The controversial $100,000 H-1B supplemental fee remains unenforceable after the U.S. Court of Appeals for the First Circuit dealt the Trump administration another setback on July 24, 2026. A three-judge panel denied the federal government's emergency motion to stay a lower court order that had vacated the policy in its entirety, ensuring that employers will not face the massive surcharge while the appeal proceeds on the merits.
What Happened
On July 24, 2026, in State of California v. Noem, the U.S. Court of Appeals for the First Circuit denied the U.S. government's request for a stay on a temporary pause of the $100,000 H-1B fee policy.
This came after the U.S. District Court for the District of Massachusetts vacated the controversial $100,000 H-1B proclamation fee, ruling it an unlawful tax and an improper use of executive power.
The procedural path to this moment involved several rapid developments.
Following the June 8, 2026 district court decision, the federal government filed a notice of appeal and moved to stay the ruling. On June 12, 2026, Judge Leo T. Sorokin denied the government's request for a stay pending appeal but granted in part the government's alternative request for an administrative stay.
That temporary measure kept the fee nominally alive just long enough for the First Circuit to weigh in — and the appellate court sided with the states.
In denying the stay, the First Circuit found that the government had not made the required strong showing that it was likely to succeed in challenging the district court's conclusion that the agencies exceeded their statutory authority.
The First Circuit agreed with the lower court and noted that the plaintiff states were likely to be substantially injured by the stay.
Origins of the Fee
On September 19, 2025, President Trump issued Presidential Proclamation 10973, which required employers to submit a $100,000 payment with H-1B petitions for foreign nationals located outside the United States.
The administration stated that the fee was intended to address perceived abuse of the H-1B program and protect U.S. workers, specifically focusing on science, technology, engineering, and mathematics (STEM) occupations.
The proclamation took effect just two days later, on September 21, 2025, and was set to remain in place for twelve months.
The fee represented a staggering increase in filing costs.
The $100,000 fee represents a dramatic increase over the usual H-1B filing-related fees, which typically range from $2,500 to $5,000.
If the fee survives, a standard H-1B petition's government cost would rise from approximately $1,070 to more than $101,000 — including existing fraud-prevention and training surcharges — effectively pricing small and mid-sized employers out of the program.
The Legal Challenge
Twenty states, led by California and Massachusetts, challenged the policy in federal court, arguing that the administration exceeded its statutory authority and violated the Administrative Procedure Act (APA).
The 20-state coalition was led by Attorneys General Andrea Joy Campbell of Massachusetts and Rob Bonta of California.
The states alleged that the policy would significantly impair their ability to recruit and retain highly skilled workers for public universities, educational institutions, and healthcare systems.
Because the Immigration and Nationality Act does not expressly grant this fee-imposing power under the statutes relied upon by the administration, the First Circuit declined to keep the $100,000 fee in place while the appeal proceeds.
Impact on Employers and Workers
The real-world consequences of the fee have been stark.
Workforce-constrained hospitals anticipated patient-care disruption; more than 70% of surveyed American Hospital Association members flagged its impact, and only 85 fees were paid nationwide by February 2026.
Healthcare employers, especially in rural and medically underserved areas, rely heavily on international medical graduates to fill primary care and specialty shortages, and the fee could make routine hiring of IMGs financially unworkable for many healthcare employers.
The impact extends well beyond healthcare.
The $100,000 visa fee threatens the quality of education, healthcare, and other core services available to residents across all states. The United States faces a nationwide teacher shortage, and in the 2024–2025 school year, 74% of school districts reported having trouble filling open positions.
A Deepening Circuit Split
The First Circuit's decision adds to a growing divergence among federal courts.
The Massachusetts district court's holding starkly contradicts a conclusion reached in the U.S. District Court for the District of Columbia, which upheld the fee proclamation in a lawsuit brought by the U.S. Chamber of Commerce and the Association of American Universities.
The D.C. case is currently on appeal before the U.S. Court of Appeals for the D.C. Circuit, which held oral argument in March 2026.
During those oral arguments,
a federal appellate panel focused on whether the $100,000 fee should be considered a tax, or a use of presidential authority to restrict entry to the U.S.
The U.S. Chamber of Commerce and other groups challenging the fee claim it is undercut by a Supreme Court decision overturning President Trump's global tariffs regime — Learning Resources, Inc. v. Trump — which held that only Congress has the power to impose revenue-raising measures.
Meanwhile, a lawsuit challenging the fees brought by healthcare organizations, labor unions, and educational institutions remains pending in the U.S. District Court for the District of California.
With a circuit split in place and the constitutional question of executive taxing authority unresolved, this case is a strong candidate for Supreme Court review.
What This Means Right Now
For employers and H-1B workers, the practical takeaway is clear — for now.
Employers are not currently required to submit a $100,000 payment in connection with H-1B petitions, and USCIS and the Department of State cannot enforce the vacated policy while the appeal remains pending.
Since the fee is currently unenforceable, employers holding petitions solely due to the $100,000 cost can confidently proceed with standard filing fees ($2,000–$5,000), knowing they are acting within the current legal landscape.
Maintaining records of any paid fees is essential, as the court's view of the fee as an unlawful tax could support future refund claims for employers.
However,
this was an interim decision regarding the government's request for a stay, and the court has not yet issued a final ruling on the complete merits of the appeal.
Employers should continue monitoring developments closely, as a future appellate decision could affect H-1B filing requirements.
Looking Ahead
The road ahead remains uncertain. The First Circuit will proceed with briefing and oral argument on the merits of the government's appeal. Simultaneously, the D.C. Circuit's forthcoming decision in the Chamber of Commerce case could either deepen or resolve the circuit split.
The government's appeal of the Massachusetts decision adds to a potential circuit split which could end up in the Supreme Court of the United States.
For H-1B workers, sponsoring employers, universities, and healthcare systems across the country, the stakes could not be higher. The outcome will determine whether the executive branch can unilaterally impose a fee of this magnitude on a congressionally created visa program — a question that sits at the intersection of immigration law, constitutional separation of powers, and administrative procedure.
Employers and foreign national workers are encouraged to work closely with experienced immigration counsel to navigate the current landscape and prepare for any potential changes.
ClinchLaw is monitoring this case and will provide updates as the litigation progresses.