The Department of Homeland Security has taken another major swing at imposing six-figure costs on H-1B sponsorship — and this time, the administration is attempting to do it through formal rulemaking.
On August 25, 2026, DHS published a proposed rule to establish a $103,265 fee for all cap-subject H-1B petitions, including bachelor's cap and advanced-degree quota cases.
Under the proposed regulation, employers filing an H-1B cap-subject petition would be required to pay the new fee at the time of filing, in addition to all other applicable government filing fees.
The new charge is more than one hundred times the current base filing fee for an H-1B petition. If finalized as written, it would be the single largest fee ever imposed on an immigration benefit request in the history of the agency.
What the Rule Covers — and What It Doesn't
The fee applies to petitions filed under the regular 65,000 cap and to those filed under the 20,000 advanced degree exemption. It does not apply to cap-exempt petitions, extensions, amendments, or transfers for beneficiaries already counted against the cap.
Universities, related nonprofit entities, nonprofit research organizations, and governmental research organizations would be untouched.
Unlike the $100,000 payment required by Presidential Proclamation 10973 (currently vacated by the courts), this fee applies to people already in the United States, including those on student visas.
The fee is in addition to everything else: the base I-129 fee, the ACWIA fee, the fraud prevention and detection fee, the Asylum Program Fee, the H.R.1 fees codified in the April 2026 interim final rule, and premium processing if elected.
The $8.8 Billion Interagency Cost-Recovery Model
The most legally significant — and unprecedented — aspect of this proposed rule is its funding structure.
Historically, USCIS fee rules generally recovered only USCIS's costs. The proposal would adopt a novel interagency cost-recovery approach, using the fee to recover approximately $8.78 billion in identified costs across six federal agencies, including USCIS, the U.S. Department of Labor, U.S. Immigration and Customs Enforcement, the U.S. Department of State, and others. Divided among 85,000 projected cap-subject petitions, those costs equal approximately $103,265 per petition.
DHS proposes allocating the projected $8.8 billion as follows: USCIS 34.2% ($3.0 billion), EOIR 33.7% ($2.96 billion), DOL 13.8% ($1.21 billion), ICE 11.9% ($1.05 billion), DOS 5.5% ($484 million), and CBP 0.9% ($76.2 million).
EOIR would receive nearly $3 billion, including funding for 8,400 new positions built around immigration judge teams, plus court space, guard costs, interpretation, transcription, and FOIA support. These are removal proceedings, not benefit adjudications.
That distinction is likely to be a centerpiece of coming legal challenges.
Legal Background: The $100,000 Predecessor
This proposed rule does not exist in a vacuum. It arrives just months after the administration's earlier attempt to impose a six-figure H-1B fee was blocked in court.
On September 19, 2025, President Trump issued Proclamation 10973, which imposed a $100,000 fee on new H-1B petitions filed for beneficiaries located outside of 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. The fee became effective September 21, 2025, and applied to new H-1B petitions for beneficiaries subject to consular processing.
On June 8, 2026, the U.S. District Court for the District of Massachusetts invalidated the fee, concluding that the fee functioned as a tax rather than a regulatory filing fee, the executive branch lacked authority to impose such a tax without congressional approval, and the implementing agencies exceeded their authority and violated the Administrative Procedure Act.
On June 11, 2026, the administration filed an appeal of the district court's decision.
The administration's appeal to the U.S. Court of Appeals for the First Circuit remains pending.
This time, DHS is using its fee-setting authority and moving through the traditional notice-and-comment rulemaking process
, a shift that some legal observers believe gives it a stronger procedural footing — though the substantive legal questions remain formidable.
Devastating Impact on Small Businesses
DHS's own analysis paints a bleak picture for smaller employers.
DHS estimates that the rule would have a significant economic impact on 11,051 small entities, representing 76% of the small entities in its analysis that filed cap-subject petitions in fiscal year 2025.
Small and mid-sized companies that sponsor even a handful of H-1B workers a year could feel this fast. A firm sponsoring five workers, for example, would be looking at over $500,000 in this fee alone, before wages, legal costs, or anything else.
Over 10 years, the rule would cost employers $74.9 billion.
Critics have pointed to an internal contradiction in DHS's economic projections.
DHS cites research showing cap-subject filings fall below 85,000 once a fee passes $100,000. Both positions cannot hold at once. A fee that prices out three quarters of small filers will move volume, and the revenue forecast assumes volume does not move.
Impact on Workers and International Students
While the fee is technically an employer-side obligation, its effects would ripple through the entire H-1B ecosystem.
For H-1B workers and prospective applicants — particularly international students on F-1 visas hoping to transition to employment — the implications are profound. Critics say such a large upfront cost could discourage employers from retaining foreign graduates educated in the United States and make the country less competitive in attracting global talent.
The U.S. Chamber of Commerce has already spoken out.
The new fee proposal "will make it cost-prohibitive for even more U.S. employers — especially the thousands of start-ups and small and midsize businesses who rely on H-1Bs — to utilize the program," said Neil Bradley, executive vice president and chief policy officer at the Chamber.
Anticipated Legal Challenges
Significant legal challenges to the rule are anticipated.
Legal experts have identified several vulnerabilities:
- Fee vs. Tax:
- Interagency funding concerns:
- Congressional intent:
What Employers and Workers Should Do Now
The proposed rule is not yet in effect. DHS published it on August 25, 2026, with a thirty-day window for public comments closing on September 24, 2026.
The 30-day window is short. Comments that include concrete economic data on how the fee would affect hiring, budgets, and competitive positioning carry the most weight in the rulemaking process.
Commenters should also note that 30 days is not enough time to review the potential impacts of the rule and prepare a substantive comment. There is no explanation in the rule for why the standard 60-day period was not provided.
Immigration attorneys are advising employers to take immediate steps: submit detailed public comments through the Federal eRulemaking Portal under DHS Docket No. USCIS-2026-0298; model FY 2028 budget scenarios under both outcomes; and identify which roles would still warrant sponsorship at the proposed fee level.
The proposed $103,265 H-1B cap fee represents one of the most consequential immigration-related fee proposals in recent memory. Whether DHS ultimately finalizes the rule, modifies it substantially, or faces successful legal challenges remains to be seen.
The deadline for public comments is September 24, 2026. Employers, workers, and stakeholders who wish to weigh in should act now.