U.S.-based small businesses and startups continue to face major uncertainty as a result of the Trump administration’s broad changes to the H-1B visa program. These changes have complicated workforce planning for companies who are now in search of H-1B visa alternatives to meet their specialized hiring needs, particularly in the technology sector.
The U.S. tightened its rules around bringing talent into the United States through its H-1B visa program in September 2025, pricing many SMBs out of using the popular hiring and immigration track with a $100,000 fee on new petitions outside the U.S., the legality of which is still being contested in U.S. federal courts.
Small businesses and SMBs now say they’re pivoting hiring decisions to focus on domestic and global hiring through EORs.
H-1B visas: The major changes affecting SMBs
The major H-1B changes most affecting SMBs and smaller companies include a $100,000 payment requirement, a weighted wage-based selection system, and proposed higher wage benchmarks.
While the changes will likely continue to slow down H-1B hiring for large organizations like Amazon, Google, and Meta, smaller companies will bear the brunt of the now prohibitively expensive hiring costs when it comes to bringing in non-U.S. citizen talent into the country.
Experts have warned that the downstream impact of the new restrictions will be felt most acutely by smaller organizations. Neil Bradley, EVP and Chief Policy Officer at the U.S. Chamber, has said “The new $100,000 visa fee will make it cost-prohibitive for U.S. employers, especially start-ups and small and midsize businesses.”
The program, which began in 1990, has traditionally helped U.S. employers fill specialized roles in technology, engineering, and healthcare, with computer-related occupations accounting for roughly 64% of approvals. Now, the costs are much higher with even large organizations saying they intend to be more selective in their H-1B sponsorship decisions. As of February 2026, just 70 employers in the U.S. had paid the fee.
On the SMB side, companies are responding to the upheaval by changing their approach in real-time.
Startups respond to H-1B visa changes by changing strategy
Imagine that a cybersecurity startup needs a machine learning engineer with specific fraud detection experience. After a long search, they find their specialist hire, a 27-year old engineer based in Bengaluru, India.
Before the H-1B visa changes, the company would have registered them for the annual H-1B visa lottery, filed the petition, paid the government and legal fees, and demonstrated that the job qualified as a speciality occupation.
For smaller companies, H-1B offered a way to bring specialized talent into the U.S. Now, however, it’s unlikely this engineer would be able to clear the new requirements without significant upfront financial investment from the employer.
AI startup, Vectara, founder Amr Awadallah told TechCrunch that he believes the new fee is too high for many startups. Meanwhile, Otter CEO Sam Liang believes that companies may find workarounds telling Reuters that businesses may instead “hire maybe in India or other countries just to walk around this H-1B problem.”
This is increasingly an option companies are weighing. Hiring directly within the countries where companies are recruiting specialist talent means businesses can avoid the H-1B visa process entirely and work with the talent they need. And there’s strong evidence startups are doing just that.
In our Global Talent Squeeze report, we found that 76% of U.S. small businesses we surveyed said H-1B restrictions are directly affecting workforce planning, forcing a pivot to remote-first hiring.
Not only that, an overwhelming majority of those we surveyed now say that tightening immigration laws have made global hiring an operational necessity.
H-1B alternative: Using an EOR to pivot amid new restrictions
An EOR as an H-1B alternative is an attractive option for employers uncertain about the future of the H-1B program. Shashi Bellamkonda, principal research director at Info-Tech Research Group told TechTarget that companies that “built their entire specialized talent pipeline on a single visa category got burned in September.”
Tighter, more expensive H-1B processes in the U.S. don’t remove the need for specialized talent. The AI boom and shortages in healthcare and applied sciences mean that companies are still looking beyond U.S. shores for the highly specialized skills they need.
Companies may choose to hire domestically and pay a financial and search time premium for the right engineer. Or they can hire that same talent internationally, keeping them in their home market but sidestepping significant delays and costs.
Aside from gaining access to a larger talent pool, working with an EOR simplifies the hiring process significantly. Companies that faced filing costs and delays, the potential for refusal, and now a hefty upfront cost, can instead work with an EOR partner.
In the case of our Bengaluru-based machine learning engineer, there is no $100,000 fee and wage test associated with the hire. They can be recruited, remain in their home country, and avoid the lengthy processes that delay onboarding and commencement of work.
But for those who have never worked with an EOR, it can be hard to know what to expect.
The ultimate trust exercise
For starters, companies need to be compliant everywhere they hire. This can seem daunting when “everywhere you hire” involves hiring in three or four countries you’ve never operated in.
Before working with an EOR, founders and companies often believe that hiring in another country when headquartered in the U.S. is risky. Many are unsure what to expect when it comes to compliance, fees, taxes, and contracts.
And, while the H-1B process has long been time intensive and complex in its own way, it was a process that was largely understood and relied upon. Now, with the future of the program uncertain, employers are exploring EORs like Multiplier to move forward.
EOR usage among Multiplier’s U.S.-headquartered customers has grown 16.4% since April 2024, with companies exploring new or less familiar territory to secure critical hires.
Most often, founders and startups are lean or moving quickly and need support:
- Classifying workers correctly
- Creating locally compliant employment contracts
- Managing payroll, taxes, and statutory contributions
- Providing locally required benefits
- Staying compliant as employment rules change
For an internal HR lead or an HRBP, this set of requirements is a broad, specialist scope that stretches them beyond their typical areas of expertise. With a partner like Multiplier, a startup with ambitious goals can move forward without needing to become experts in employment law and compliance.
How Multiplier helps companies stay competitive as the H-1B pathway narrows
New H-1B visa costs and wage requirements have already had an outsized impact on SMBs and startups. It is now more costly than it has ever been to bring talent into the U.S. for work. And experts are warning that relying on one pathway is now its own risk.
These growing companies need to be able to move forward and remain competitive without the significant upfront costs and uncertainty now associated with the H-1B visa pathway.
Multiplier helps companies stay ahead.
As domestic policy evolves in the U.S., Multiplier is expanding the possibility for how companies can hire fast, compliantly, and in days not months. An EOR doesn’t provide another pathway to bring in non-U.S. citizen talent. However, it does give companies the support and infrastructure needed to hire from a global talent pool without compliance, payroll, or tax anxiety.
Read more in the Talent Squeeze to learn how companies are gaining a competitive advantage in fast-changing environments.
FAQs
What are the main alternatives to H-1B visas for hiring international talent?
The most common alternative growing companies are turning to is hiring directly in the talent's home country through an Employer of Record (EOR). Rather than bringing a specialist into the U.S. on a visa, the company hires them locally through the EOR, which handles compliant employment, payroll, taxes, and benefits in that country. This avoids the H-1B lottery, petition process, and new fee structure entirely.
Why has H-1B sponsorship become more expensive for small businesses?
In September 2025, the U.S. introduced a $100,000 fee on new H-1B petitions filed from outside the U.S. The legality of this fee is still being contested in federal courts. Combined with a new weighted wage based selection system and proposed higher wage benchmarks, this has made H-1B sponsorship "cost prohibitive" for many small and midsize businesses, according to Neil Bradley, EVP and Chief Policy Officer at the U.S. Chamber.
Are small businesses actually affected more than large companies by the H-1B changes?
Yes. While large employers like Amazon, Google, and Meta will also slow H-1B hiring, smaller companies bear the brunt of the new costs since they have far less capacity to absorb a $100,000 per hire fee. As of February 2026, only 70 employers in the U.S. had paid the new fee, an early signal of how prohibitive the cost has been industry wide.
Is it legal to hire international talent without sponsoring an H-1B visa?
Yes. Hiring talent directly in their home country through an EOR is a compliant alternative when the employee remains outside the U.S. Instead, the EOR acts as the legal employer of record in that country, managing local labor law, contracts, payroll, tax withholding, and statutory benefits, so the hiring company does not need in house expertise in that country's employment law.
How much faster is hiring through an EOR compared to the H-1B process?
EORs let companies "hire fast, compliantly, and in days not months," in contrast to the H-1B process, which involves lottery registration, petition filing, government and legal fees, and proving that the role qualifies as a specialty occupation. This process can take months even before the new $100,000 fee and wage requirements were added.
Are companies actually shifting away from H-1B visas because of these changes?
Yes. Multiplier's data shows that EOR usage among its U.S. headquartered customers has grown 16.4% since April 2024. Separately, 76% of U.S. small businesses surveyed in Multiplier's Global Talent Squeeze report said H-1B restrictions are directly affecting workforce planning, with many pivoting to remote first, global hiring instead.
