On August 25, 2026, the Department of Homeland Security (DHS) proposed a $103,265 fee on all 85,000 annual H-1B cap-subject petitions, whether the worker is inside or outside of the U.S. This proposed fee would be paid at the time of filing the H-1B cap-subject petition and would be in addition to the other applicable fees. However, the fee would not apply to H-1B cap-exempt petitions, such as petitions filed by certain nonprofit research organizations, governmental research organizations, and higher education institutions.
Importantly, this proposed rule is still in the initial stages of the rulemaking process, and has not yet been finalized. If finalized, this rule is should not have any impact prior to March 2027’s H-1B Cap Lottery for Fiscal Year 2028 and is highly likely to encounter numerous legal challenges which could further delay or pause any implementation.
According to USCIS spokesperson Zach Kahler, “[t]he proposed H-1B fee is intended to recover the costs incurred across the federal government to adjudicate, vet, and support lawful immigration programs that otherwise must be funded by taxpayers.” DHS contends that the new fee would generate revenue, approximately $8.8 billion annually, to provide additional resources for USCIS to fund adjudications, systems modernization, fraud detection and national security vetting, records and fee collection operations, and coordination with other DHS components; and directly support activities related to the lawful immigration system carried out by USCIS, CBP, ICE, EOIR, DOS, DOL, to the extent permitted by statute and appropriations law, including but not limited to immigration court operations, consular visa processing, and labor standards enforcement.
This new fee comes on the heels of recent court rulings which have blocked the September 2025 Presidential Proclamation, whereby the government would require a $100,000 fee be paid by new H-1B workers located outside of the United States. Litigation on the September 2025 Presidential Proclamation is ongoing, and this new proposed fee, which is separate and apart from the Proclamation, is also likely to generate numerous legal challenges.
Unlike the September 2025 Presidential Proclamation, this new $103,265 fee is based on the Immigration and Nationality Act (INA), specifically 8 USC 1356, which states in pertinent part that “[f]ees for providing adjudication and naturalization services may be set at a level that will ensure recovery of the full costs of providing all such services” and to prescribe rules and regulations to carry out the fee provisions. DHS contends that this new fee is therefore an exercise of their existing fee-setting authority. However, this presents a number of potential legal issues and challenges including that (1) this massive increase exceeds the costs of administering USCIS services and is wholly detached from any relevant fee analysis or explanation of cost recovery; (2) the collected fees could be allocated to other DHS components than USCIS, such as Departments of State, Labor, and Justice; and (3) changing the legal authority to an INA statute does not eliminate the underlying legal challenge that this fee amounts to a tax, which only Congress has the authority to enact.
Furthermore, this new fee would almost certainly have a further chilling effect on the H-1B cap-subject program by preventing employers from hiring high-skilled foreign nationals due to this substantial increase in costs associated with sponsorship, particularly for small companies. H-1B visas are often the only way for high-skilled foreign nationals to work within the U.S. and many of these individuals work in the critical areas of healthcare, technology, engineering, and manufacturing. The overall short-term and long-term negative effects on the U.S. economy and industries would be far-reaching and long-lasting.
This fee rule is not yet final and is currently undergoing a 30-day public comment period, after which DHS must review the comments received before it can publish the final rule. Overall, the process could take many months before the rule would be made official, especially given the likelihood of legal challenges.
We will continue monitoring this rulemaking process, as well as any related litigation, and provide updates as they become available. Please contact us directly to address any specific questions or concerns, including how this fee could affect H-1B sponsorship. Our Firm remains committed to providing innovative and strategic solutions to get the work done, particularly during these ever-changing times.
