The legal rollercoaster surrounding the controversial $100,000 H-1B fee has taken another significant turn — this time, in favor of employers and foreign workers.
On July 24, 2026, the U.S. Court of Appeals for the First Circuit denied the government's motion to stay the district court judgment that vacated the policy implementing the $100,000 H-1B fee.
The administrative stay that reinstated the fee on June 12 is therefore lifted, and the vacatur stands while the government's appeal proceeds.
The ruling means that, for now,
employers do not have to pay the additional $100,000 H-1B payment because the district court vacated the policy and the First Circuit refused to restore it during the government's appeal.
But the reprieve may be short-lived — and employers face a new set of strategic questions as the clock ticks toward September 20.
The Road to Vacatur
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.
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 fee became effective September 21, 2025, and applied to new H-1B petitions for beneficiaries subject to consular processing.
The fee does not reach extensions, transfers from another U.S. employer, or workers who obtain H-1B status through a change of status inside the country, which is the route most F-1 students take.
The fee was immediately challenged in multiple federal courts.
On December 12, 2025, a coalition of state attorneys general filed a lawsuit in the U.S. District Court for the District of Massachusetts challenging the fee.
Plaintiffs argued that the payment requirement exceeded the president's authority, intruded on Congress's exclusive power to tax, and that agency implementation violated the APA.
On June 8, 2026, Judge Leo Sorokin vacated the $100,000 H-1B fee, ruling it an unlawful tax.
The court determined that the $100,000 requirement functioned as a tax rather than a fee or penalty, explaining that it is not "punishment for an unlawful act or omission" because hiring H-1B workers remains lawful.
What followed was a rapid sequence of procedural maneuvers.
On June 11, 2026, the Trump administration filed a notice of appeal, and on June 12, 2026, asked the district court to stay its decision.
Judge Sorokin temporarily stayed the court's decision, reinstating USCIS's authority to collect the fee for H-1B petitions that had been subject to the fee.
The First Circuit Says No
On July 24, 2026, the First Circuit denied the government's stay request, finding that the government had not shown it was likely to succeed on appeal or that the states would avoid substantial harm if the fee were allowed to resume.
The court stated simply: "We deny the motion."
This was an interim decision regarding the government's request for a stay. The court has not yet issued a final ruling on the complete merits of the appeal.
This is an interim victory, not necessarily the final conclusion of the litigation.
USCIS has not yet issued revised guidance or H-1B filing instructions reflecting the First Circuit's decision. The agency's published instructions and filing systems may not be updated immediately.
The September Expiration: A Critical Variable
Perhaps the most consequential dimension of this dispute is no longer what the courts will do — but what the White House will do next.
By its terms, Proclamation 10973 imposes a temporary 12-month restriction that will expire on September 20, 2026, unless extended.
With approximately six weeks remaining, the practical question for many employers is becoming more immediate: what exposure exists during the remaining period, and will the Administration extend, renew, or reissue the Proclamation?
What the courts set aside is the agency policy implementing the Proclamation, which is the only thing the states asked to have vacated and the only thing the APA reaches. The judgment does not declare the Proclamation void, and no injunction was entered against giving effect to it.
The First Circuit ruled based on a lack of legal authority rather than on a procedural mistake, so a renewed implementation would need a different statutory footing. That is a meaningful constraint, but it is not the same as the Proclamation being off the table.
The merits appeal remains pending before the First Circuit, and the government may seek a stay from the Supreme Court.
Parallel challenges to the fee are also pending in the Northern District of California and before the U.S. Court of Appeals for the D.C. Circuit, where plaintiffs have notified judges of the Massachusetts ruling. Decisions in those cases could further shift the landscape in either direction.
Impact on Employers, Workers, and Industries
The stakes for U.S. employers and the foreign professionals they sponsor have been enormous throughout this saga.
As of February 2026, the government had received only 85 payments of the $100,000 fee across all industries.
For employers and other essential service providers operating on limited budgets, the fee effectively priced them out of sponsoring new H-1B visas.
In the technology sector, larger firms with considerable financial means are more capable of absorbing the cost; however, even these companies are becoming increasingly selective regarding their sponsorship choices.
Concurrently, many of these firms are increasing their dependence on offshore teams and remote work setups, effectively relocating talent instead of bringing it into the United States.
Sectors like healthcare and education — especially in rural and underserved regions — encounter even more acute challenges.
Industry groups warn that the fee could inadvertently escalate skills shortages in critical sectors like healthcare, engineering, and information technology.
The situation disproportionately impacts international students in the United States, many of whom depend on the H-1B lottery as a means to transition from F-1 status to long-term employment. Since entry-level positions frequently do not offer salaries sufficient to justify the fee, employers are less willing to sponsor these candidates, resulting in a potential loss of talent educated in the U.S.
What Employers Should Do Now
With the fee currently unenforceable but the legal landscape still in flux, immigration practitioners are urging a careful, proactive approach.
Employers who paid the $100,000 H-1B fee should retain complete payment records and speak with counsel about whether to pursue recovery.
The June 8 judgment vacated the implementing policy but did not address refund mechanics. In the tariff litigation following the Supreme Court's Learning Resources decision, the Administration declined to issue refunds until ordered to.
As a practical matter, the First Circuit's denial of the stay means the $100,000 fee is not currently enforceable for new H-1B petitions that would otherwise require consular processing.
However, employers should remain vigilant.
As remaining lawsuits challenging the proclamation continue, the rules surrounding the fee are subject to change. The ultimate outcome will likely be decided in the U.S. Supreme Court.
The $100,000 H-1B fee has been in force, vacated, reinstated, and vacated again since September 2025, and the Proclamation's expiration date adds a second variable to an already unsettled picture. Klasko Immigration Law Partners is monitoring the appeal, any emergency application to the Supreme Court, and whether the Administration acts before September 20, 2026.
Looking Ahead
The next six weeks will be pivotal. Employers and immigration counsel are watching for three possible developments: a government petition to the Supreme Court for an emergency stay, a decision on whether the Administration will extend or reissue Proclamation 10973 before its September 20 expiration, and the progression of parallel lawsuits in other circuits that could create a circuit split — the typical precursor to Supreme Court review.
For H-1B workers and the companies that rely on them, the current moment offers breathing room but not certainty. As always, affected employers should consult with experienced immigration counsel to navigate filing strategies in this volatile regulatory environment.
This article is for informational purposes only and does not constitute legal advice. Readers should consult a qualified immigration attorney for guidance specific to their situation.