New H-1B Proposal Faces Legal Battle After Earlier $100,000 Fee Was Struck Down

The Trump administration’s latest attempt to impose a six-figure H-1B fee is likely to face another legal battle. The Department of Homeland Security has proposed a $103,265 charge for cap-subject H-1B petitions, only months after a federal judge struck down the administration’s previous $100,000 fee.

The legal dispute centers on a basic question: Does the executive branch have the authority to impose such a large fee without Congress explicitly approving it?

In June 2026, U.S. District Judge Leo Sorokin ruled that the earlier $100,000 H-1B fee was unlawful. The judge concluded that the payment functioned as a tax and that the president had bypassed Congress by imposing it without congressional authorization. The ruling followed a lawsuit brought by 20 states led by California and Massachusetts.

The Trump administration appealed the decision, but the effort to pause the ruling was unsuccessful.

Now DHS has chosen a different route. Rather than relying on a presidential proclamation, it has proposed a formal regulation. The administration argues that the new fee would recover costs incurred by the federal government in operating the lawful immigration system.

According to DHS, the proposed fee could generate approximately $8.8 billion each year. The department says the revenue would support activities including immigration adjudication, national security vetting, fraud detection, immigration courts, visa processing and technological modernization.

That explanation is likely to become central to any future court case.

Opponents may argue that calling the payment a fee does not automatically make it lawful if the amount is far greater than the government’s actual cost of processing an H-1B petition. They could also challenge whether DHS has authority to use the revenue for the broad range of immigration-related activities described in the proposal.

The administration, meanwhile, is expected to defend the rule by arguing that the money is intended to help fund the federal immigration system and that DHS has regulatory authority to establish the charge.

The legal fight could therefore determine more than the future of one immigration fee. It could establish important boundaries on how executive agencies can use fees to finance federal programs.

The economic consequences are also significant. H-1B visas are widely used by technology companies, universities, hospitals and other employers. A fee of more than $100,000 could discourage companies from sponsoring foreign workers, especially where employers have access to domestic candidates.

The administration says that is partly the point. Officials argue that companies should have stronger incentives to hire Americans when qualified U.S. workers are available. Critics respond that many employers use H-1B workers because they cannot find enough qualified people for particular specialized jobs.

The dispute is particularly important for industries with persistent talent shortages. Research institutions, hospitals and universities have previously warned that restrictions on foreign professionals could make it harder to fill specialized positions.

The proposed regulation will first undergo a public comment period of 30 days. Employers, workers, state governments, universities, business organizations and immigration advocates can submit comments. DHS will then decide whether to modify or finalize the rule.

If finalized, litigation is likely.

That means the final fate of the $103,265 fee could take months or longer to determine. Employers and foreign workers therefore face a period of uncertainty in which immigration planning could become more complicated.

The broader message from the administration is clear: it wants a more restrictive and expensive H-1B system. But whether the executive branch can legally accomplish that without congressional action remains one of the most important questions surrounding the proposal.