The struck-down $100,000 H-1B fee returns as a $103,265 filing charge
DHS says the money is cost recovery, not restriction. For employers, the difference is a contingent $203,265 per hire abroad and a headcount plan hostage to litigation.
The Board Room · Leadership desk
What happened
- The proposal came less than three months after a federal judge in Massachusetts struck down the administration's $100,000 H-1B payment requirement.
- The legal basis has changed: DHS now cites section 286(m) of the Immigration and Nationality Act as cost recovery across multiple federal agencies.
- DHS projects about $8.8 billion a year, routed to USCIS, ICE, CBP, the immigration courts, State and Labor.
Why it matters
- contradiction The $8.8 billion projection implies roughly 85,220 paid petitions, essentially a full cap, while the same filing argues employers will turn to American workers instead.
- exposure An offer to a candidate outside the United States now carries a contingent second charge if the proclamation fee is upheld, so the per-hire liability cannot be fixed at signing.
- decision Cap-subject hiring decisions for 2027 have to be made against a six-figure surcharge that will be payable long before any court resolves whether it was lawful.
- precedent If a filing fee on one visa category can fund four departments under a cost-recovery theory, the same theory is available for other categories without Congress voting on it.
Price a cap-subject offer for next spring and there are two numbers, not one. The proposed charge is $103,265, payable when the petition is filed and imposed in addition to all other applicable fees [1], and it sits on top of the actual or prevailing wage floor employers already owe [13]. If the beneficiary is outside the United States and the September 2025 proclamation's $100,000 fee is later ruled lawful, DHS says both would be owed, which is $203,265 for one employee [21][24]. That is the number to carry for candidates abroad, because the rule itself contemplates the proclamation fee being revived [21].
The rest is a rewrite of purpose. The proclamation's stated aim was to restrict the admission of H-1B holders, and it argued at length that such admissions were harmful [5][6]. A federal judge in the District of Massachusetts read the charge as a tax and struck it down as an intrusion on Congress's taxing authority [3][4]. The replacement is broader, not narrower: it reaches all cap-subject petitions including those using the advanced degree exemption [1], and the asserted purpose is now funding rather than restriction [15]. DHS invokes section 286(m) of the Immigration and Nationality Act, which allows fees set to recover the full costs of providing adjudication and naturalization services [18][19], and stretches that to immigration work at DHS, the Justice Department, State and Labor [17], with immigration courts, ICE and CBP among the recipients [27]. Jonathan Wasden of Wasden Law, who said in June that the administration would look for fresh legal grounds [9], describes the increase as "wholly detached from any fee analysis" [8]. The National Foundation for American Policy's preliminary analysis calls the assumptions behind DHS's no-deterrence claim questionable [26].
The exemption structure is where hiring actually gets redirected. Cap-exempt petitioners, meaning universities and nonprofit or governmental research organizations, pay none of it [10]. International students are roughly 75% to 80% of full-time graduate students in AI-related fields such as computer and information sciences [12]. Set the price at $103,265 a head and the cheapest lawful employer of the people who fill American AI graduate programs becomes the campus lab rather than the company. The on-ramp is being narrowed on the same schedule: DHS finalized a rule in July limiting initial F-1 admission to four years [22], a further rule may reset prevailing wage levels [14], and another is expected to add H-1B restrictions [16].
Vance's endorsement [11] matters less as law than as a signal about how much softening to expect between proposal and final rule. Plan on the surcharge being live through 2027, price the second charge as a contingency, and assume the legal question stays open for years rather than months. The alternative is a headcount model whose unit costs are decided by litigation the company is not party to.
What to watch
- Whether the final rule keeps the $8.8 billion revenue estimate after comments attack the no-deterrence assumptions, or quietly revises it downward.
- Any appeal of the Massachusetts ruling on the $100,000 proclamation fee, which decides whether the double-charge scenario is real.
- The text of the prevailing wage rule and the further H-1B restrictions DHS is expected to propose.
Clarity's read
What the record supports and how the coverage leans. The claims behind it follow.
Reality
- Evidence70
- Adoption10
- Hype gap+45
- Incentives70
- Confidence65
Claim ledger
Ranked by verification strength, evidence, and original report placement.
- [1]
DHS proposes to establish a $103,265 fee, payable at the time of filing, for all H-1B cap-subject petitions, including those eligible for the advanced degree exemption, imposed in addition to all other applicable fees or payments.
- [2]
DHS proposed the fee in a 67-page filing on Monday.
- [3]
In June, a federal judge in the US District Court for Massachusetts ruled the administration's $100,000 H-1B payment requirement unlawful and struck it down; the new proposal came less than three months later.
- [4]
The judge struck down the $100,000 fee, calling it an intrusion on Congress's taxing authority.
- [5]
A presidential proclamation in September 2025 imposed a $100,000 fee on the entry of new H-1B visa holders.
- [6]
The administration stated that the purpose of the September 2025 $100,000 H-1B fee was to restrict the admission of H-1B visa holders, and the proclamation gave a lengthy discussion of why officials thought admitting H-1B visa holders was harmful.
- [7]
The H-1B annual limit is 65,000, with a separate 20,000 exemption for individuals with advanced degrees.
- [8]
Jonathan Wasden of Wasden Law said the new fee is "allegedly authorized by Section 1356(m)" and that there are two problems for the government, the first being that "the massive increase is wholly detached from any fee analysis."
- [9]
In a June interview after the district court struck down the $100,000 fee, Wasden said he believed the administration might try new legal grounds to justify the fee.
- [10]
The new fee would not apply to cap-exempt petitions, which include universities, educational institutions and nonprofit or governmental research organizations.
- [11]
Vice President JD Vance backed the proposed fee, writing on Monday while sharing a Wall Street Journal post about it: "If an American corporation needs workers, it should hire and train Americans." The post had over 2 million views as of press time.
- [12]
Companies recruiting at US universities find that international students account for approximately 75% to 80% of full-time graduate students in AI-related fields such as computer and information sciences.
- [13]
H-1B employers must pay the higher of the actual or prevailing wage paid to US professionals with similar experience and qualifications.
- [14]
A separate proposed rule may price many H-1B visa holders and employment-based immigrants out of the US labor market by changing prevailing wage levels.
- [15]
After the district court struck down the fee as an unlawful tax, the administration proposed to overcome the ruling with a broader tax and by asserting that the purpose is no longer to restrict H-1B entry but to fund immigration-related functions across the US government.
- [16]
Another upcoming rule may introduce additional H-1B restrictions.
- [17]
DHS says the fee would serve as a dedicated revenue mechanism to help recover a portion of the federal government's costs of administering the lawful immigration system, including activities carried out by DHS, the Justice Department, the State Department and the Labor Department.
- [18]
DHS says the fee is designed consistent with section 286(m) of the Immigration and Nationality Act, 8 U.S.C. 1356(m), to recover a portion of the full costs of providing immigration adjudication and naturalization services incurred by multiple federal agencies.
- [19]
Section 1356(m) provides that fees for providing adjudication and naturalization services may be set at a level ensuring recovery of the full costs of providing all such services, including services provided without charge to asylum applicants or other immigrants, and any additional costs of administering the fees collected.
- [20]
DHS said that if the new fee were imposed, US employers would be less likely to hire an H-1B worker over a "qualified and highly-skilled American worker" unless they have "no alternative for obtaining the specialized skills of the employee."
- [21]
If the H-1B visa holder is outside the United States and the $100,000 tax from the September 2025 proclamation is later ruled lawful, an employer would need to pay both, totaling over $200,000 for a single employee.
- [22]
In July, DHS finalized a rule limiting the initial admission period for international students on F-1 visas to four years.
- [23]
DHS's projected $8.8 billion in annual fee revenue divided by the $103,265 per-petition charge implies about 85,220 paid petitions a year, roughly the entire 85,000 annual cap of 65,000 plus the 20,000 advanced degree exemption.
- [24]
The two charges stacked come to $203,265 per employee.
- [25]
DHS said in the filing that H-1B petitioners are "willing and able" to pay an additional fee.
- [26]
A preliminary National Foundation for American Policy analysis finds DHS uses questionable assumptions to claim the $103,265 in higher costs will not significantly reduce H-1B petitions.
- [27]
DHS projected in its filing that about $8.8 billion in annual revenue from these petitions would support immigration-related activities at USCIS, ICE, Customs and Border Protection, the Justice Department's immigration courts, the State Department and the Labor Department.
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Sources
2 independent publishers whose own reporting we read for this story.
- businessinsider.comJD Vance backs proposed new H-1B fee: Companies should ‘hire and train Americans’
1 article · August 25, 2026
- forbes.comDHS Immigration Rule Proposes A $103,265 Tax On New H-1B Visa Holders
2 articles · August 26, 2026
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