The Department of Homeland Security has taken aim at the economics of H-1B sponsorship with a proposed rule that, if finalized, would fundamentally alter how U.S. employers recruit foreign talent.
What DHS Is Proposing
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.
The fee is more than one hundred times the current base filing fee for an H-1B petition and, if finalized as written, would be the single largest fee ever imposed on an immigration benefit request in the history of the agency.
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.
Universities, related nonprofit entities, nonprofit research organizations, and governmental research organizations would be untouched.
Unlike the prior $100,000 proclamation fee, which applied only to H-1B workers seeking consular processing abroad,
the new proposal would apply broadly to cap-subject H-1B petitions regardless of where the worker is located.
It would apply whether the worker is outside the U.S. and entering on a new visa, or already here—say, an F-1 student changing status to H-1B.
Where the $103,265 Figure Comes From
DHS identified $8,777,488,035 in costs that it believes H-1B employers should cover rather than taxpayers. Divide by 85,000 petitions, round $103,264.57 to the nearest five dollars, and there it is.
According to DHS, the proposed fee would generate revenue to recover a portion of the federal government's costs for administering the lawful immigration system. These costs include adjudication of immigration benefits, fraud detection and national security vetting, systems modernization, records and fee collection operations, immigration court operations, consular visa processing, labor standards enforcement, and interagency coordination.
This represents a significant departure from prior fee-setting practice.
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.
The Shadow of the $100,000 Proclamation Fee
The proposed rule arrives against the backdrop of ongoing litigation over a separate $100,000 H-1B fee.
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.
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 (APA).
However,
just days later, the same court paused implementation of its decision, temporarily allowing USCIS to continue requiring the fee while the government's appeal proceeds.
The administration's appeal to the U.S. Court of Appeals for the First Circuit remains pending.
Crucially,
because the two rest on different legal authority, they are theoretically independent and could stack, potentially exposing a single petition to both. A court striking down one would not affect the other.
The presidential proclamation establishing the $100,000 fee is set to expire on September 21, 2026, one year after its issuance, unless extended.
Impact on Employers and Workers
The potential impact of the proposed fee is staggering.
DHS itself estimated that the six-figure upcharge would force 11,051 small businesses—76% of the small entities it analyzed—to experience a "significant economic impact" as a result of the fee.
The fee stacks rather than replaces existing costs. The base I-129 fee, the ACWIA training fee, the fraud prevention and detection fee, the asylum program fee, and premium processing all still apply on top.
Currently,
total H-1B filing costs typically fall between $2,500 and $9,000 or more before any visa stamping or travel costs, depending on employer size and the level of attorney involvement.
The proposed rule would catapult those costs well into six figures.
Business groups argue that a six-figure charge could make H-1B sponsorship unaffordable for startups and smaller employers.
FWD.us, a prominent immigration advocacy organization, has characterized the proposed fee as a tax, not a fee, arguing that it "hands an advantage to every country competing with us for the same talent."
Critics also note that
the proposed rule does not address whether the fee would be returned if a petition is denied, rejected, or withdrawn
—a significant concern given that H-1B adjudications are never guaranteed.
For foreign workers—including international students on F-1 visas hoping to transition to H-1B status—the practical consequences are severe. Even though the fee is legally the employer's obligation,
highly skilled and trained workers, many of them educated in the U.S., would have no pathway to stay and would contribute their skills and training in other countries instead.
What Happens Next
The proposal is in the notice-and-comment stage, and DHS is accepting comments through September 24, 2026.
After reviewing comments, DHS will decide whether to finalize, revise, or withdraw the rule.
If the rule is finalized, the fee will apply to cap-subject petitions filed in 2027. Significant legal challenges to the rule are anticipated.
What Employers and Workers Should Do Now
Employers should not add the proposed fee to current filings unless and until a final rule establishes an effective date and applicable transition provisions.
In the meantime, experts recommend several steps:
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Consider submitting comments, either individually or through industry associations, particularly if the proposed fee could have a material impact on recruiting, workforce planning, budget forecasting, or business operations. Comments may be submitted through September 24, 2026.
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Evaluate anticipated H-1B hiring needs for upcoming fiscal years.
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Assess potential budgetary implications should the rule ultimately be implemented. Employers that regularly use the H-1B cap process should also stay in close contact with immigration counsel as DHS's proposal evolves.
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. Employers and individuals with questions about how the proposed rule may affect their specific situations should consult with qualified immigration counsel.