A U.K. political proposal to penalize employers for hiring foreign workers echoes a U.S. policy battle that reached the courts last week
A proposal by Reform UK to impose a tiered tax on employers who hire foreign workers is drawing attention on both sides of the Atlantic, and for good reason. The political instinct behind the policy is not new to American HR leaders. The Trump administration introduced its own version in September 2025: a $100,000 fee on new H-1B visa petitions, framed explicitly as a tool to make foreign hiring more expensive and domestic hiring more attractive. A federal judge struck it down on June 8, 2026, ruling it an unconstitutional tax.
The ruling provides temporary relief. But the underlying pressure on employers has not gone away.
What Reform U.K. is proposing
Reform UK’s economy spokesman Robert Jenrick announced the party would introduce a two-tier employer payroll tax system if it wins the next U.K. general election. Businesses hiring British workers would receive a partial reversal of the 2024 National Insurance increase introduced by Chancellor Rachel Reeves. Firms hiring foreign workers would remain on the higher rate and would also face an additional “employers’ migrant labour levy.”
The levy would be graduated, with higher charges for lower-paid foreign workers. Jenrick said the rate could reach £3,750 (~US$5,030) per year for a foreign worker on the national living wage, tapering to £500 (~US$670) for those earning £100,000 (~US$134,000) or more. Reform estimates the policy would raise £11.2 billion (~US$15 billion), which would fund the National Insurance cut for British workers.
The policy is built on an explicit premise: that foreign workers, particularly in low-wage roles, undercut domestic workers and should be made more expensive. Whether that premise holds up to economic scrutiny is contested. But the political appeal of the argument, in both the U.K. and the U.S., is not in dispute.
The U.S. parallel: a $100,000 H-1B fee
American employers have already lived through a version of this experiment. In September 2025, President Trump signed Presidential Proclamation 10973, “Restriction on Entry of Certain Nonimmigrant Workers,” which imposed a $100,000 supplemental fee on new H-1B visa petitions. Before the proclamation, employers typically paid between $2,000 and $5,000 per petition, according to the American Immigration Council.
The fee had an immediate chilling effect. Court filings in the subsequent legal challenge showed that as of February 15, 2026, U.S. Citizenship and Immigration Services had received just 85 payments since the policy took effect, a fraction of typical H-1B filing volumes. Technology companies, healthcare systems, and universities scrambled to understand the scope of the rule and whether it applied to existing workers seeking extensions. It did not, the administration later clarified, but the initial uncertainty was itself disruptive.
On June 8, 2026, U.S. District Judge Leo Sorokin blocked the fee, ruling that it functioned as a revenue-raising tax rather than a regulatory fee and therefore required congressional approval the administration did not have. Twenty Democratic state attorneys general had brought the lawsuit, arguing the surcharge damaged hiring in healthcare, education, and technology. HRD America covered the ruling and its immediate implications for employers in detail.
What this means for workforce planning
For senior HR leaders, the practical lesson from the H-1B fee episode is not simply that the policy was struck down. It is that the policy, even while it lasted, forced a structural rethink of how companies approach international talent.
Immigration is no longer a compliance function that sits with legal teams alone. As Safeguard Global noted in its 2026 H-1B employer impact analysis, the fee prompted employers to model scenarios they had not previously considered: whether roles justified a six-figure hiring premium, whether domestic pipelines such as recent graduates on Optional Practical Training could substitute, and whether it made more financial sense to hire internationally but outside the U.S. and skip the visa petition process entirely.
Those questions do not disappear when a court blocks a particular policy. They reflect a broader shift in political risk that HR leaders must now price into workforce strategy on both sides of the Atlantic.
The Reform UK proposal, if ever implemented, would hit sectors reliant on lower-paid foreign workers hardest: retail, hospitality, care, and manufacturing. The U.S. H-1B fee, by contrast, targeted high-skilled workers in specialty occupations, with technology and healthcare as the primary affected industries. The mechanics differ. The underlying logic, making foreign hiring more expensive to shift employer behavior, is the same.
HR leaders watching the Reform UK debate should recognize it not as a distant British political curiosity but as a preview of arguments that are already shaping U.S. workforce policy. The legal block on the H-1B fee does not close the door on further legislative attempts to build similar cost penalties into the hiring of foreign workers in the U.S. The period of the fee’s operation, and the operational disruption it caused even in the months before the court ruled, is a case study in why workforce scenario planning should treat immigration policy as a material business risk, not a background compliance matter.
