On August 25, 2026, the Department of Homeland Security published a proposed rule in the Federal Register that would fundamentally reshape the economics of H-1B 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 proposed fee would be paid at the time of filing and would be imposed in addition to all other applicable fees or payments.
If finalized as written, it would be the single largest fee ever imposed on an immigration benefit request in the history of the agency.
How DHS Calculated the Fee
The proposed fee is not based on the cost of adjudicating an individual H-1B petition.
The agency estimates that the federal government incurs about $8.78 billion a year in costs associated with administering the lawful immigration system, and it divided that amount by an assumed 85,000 cap-subject H-1B petitions annually, producing approximately $103,265 per petition.
DHS rounds the fee to the nearest $5 increment consistent with how it has in other IEFA fee rules.
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.
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).
In other words, the fee is not a measure of what it costs USCIS to adjudicate an H-1B petition — it is a revenue target divided by a headcount. This is the part of the rule that departs most sharply from prior practice.
What the Fee Covers — and What It Does Not
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, transfers for beneficiaries already counted against the cap, or any other I-129 classification.
This means that
universities, related nonprofit entities, nonprofit research organizations, and governmental research organizations would be untouched.
Critically,
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, premium processing if elected, and any payment required under Presidential Proclamation 10973 if that payment is ever reinstated.
DHS states expressly that an employer subject to both would pay both.
A Second Attempt After Court Defeat
The Trump administration is taking a second — and substantially different — approach to imposing a six-figure cost on employers seeking H-1B workers.
On June 8, 2026, a federal district court struck down the administration's previous $100,000 fee, concluding that the administration had exceeded its authority.
Rather than attempting to impose the charge through a presidential proclamation, DHS is proceeding through formal notice-and-comment rulemaking
— a process that carries greater procedural durability, though it is also subject to greater public scrutiny.
The fee would be separate from the prior $100,000 H-1B fee, which applied to certain petitions filed on or after September 21, 2025. The presidential proclamation establishing that fee is set to expire on September 21, 2026, one year after its issuance, unless extended.
Impact on Employers
The financial burden would fall squarely on employers.
The proposed $103,265 charge would be an additional employer-side filing cost, rather than a fee imposed directly on the foreign worker.
For a large employer, the fee could affect annual workforce budgets. For a startup or small business, one cap-subject H-1B petition could represent a cost equal to a major hiring expense, runway decision, or departmental budget item.
The agency estimates that approximately 76% of small entities filing H-1B cap petitions would experience a significant economic impact under the proposal.
Notably, the proposed rule does not address whether the fee would be returned if a petition is denied, rejected, or withdrawn.
The American Immigration Lawyers Association has responded forcefully. AILA President Jeff Joseph stated that
"this exorbitant fee to participate in the H-1B program would shut out employers that use H-1Bs to fill job openings for essential staff like teachers, researchers, rural doctors, and clergy."
Consequences for International Students and Foreign Workers
The proposal could have particular consequences for international students. F-1 students working pursuant to Optional Practical Training (OPT) frequently rely on the H-1B cap process as a pathway to longer-term employment authorization. A $103,265 petition fee could alter employers' willingness to sponsor those workers following selection in the H-1B cap.
The data underscores the magnitude:
USCIS data for FY23 show that 72 percent of approved H-1B petitions for initial employment that involved a change of status were for beneficiaries who previously held F-1 or F-2 status.
If employers become more selective about which roles justify six-figure sponsorship costs, the pipeline from American universities to U.S. employment could narrow significantly.
The new fee would also apply to individuals hired within the U.S., an expansion from the previous $100,000 proclamation which primarily targeted workers from outside the country.
Legal Vulnerabilities
Legal experts have already identified multiple potential lines of challenge.
Legal experts contend the fee remains a broad tax, likely exceeding DHS authority.
Congress has repeatedly and specifically legislated H-1B fee amounts: the ACWIA fee, the fraud prevention and detection fee, the 9-11 biometric fee, and most recently the fees in H.R.1. When Congress sets specific dollar figures for a program again and again, the natural inference is that it did not silently authorize the agency to impose a $103,265 charge on the same program through a general cost-recovery provision.
Routing roughly $5.7 billion in fee revenue to DOJ, DOS, and DOL raises Appropriations Clause and Miscellaneous Receipts Act concerns.
Court challenges to a final rule are likely.
What Happens Next
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.
DHS must then review the submissions, respond to significant comments, and decide whether to issue a final rule. Any final rule would specify its effective date.
Employers should not add the proposed fee to current filings unless and until a final rule establishes an effective date and applicable transition provisions.
What Employers and Workers Should Do Now
Employers that rely on the annual H-1B cap should begin evaluating the potential impact on workforce and immigration planning, particularly for anticipated FY 2028 cap cases.
Employers may also wish to consider submitting comments during the rulemaking period, especially where they can provide specific information concerning the economic impact of the proposed fee, effects on recruiting and retention,
and labor shortages in their industries.
Comments can be submitted through the Federal eRulemaking Portal at Regulations.gov
under DHS Docket No. USCIS-2026-0298.
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This article is for informational purposes only and does not constitute legal advice. For guidance on how this proposed rule may affect your specific situation, consult with a qualified immigration attorney.