On August 25, 2026, the Department of Homeland Security published a proposed rule in the Federal Register that sent shockwaves through the immigration and business communities.
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, which 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.
What the Rule Would Do
DHS would charge $103,265 per H-1B cap-subject petition. The fee applies to petitions filed under the regular 65,000 cap and to those filed under the 20,000 advanced degree exemption.
This is not an adjustment to the existing H-1B filing fee. It is a new, standalone charge that would be codified at 8 CFR 106.2(a)(3)(xii), and it is more than one hundred times the current base filing fee for an H-1B petition.
The fee would come on top of existing H-1B filing costs, anti-fraud fees, asylum program fees, ACWIA fees, registration fees, premium processing fees (if applicable), and other immigration-related expenses.
Critically,
it does not apply to cap-exempt petitions, extensions, amendments, transfers for beneficiaries already counted against the cap, or any other I-129 classification.
Universities, related nonprofit entities, nonprofit research organizations, and governmental research organizations would be untouched.
Revenue and Cost Recovery
This 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 U.S. Department of Justice (DOJ), the U.S. Department of State (DOS), and the U.S. Department of Labor (DOL).
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.
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).
A Second Attempt After Court Defeat
This proposal does not exist in a vacuum.
The Trump administration is taking a second — and substantially different — approach to imposing a six-figure cost on employers seeking H-1B workers.
A federal district court in Massachusetts vacated the earlier $100,000 fee on June 8, 2026, finding that it worked as a tax that the president lacked authority to impose and that it skipped required rulemaking steps.
On July 24, 2026, the First Circuit Court of Appeals declined to pause that ruling, so the $100,000 fee is not being collected while the appeal continues.
Rather than attempting to impose the charge through a presidential proclamation, DHS is proceeding through formal notice-and-comment rulemaking.
The new fee would apply to all cap-subject petitions, regardless of whether the petition requests a change of status or consular processing.
The Rulemaking Timeline
The proposed rule has not been approved and is not currently effective. Employers are not required to pay this fee for any current USCIS petitions or pending filings.
Written comments must be submitted on or before September 24, 2026.
After reviewing comments, DHS will decide whether to finalize, revise, or withdraw the rule.
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.
Impact on Small Businesses and Employers
DHS concedes a significant impact on small employers. Its own analysis estimates the rule would have a significant economic impact on 11,051 small entities (76% of the small entities that filed cap-subject petitions in FY 2025) and identifies no alternative that would reduce that burden.
For employers, the math is stark. An employer sponsoring even a single new H-1B worker would face more than $100,000 in additional costs before factoring in legal fees, existing government fees, and the salary itself. Companies that file dozens or hundreds of cap-subject petitions annually — common in the technology, consulting, and healthcare industries — could face costs in the tens of millions of dollars.
Impact on International Students and Workers
The Presidents' Alliance on Higher Education and Immigration issued a pointed warning.
They stated that "by making it prohibitively expensive for many employers to hire international graduates, this proposal would undermine one of America's greatest competitive advantages."
They noted that international students do not choose where to study based on the classroom experience alone — they also consider whether they will have a meaningful opportunity to apply their education after graduation. They argued the proposed rule would severely weaken the education-to-workforce pipeline and make the United States a far less attractive destination for the world's most talented students.
Legal Challenges Ahead
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.
Immigration attorney Greg Siskind of Manifest Law noted that courts will need to evaluate multiple constitutional and administrative law questions.
As he explained, "Courts will have to decide whether a proposed fee this size is arbitrary and capricious, disconnected from the actual cost of adjudicating a petition, and whether DHS even has the statutory authority to set an immigration fee at this scale."
Legal experts contend the fee remains a broad tax, likely exceeding DHS authority. A preliminary analysis by the National Foundation for American Policy highlights flawed assumptions by DHS and suggests the prohibitive cost will significantly reduce applications.
What Employers and Workers Should Do Now
Employers should not change current H-1B filing plans based solely on the proposal. However, they should begin assessing the potential financial and workforce consequences, preserve data showing how the proposed fee would affect hiring and retention decisions, and consider whether to participate in the public-comment process.
Judicial review of a fee rule is record-bound. Arguments not raised in comments are frequently treated as forfeited.
This means that employers, trade associations, and advocacy organizations that wish to challenge this rule in court will want to build a robust record during the comment period.
The comment period closes September 24, 2026, and comments may be submitted through Regulations.gov under DHS Docket No. USCIS-2026-0298.
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ClinchLaw will continue to monitor this proposed rulemaking and provide updates as the comment period progresses, any final rule is published, or litigation is filed. Employers with questions about the potential impact on their workforce planning should consult with an experienced immigration attorney.