligations due to talent shortage, creating contractual disputes and disclosure gaps, creating another potential executive risk if review and supplemental disclosures are not made.
Because the H-1B Proclamation is new, with amendments from the DHS coming out, D&O underwriters may want to consider how companies are tracking mandates and evaluating whether supplemental disclosures should be filed.
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