The Department of Homeland Security has unveiled a proposed rule that could fundamentally reshape the economics of H-1B worker sponsorship in the United States.
DHS is proposing to establish a $103,265 fee for all H-1B cap-subject petitions, including those eligible for the advanced degree exemption.
The new standalone charge would be codified at 8 CFR 106.2(a)(3)(xii) and is more than one hundred times the current base filing fee for an H-1B petition — making it the single largest fee ever imposed on an immigration benefit request in the history of the agency.
What the Proposed Rule Does
Published in the Federal Register on August 25, 2026, the proposed fee would be payable at the time of filing and would be imposed in addition to all other applicable fees or payments.
The fee applies to petitions filed under the regular 65,000 cap and to those filed under the 20,000 advanced degree exemption at INA 214(g)(5)(C).
Critically, not all H-1B employers would be affected equally.
The fee would not apply to cap-exempt petitions — those filed by universities, nonprofit research organizations, and government research organizations — or to petitions to extend or amend existing H-1B status or to change an existing H-1B to a different employer.
Universities, related nonprofit entities, nonprofit research organizations, and governmental research organizations would be untouched. DHS explains this choice by analogy to the treatment of nonprofits and educational institutions under the Asylum Program Fee.
The proposed fee would generate revenue to recover a portion of the federal government's costs for administering the lawful immigration system, including adjudication of immigration benefits, fraud detection and national security vetting, systems modernization, records and fee collection operations, immigration court operations, consular visa processing, labor standards enforcement, and interagency coordination.
DHS says the government spends about $8.8 billion a year on immigration-related costs. Divide that by the 85,000 H-1B visas available each year, and that comes out to roughly $103,265 — the proposed price tag.
The $100,000 Fee Saga: A Second Attempt
The proposal represents the Trump administration's second effort to impose a six-figure cost on H-1B employers.
On September 19, 2025, President Donald Trump issued Proclamation 10973 which imposed a $100,000 fee for new H-1B petitions filed for beneficiaries located outside of the United States.
That earlier fee was short-lived.
On June 8, 2026, the U.S. District Court for the District of Massachusetts granted summary judgment in favor of the plaintiff states, concluding that the $100,000 fee proclamation was not an immigration restriction, but rather a tax, which the president lacked authority to impose.
The ruling was issued by Judge Leo T. Sorokin.
The litigation continued to evolve rapidly.
On July 24, 2026, the U.S. Court of Appeals for the First Circuit denied the government's motion to put its $100,000 H-1B fee in effect while the challenge against it remains pending.
The First Circuit's order included a statement that the government did not show it was likely to succeed on appeal of the case.
The new $103,265 proposal takes a different route — rather than attempting to impose the charge through a presidential proclamation, DHS is proceeding through formal notice-and-comment rulemaking.
Immigration attorney Elizabeth Ricci told Fortune this approach gives the $103,265 fee policy "a better chance of surviving the litigation everyone expects."
Impact on Employers and Small Businesses
The proposed rule's own economic analysis paints a stark picture of the burden it would impose.
During fiscal year 2025, 28,649 different employers filed initial cap-subject H-1B petitions. Of those, DHS identified 14,541 as small entities. According to the economic analysis accompanying the proposal, the new fee would have a significant economic impact on 11,051 of those small entities, or 76% of them. For those businesses, the $103,265 charge would amount to more than 1% of annual revenue.
If enacted, the fee would dramatically change the economics of a visa program that is widely used by tech companies, consulting firms, and startups. It also runs the risk of potentially giving the largest companies another advantage over smaller competitors.
A $103,265 additional charge changes the economics dramatically. For a large technology company hiring hundreds of specialized workers, the cost could run into millions of dollars. For a startup, smaller technology company, hospital, or other employer with a limited recruitment budget, the decision to sponsor an H-1B worker could become considerably harder.
Perhaps most alarming to immigration attorneys is a provision buried in the proposed rule's preamble.
DHS explicitly acknowledges that if the First Circuit reverses the Massachusetts ruling and reinstates the $100,000 proclamation payment, employers could be required to pay both simultaneously — meaning more than $203,000 in government fees alone to sponsor a single H-1B worker before attorney fees, Labor Condition Application costs, or any other filing expenses.
Impact on Foreign Workers and International Students
While the fee is formally paid by the employer, foreign professionals stand to be significantly affected.
International graduates using F-1 OPT or STEM OPT often depend on an H-1B transition to keep working in the United States long term.
If employers reduce sponsorship due to the astronomical fee, these workers could face fewer pathways to continued employment in the U.S.
Unlike the prior $100,000 fee that was tied up in court, this new fee would apply to all cap-subject petitions, regardless of whether the petition requests a change of status or consular processing — including all new entries in the H-1B lottery, such as F-1 students.
If finalized as proposed, the fee could substantially increase the cost of sponsoring first-time, cap-subject H-1B workers and may alter H-1B sponsorship decisions, workforce planning, and international student hiring.
What Happens Next
US employers do not currently have to pay this new $103,265 fee. The measure is a Notice of Proposed Rulemaking, not a final rule. A public comment period will remain open through September 24, 2026, allowing businesses, organizations, and individuals to submit feedback.
This proposed rule does not immediately change current H-1B fees. Before this could go into effect, DHS would have to accept and respond to public comments, amend the proposed rule, clear White House review, and publish a final rule with an effective date.
Comments must be filed through regulations.gov under DHS Docket No. USCIS-2026-0298. Emails and letters to DHS officials do not count as comments. USCIS is not accepting mailed comments or digital media.
A 30-day window on an economically significant rule with an $8.8 billion annual price tag is aggressive — Executive Order 12866 contemplates 60 days as the norm for significant rules.
That compressed timeline is itself a procedural issue that could be raised in public comments and future litigation.
If the rule is finalized, the fee could apply to H-1B cap-selected petitions as early as April 1, 2027, unless litigation blocks its implementation. Given the recent vacatur of a similar $100,000 H-1B payment as an unlawful tax, the proposed fee is likely to face significant legal challenges.
What Employers and Workers Should Do Now
- Do not pay the proposed fee.
- Submit public comments. The September 24, 2026 deadline is fast approaching, and this is the primary mechanism for stakeholders to influence the final rule.
- Assess FY 2028 plans.
- Consult immigration counsel. Given the rapidly evolving landscape — with the $100,000 fee appeal still pending, the new $103,265 proposal in play, and the proclamation expiring September 21, 2026 — employers need tailored legal guidance.
ClinchLaw will continue monitoring this proposed rule and related litigation. Contact our office for questions about how these developments may affect your specific immigration situation.