Less than two months after a federal appeals court blocked a controversial $100,000 fee for certain H-1B petitions, the Department of Homeland Security has proposed a new fee of $103,265 for cap-subject H-1B petitions.
At first glance, the proposal may appear to be simply an effort to reinstate the earlier fee through formal notice-and-comment rulemaking, but a closer look reveals that it is broader than that.
The previous $100,000 payment primarily targeted certain petitions for H-1B workers outside the United States. The newly proposed fee would apply to all cap-subject H-1B petitions, including those filed under the U.S. advanced-degree exemption. It would be imposed in addition to the ordinary H-1B filing fees and would apply regardless of the petitioner’s size or nonprofit status.
Just as significantly, most of the projected revenue would not be used to adjudicate the H-1B petitions on which the fee is imposed. DHS proposes using cap-subject H-1B employers to generate approximately $8.8 billion annually for immigration-related activities throughout the federal government—including nearly $3 billion for the immigration-court system.
The proposal is not yet in effect. Employers do not currently owe the $103,265 fee, and written comments may be submitted through September 24, 2026. Nevertheless, the proposal signals another potentially fundamental change in the cost and accessibility of the H-1B program.
What exactly has DHS proposed?
On August 25, 2026, DHS published a proposed regulation that would require payment of an additional $103,265 whenever an employer files a cap-subject H-1B petition.
The fee would apply both to petitions subject to the regular annual limit of 65,000 and to petitions filed under the additional allocation of 20,000 visas for beneficiaries holding qualifying advanced degrees from U.S. institutions.
The proposed fee would be separate from—and added to—the other fees that may accompany an H-1B petition, including the Form I-129 filing fee, the Asylum Program Fee, the Fraud Prevention and Detection Fee, the American Competitiveness and Workforce Improvement Act fee, and any optional premium-processing fee.
The proposal does not establish an effective date because it is not yet a final rule. DHS must first consider the public comments and decide whether to issue, revise, or withdraw the regulation.
Is this the same as the earlier $100,000 H-1B payment?
No. Although the amounts are similar, they are separate measures based on different asserted legal authority.
In September 2025, a presidential proclamation imposed a $100,000 payment in connection with certain H-1B petitions for beneficiaries outside the United States. The administration relied principally on the President’s statutory authority to restrict the entry of noncitizens whose entry is considered detrimental to the interests of the United States.
In June 2026, a federal district court in Massachusetts held that the payment functioned as an unauthorized tax and that its implementation also violated the Administrative Procedure Act. The government appealed, but the U.S. Court of Appeals for the First Circuit declined to keep the payment in force while the appeal proceeds. USCIS therefore cannot currently collect the proclamation payment.
The new proposal follows the ordinary rulemaking process and invokes DHS’s authority to recover costs of providing immigration adjudication and naturalization services.
Notice-and-comment rulemaking may address one of the procedural defects identified in the earlier litigation. It does not necessarily answer the broader question: whether the agency possesses statutory authority to impose this particular fee or to assign such a wide range of government expenses exclusively to cap-subject H-1B petitioners.
Could an employer ever be required to pay both amounts?
Potentially, although that is unlikely under the measures’ present timelines.
DHS expressly states that the proposed $103,265 fee would be separate from the proclamation payment. If both requirements applied to a particular petition, the employer would have to pay both, in addition to the ordinary filing fees.
The proclamation is presently scheduled to expire on September 21, 2026, and DHS acknowledges that it will likely expire before the new fee could take effect. The government is also currently prohibited from collecting the proclamation payment because of the Massachusetts court’s judgment.
The possibility of cumulative payments could return, however, if the government prevails in the pending appeal and the proclamation is extended or renewed. The proposed regulation accordingly preserves the possibility that an employer could eventually face more than $200,000 in special H-1B charges for a single petition.
Which H-1B petitions would be subject to the proposed fee?
The decisive question would be whether the petition seeks an initial cap-subject H-1B allocation.
Unlike the proclamation payment, the proposed fee is not limited to beneficiaries outside the United States. Its language encompasses all cap-subject petitions. That would include petitions requesting a change to H-1B status for selected F-1 students and other nonimmigrants already lawfully present in the United States.
This difference is particularly important for employers that assumed domestic change-of-status cases would remain outside the reach of a six-figure charge.
The proposed fee generally would not apply to:
- Petitions filed by qualifying cap-exempt institutions and organizations;
- Extensions or changes of employment for H-1B workers previously counted against the cap;
- Concurrent H-1B petitions for workers who remain eligible for cap-exempt treatment; or
- Certain petitions involving extensions beyond the ordinary six-year limitation under the American Competitiveness in the Twenty-First Century Act.
Whether a particular petition is cap-subject can depend on the beneficiary’s immigration history, prior H-1B use, proposed employer, and employment arrangement. Employers should not assume that every petition labeled “H-1B” would carry the proposed fee.
Would small businesses and nonprofit employers receive reduced fees?
Not if the rule is finalized as proposed.
DHS proposes applying the fee uniformly to all cap-subject petitioners regardless of size or nonprofit status. A nonprofit organization that is not independently eligible for a cap exemption could therefore owe the same $103,265 as a large multinational corporation.
DHS estimates that the proposal would significantly affect 11,051 small entities—approximately 76 percent of the affected small entities it identified. Nevertheless, the agency rejected exemptions or discounts for smaller petitioners, reasoning that they would reduce projected revenue and might encourage employers to structure their operations to obtain lower fees.
This could substantially change which employers can participate in the H-1B program. A large corporation may be able to absorb a six-figure immigration charge for a highly valued employee. Most startups, small professional practices, school systems, healthcare providers, and other smaller employers could not.
Although the fee would formally apply to employers rather than employees, the practical consequences could also fall on foreign professionals through lost job opportunities, reduced hiring, or employer decisions to withdraw from the cap process altogether.
Would the proposal make H-1B selection more expensive as well as more competitive?
Yes. The proposal would operate alongside the new weighted H-1B selection process used for the FY 2027 cap season.
Under that system, registrations associated with higher wage levels generally receive greater weight in the selection process. If the new fee is finalized, an employer would first compete in a selection system favoring higher-paid positions and then, if selected, face an additional $103,265 charge to file the petition.
DHS is also considering the effects of the Department of Labor’s separate proposed prevailing wage rule, which could raise required wages in H-1B, H-1B1, E-3, and PERM cases.
These measures should not be viewed in isolation. Collectively, higher wage requirements, weighted selection, new filing fees, and expanded compliance costs could transform the H-1B program from one available to employers of many different sizes into one concentrated among organizations capable of paying both high salaries and exceptionally high government charges.
Does formal rulemaking resolve the legal problems with the earlier payment?
It resolves one obvious procedural problem but may create or preserve others.
The earlier proclamation payment was implemented without notice-and-comment rulemaking. DHS is now providing a public comment period and proposing to place the new fee directly in its regulations.
But an agency cannot create authority merely by following the correct procedure. Any final rule must still remain within the power delegated by Congress, reasonably connect the amount charged to permissible government costs, adequately consider important consequences and alternatives, and explain why the selected group should bear the assigned expenses.
The magnitude and allocation of the fee could invite several questions:
- Are all the expenses assigned to the fee properly characterized as costs of providing immigration adjudication and naturalization services?
- Is it reasonable to allocate nearly $3 billion in immigration-court costs to cap-subject H-1B petitioners?
- Has DHS adequately justified charging one relatively narrow group for expenses distributed throughout the immigration system?
- Does the proposed fee function as genuine cost recovery, or principally as a revenue measure or deterrent?
- Has DHS sufficiently addressed its admitted substantial effect on small employers?
- Is its assumption that demand will remain effectively unchanged adequately supported?
These questions do not predetermine whether a final regulation would survive judicial review. They do, however, demonstrate why notice and comment alone may not resolve the legal controversy.
What should employers do now?
Employers do not owe the proposed fee, and the publication of the proposal does not change the cost of any petition filed today.
Organizations that expect to sponsor cap-subject H-1B workers should nevertheless evaluate how the proposal would affect future recruiting and immigration planning. In particular, they may wish to:
- Determine which anticipated filings would actually be cap-subject;
- Identify employees who may already have been counted against the H-1B cap;
- Evaluate cap-exempt or concurrent H-1B arrangements where independently available;
- Consider O-1, L-1, TN, E-1, E-2, E-3, H-1B1, or other classifications where the facts support them;
- Begin appropriate permanent residence planning earlier;
- Assess whether potential H-1B candidates could remain employed if the organization could not justify a six-figure filing fee; and
- Consider submitting a documented public comment addressing the proposal’s operational and economic effects.
Public comments will be most useful when they provide concrete information. Employers may wish to explain how the fee would affect hiring, research, healthcare delivery, education, startup growth, regional labor shortages, or other organizational activities, supported where possible by actual budgets and workforce data.
Comments must be submitted through the federal rulemaking portal by September 24, 2026.
Frequently Asked Questions
Is the $103,265 H-1B fee currently in effect?
No. It is part of a proposed regulation. Employers do not currently have to pay it.
Would it apply to every H-1B petition?
No. It would apply to cap-subject petitions, including petitions under the U.S. advanced-degree allocation. It generally would not apply to cap-exempt petitions or qualifying extensions and changes of employment for workers previously counted against the cap.
Would it apply to an F-1 student changing status to H-1B?
If the student requires a new cap-subject H-1B allocation, the proposed language would apply even though the beneficiary is already in the United States and requests a change of status.
Would universities have to pay the fee?
A qualifying cap-exempt university petition generally would not be subject to it. A university or affiliated organization filing a petition that is actually cap-subject could be. Cap exemption eligibility must be evaluated under the applicable statutory and regulatory requirements.
Is the earlier $100,000 proclamation payment currently being collected?
No. A federal district court vacated the implementing guidance, and the First Circuit declined to stay that judgment while the government appeals.
Could both six-figure charges eventually apply to one petition?
Potentially. DHS states that the two charges are separate and that both would be payable when both apply. Under the present timeline, however, the proclamation is expected to expire before the proposed fee could take effect unless it is extended or renewed.
When might the new fee take effect?
There is no effective date yet. DHS must review the comments and publish a final rule before imposing the fee. The proposal could be revised, delayed, withdrawn, or challenged in court.
A Broader Question About the Future of H-1B Sponsorship
The proposed $103,265 fee is not simply a slightly larger replacement for the blocked $100,000 proclamation payment. It rests on different authority, applies more broadly, and seeks to make cap-subject H-1B employers a principal funding source for immigration operations across several federal agencies.
Whether the proposal becomes final—and whether it survives any resulting litigation—remains uncertain. Its direction is nevertheless clear. Employers should expect H-1B sponsorship decisions to involve increasingly substantial questions of cost, timing, workforce planning, and legal risk.
Buda Law Group assists employers and foreign professionals in evaluating H-1B eligibility, cap exemptions, alternative visa classifications, and long-term employment-based immigration strategies. Employers concerned about the proposed fee or planning for a future H-1B filing should consult qualified immigration counsel regarding the options available in their particular circumstances.
This article provides general information and does not constitute legal advice. The $103,265 fee is a proposal and is not currently in effect. Its final terms, effective date, and legal status may change through the rulemaking process, litigation, or further government action. The effect of any new requirement will depend on the facts and procedural posture of the individual case. Consultation with qualified immigration counsel is recommended.