Introduction
The Trump administration’s $100,000 fee on certain H-1B visa petitions has been one of the most consequential—and legally contested—immigration policies of the past year. Announced by presidential proclamation in September 2025, the fee was intended to reshape the H-1B program by making it prohibitively expensive for companies to hire foreign workers from abroad. But nearly a year later, the fee is not being collected, blocked by federal courts that found it unlawful, even as the administration fights to revive it and pursues a new version through formal rulemaking. Here is a comprehensive look at how the policy emerged, what courts have said, and where matters stand as of October 2026.
How the $100,000 H-1B Fee Was Created
On September 19, 2025, President Donald Trump signed a presidential proclamation titled “Restriction on Entry of Certain Nonimmigrant Workers.” The proclamation invoked the president’s authority under Section 212(f) of the Immigration and Nationality Act, which allows the president to restrict the entry of foreign nationals deemed detrimental to U.S. interests.
The core mechanism was straightforward: any new H-1B petition filed on or after September 21, 2025, would need to be accompanied by a $100,000 payment as a condition of eligibility. Without proof of payment or an approved exception, the petition would be denied.
The stated rationale was to reform the H-1B program and protect American workers. The proclamation directed the Department of Labor to revise prevailing wage levels and Homeland Security to prioritize high-skilled, high-paid workers in the H-1B lottery.
Who Was Subject to the Fee
USCIS issued implementing guidance that clarified the scope of the fee, which proved narrower than initial reactions suggested.
The fee applied to:
- New H-1B petitions filed on or after September 21, 2025, for beneficiaries outside the United States who required consular notification, port-of-entry notification, or pre-flight inspection to enter the country
- Petitions where the beneficiary was in the U.S. but ineligible for a change of status, such as DACA recipients or individuals paroled into the country
The fee did not apply to:
- Petitions filed before September 21, 2025
- H-1B extensions, amendments, or changes of employer for individuals already in the U.S. in valid H-1B status
- Changes of status from F-1 student visas to H-1B for individuals already in the United States
- Previously issued H-1B visas and renewals with the same employer
This distinction was significant. The fee was structured as a one-time payment tied to entry from abroad, not an annual charge and not a blanket tax on all H-1B hiring.
Exceptions: “Extraordinarily Rare”
The proclamation allowed the Secretary of Homeland Security to grant exceptions to the fee, but USCIS made clear these would be granted only in “extraordinarily rare circumstances”.
To qualify for an exception, employers had to demonstrate all four of the following:
- The worker’s presence in the U.S. is in the national interest
- No American worker is available to fill the position
- The foreign national poses no threat to U.S. security or welfare
- Requiring the payment would significantly undermine U.S. interests
The “no American worker available” requirement was particularly notable because it borrowed from the PERM labor certification process—a more stringent standard that Congress did not impose on the H-1B program. Legal analysts noted that H-1B petitions traditionally require only a Labor Condition Application, which obligates employers to pay prevailing wages but does not require proof that no qualified U.S. worker exists.
Exception requests had to be submitted with full supporting documentation to a dedicated DHS email address. USCIS emphasized that approvals would be granted sparingly.
The Legal Challenge: Courts Strike Down the Fee
The $100,000 fee was almost immediately challenged in federal court. Multiple lawsuits were filed, including one by a consortium of nonprofits and another by the U.S. Chamber of Commerce.
The Massachusetts Decision
On June 8, 2026, the most significant ruling came from the U.S. District Court for the District of Massachusetts in State of California et al. v. Noem et al..
Judge Leo T. Sorokin ruled that the $100,000 payment requirement constituted an unauthorized tax, not a legitimate regulatory fee. The court reasoned that while the president has broad authority under the Immigration and Nationality Act to restrict entry of noncitizens, the INA does not delegate Congress’s exclusive constitutional power to lay and collect taxes to the executive branch.
The court also found that the government’s implementation of the fee via presidential proclamation violated the Administrative Procedure Act. Agencies failed to comply with mandatory notice-and-comment rulemaking procedures, exceeded their statutory fee-setting authority, and acted arbitrarily and capriciously by not considering employers’ reliance interests.
The court vacated the fee in its entirety, effective immediately.
The Appeal and Stay Denial
The government appealed and sought an emergency stay to keep the fee in effect during the appeal. The fee was briefly reinstated from June 12 to July 24, 2026, based on an administrative stay.
On July 24, 2026, the U.S. Court of Appeals for the First Circuit denied the government’s motion to keep the fee in effect. The appeals court concluded that the government had not shown it was likely to succeed on appeal.
The practical result: the $100,000 fee cannot be enforced while the appeal continues on the merits. USCIS updated its website to acknowledge the vacatur, stating it “will comply with the court’s order while DHS considers next steps”.
The Administration’s Response: Extension and New Executive Order
Despite the legal setback, the administration signaled it would not abandon the policy.
On September 18, 2026, President Trump signed two actions:
Proclamation Extension
The administration extended the $100,000 H-1B proclamation framework for another year, through September 21, 2027. The extension stated that the “restrictions enacted by the 2025 Proclamation have proven to be highly effective” and that the underlying conditions necessitating them “persist”.
Critically, however, the extension did not change the legal reality. The First Circuit’s denial of the stay means the fee remains unenforceable while the appeal proceeds. As the Klasko law firm noted, the new proclamation “is an extension of 2025 Proclamation, which is not currently enforceable”.
New Executive Order on H-1B Scrutiny
The second action was a new executive order titled “Enhancing Program Integrity and Interagency Coordination in the Administration of the H-1B Nonimmigrant Visa Program”.
This order directs the Secretaries of State, Labor, and Homeland Security—coordinating with Commerce, Education, and the Small Business Administration—to review H-1B petitions, labor condition applications, and visa applications with heightened scrutiny.
The key focus is on employers that have engaged in layoffs. The order states that “employers have laid off large numbers of highly skilled American workers, only to promptly hire large numbers of H-1B workers who are often lower-skilled and lower-paid”.
Under the order, agencies are directed to consider whether an employer sponsor “directly or indirectly engaged in layoffs within the previous year” when reviewing H-1B petitions.
Vice President JD Vance publicly defended the administration’s approach in a September 2026 podcast appearance. “The H-1B should not exist to replace American workers with low-wage foreigners,” Vance said. “It should exist to enrich the American economy.” He added that the administration sought administrative measures because Congress “lacked political will” to change the law.
The Proposed $103,265 Fee: A New Legal Pathway
While the original $100,000 fee remains blocked, the Department of Homeland Security has pursued an alternative approach.
On August 25, 2026, DHS published a notice of proposed rulemaking for a new fee of $103,265 on H-1B cap-subject petitions. This is a fundamentally different legal mechanism from the proclamation—a formal rulemaking process rather than executive action.
What the Proposed Rule Would Do
The new fee would apply to:
- Petitions filed under the regular 65,000 annual cap
- Petitions filed under the 20,000 advanced degree exemption, commonly called the master’s cap
The fee would not apply to:
- Cap-exempt petitions, including those from universities, related nonprofit entities, nonprofit research organizations, and governmental research organizations
- Extensions, amendments, or transfers for beneficiaries already counted against the cap
DHS estimates the fee would generate approximately $8.8 billion in annual revenue, distributed across USCIS, immigration courts, ICE, the Department of Labor, the State Department, and CBP. The agency acknowledges the impact would be significant, estimating that roughly 76 percent of small entities filing H-1B cap petitions would experience a substantial economic effect.
The proposed rule explicitly states that the new fee would be imposed “in addition to all other applicable fees or payments, including any separate payment obligation required under a presidential proclamation”—meaning if the original fee were ever revived, employers could theoretically owe both.
Timeline and Next Steps
The $103,265 fee is not in effect. It is a proposal that must complete the rulemaking process, including a 30-day public comment period. DHS will review comments before deciding whether to issue a final rule, modify it, or withdraw it.
Litigation is widely expected if the rule is finalized, given the scale of the fee and the mechanics of interagency revenue transfers.
What the Litigation Means for Employers Now
For employers navigating the H-1B landscape in October 2026, the practical implications are as follows:
New H-1B petitions for workers abroad: The $100,000 fee cannot be collected while the First Circuit appeal is pending. Employers can file without the additional payment.
Extensions, amendments, and changes of employer: These were never subject to the fee and remain unaffected.
Change of status from F-1 to H-1B: These domestic filings are exempt from the fee.
Strategic planning: The uncertainty is not resolved. Employers should continue monitoring both the First Circuit appeal and the proposed rulemaking. The administration has demonstrated its intent to impose substantial fees on H-1B hiring, and a favorable court ruling or finalized rule could change the landscape again.
The Broader Policy Context
The $100,000 fee is part of a broader effort by the Trump administration to overhaul the H-1B program. Other elements include:
- Weighted lottery: A proposed DHS rule would replace the random H-1B lottery with a system prioritizing higher-wage, higher-skilled workers
- Prevailing wage increases: The Department of Labor has been directed to revise and raise prevailing wage levels for H-1B positions
- Increased enforcement: More onsite visits and scrutiny of employer compliance with H-1B terms
- Layoff scrutiny: The September 2026 executive order adds a new layer of review for employers that have recently laid off workers
These changes reflect a consistent policy direction: restricting the use of H-1B visas and prioritizing American workers, while making it more expensive and administratively burdensome for employers to sponsor foreign talent.
FAQ
Is the $100,000 H-1B fee currently in effect?
No. The fee is not being collected as of October 2026. A federal court vacated the policy in June 2026, and the First Circuit denied the government’s request to keep the fee in effect during the appeal. USCIS has confirmed it will comply with the court order.
Who was supposed to pay the $100,000 fee?
The fee applied to new H-1B petitions filed on or after September 21, 2025, for beneficiaries outside the United States who required consular notification or port-of-entry notification. It did not apply to extensions, amendments, changes of employer, or changes of status for individuals already in the U.S..
What did the court say about the fee?
The U.S. District Court for the District of Massachusetts ruled that the $100,000 payment was an unlawful tax, not a permissible regulatory fee, because the president lacks constitutional authority to impose taxes without congressional approval. The court also found the government violated the Administrative Procedure Act by skipping notice-and-comment rulemaking.
What is the $103,265 fee?
It is a proposed fee published by DHS in August 2026 through formal rulemaking. It would apply to H-1B cap-subject petitions and is not yet in effect. The rule is subject to a public comment period and potential litigation.
Can employers file new H-1B petitions now without paying the fee?
Yes. While the court order remains in place, employers sponsoring H-1B workers from abroad do not have to include the $100,000 payment. Standard filing fees still apply.
What to Watch Next
- First Circuit ruling: The appeal of the Massachusetts decision remains pending. A ruling could either affirm the vacatur of the fee or revive it. The government could also seek Supreme Court intervention.
- Proposed rulemaking: DHS is expected to review public comments on the $103,265 proposed fee and decide whether to issue a final rule. A final rule would likely face immediate legal challenges.
- USCIS guidance updates: The agency has not updated its website following the September 2026 proclamation extension. Further guidance on the status of the fee and the new executive order’s layoff scrutiny provisions is anticipated.
- Employer compliance: The new executive order directing heightened scrutiny of employers with recent layoffs may affect H-1B petition adjudications. How agencies implement this directive will be closely monitored.