In a significant win for employers and foreign workers, the U.S. Court of Appeals for the First Circuit on July 24, 2026, denied the federal government's request to reinstate the controversial $100,000 H-1B visa fee while its appeal proceeds. The ruling means the fee — widely criticized as an unauthorized tax on employers — is not currently being collected, though the legal battle is far from over.
What Happened
On Friday, July 24, 2026, a three-judge panel for the First Circuit officially denied the government's emergency motion.
The appellate court determined that the government failed to make a strong showing that it was likely to succeed on the merits of its appeal regarding whether the agency acted in excess of its statutory authority.
The court emphasized that when the executive branch claims discretionary authority to impose monetary financial burdens on regulated parties, Congress must explicitly and clearly delegate that authority.
Because the Immigration and Nationality Act does not expressly grant this fee-imposing power under the statutes relied upon by the administration, the First Circuit declined to keep the $100,000 fee in place while the appeal proceeds.
Because the First Circuit denied the government's request, the district court's original order vacating the policy is reinstated nationwide.
The Road to This Ruling
On September 19, 2025, President Trump issued a sweeping Presidential Proclamation imposing a $100,000 fee on new H-1B visa petitions, sparking immediate concern and confusion among employers and H-1B workers.
The federal agencies subsequently issued guidance clarifying that the new, one-time fee applies only to new H-1B petitions filed on or after September 21, 2025, that are approved for consular processing.
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 — California et al. v. Trump et al. On June 8, 2026, Judge Leo Sorokin vacated the $100,000 H-1B fee, ruling it an unlawful tax.
The court concluded that the fee effectively constitutes a tax for which a presidential proclamation and agency implementation are not a proper exercise of authority. The court further held that the policy exceeded statutory authority, was procedurally deficient, and was arbitrary and capricious, rendering it unlawful under the Administrative Procedure Act.
In its June 8 decision, the court referenced the recent SCOTUS ruling striking down the President's tariffs, stating that the president does not have unilateral authority to impose taxes without congressional approval.
What followed was a whirlwind of procedural maneuvering.
On June 12, 2026, Judge Leo Sorokin issued an administrative stay of his own June 8 ruling, effectively reinstating the $100,000 fee while the Trump Administration sought emergency relief from the First Circuit.
On June 18, 2026, the government timely filed an emergency request asking the First Circuit to pause the lower court's ruling while the appeal moves forward.
With the First Circuit's July 24 denial of the stay,
the administrative pause on the vacatur dissolved, and the June 8th vacatur is back in force.
Why It Matters: Impact on Employers and Workers
The $100,000 fee represented an extraordinary financial barrier for employers sponsoring H-1B workers located outside the United States.
The proclamation significantly increased the cost of H-1B petitions, which, prior to the change, typically totaled between $960 and $7,595 in regulatory and statutory fees.
While the fee was in effect, its consequences rippled across multiple sectors.
Some hospitals, universities, and schools were affected by the fee, limiting their ability to hire foreign national teachers, researchers, and medical staff, the plaintiffs argued.
Because K-12 schools, colleges, and universities are generally government or non-profit entities, they are incapable of absorbing an additional $100,000 for each H-1B hire.
The healthcare sector was particularly hard-hit.
The imposition of a $100,000 fee for each new H-1B petition dramatically impacted the ability of healthcare facilities to hire foreign-trained professionals.
Adding $100,000 per new H-1B petition could make routine hiring of international medical graduates cost-prohibitive for many healthcare employers.
That said, the practical scope of the fee was more limited than many initially feared.
The $100,000 fee requirement primarily applied to new H-1B petitions filed on behalf of applicants who are outside the U.S. — a group that makes up a very small percentage of those who file for the visas.
Because the fee does not apply to most petitions, very few employers paid it. According to a March filing from USCIS, the agency received 85 payments.
What Employers Should Do Now
As of July 24, 2026, 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 stay that decision while the government's appeal is pending.
Employers should proceed under the currently effective filing requirements, verify the latest USCIS and Department of State instructions, and avoid paying the additional $100,000 unless the law or official guidance changes.
For employers who already paid the fee, the path forward is less clear.
No refund process has been announced. Employers who paid while the fee was enforceable may have refund options if the ruling ultimately stands, but the court did not decide that question.
The court order itself does not establish a refund process. Employers who previously paid the amount should preserve proof of payment and wait for formal agency guidance or consider legal advice regarding recovery.
What Comes Next
This is not the final chapter.
This is a ruling on the stay motion only. The court did not decide the ultimate merits of the appeal and did not definitively hold the payment to be an unconstitutional "tax."
The government may seek emergency relief from the Supreme Court, the appeal continues on the merits, and at least one other court has upheld the payment.
Notably,
the December 2025 ruling upholding the proclamation in Chamber of Commerce reached the opposite conclusion, which may set the stage for further appellate review.
The fee could return if a higher court grants a stay, if the government ultimately wins the appeal, or if Congress passes legislation authorizing such a payment.
Additionally,
the proclamation carries its own expiry date: under its terms the restriction lapses 12 months after September 21, 2025 — around September 21, 2026 — unless it is extended or replaced by a formal regulation.
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.
The Bottom Line
For now, the $100,000 H-1B fee is off the table. Employers filing covered H-1B petitions should proceed without the supplemental payment, but they should do so with full awareness that this reprieve may be temporary. The government's appeal remains live, multiple parallel cases are unfolding across the federal courts, and Supreme Court review is a real possibility.
Employers with pending or planned H-1B filings involving consular processing should work closely with immigration counsel to navigate this fluid legal landscape, preserve documentation of any prior payments, and stay alert for rapid developments that could once again alter their compliance obligations.
This article is for informational purposes only and does not constitute legal advice. For guidance on specific immigration matters, please consult a qualified immigration attorney.