On August 25, 2026, the U.S. Department of Homeland Security dropped what many immigration attorneys are calling the most consequential fee proposal in the history of the H-1B program.
DHS published a proposed rule to establish a $103,265 fee for all cap-subject H-1B petitions, including bachelor's cap and advanced-degree quota cases.
The proposed $103,265 H-1B cap fee represents one of the most consequential immigration-related fee proposals in recent memory.
If finalized, the rule would fundamentally alter the economics of hiring foreign talent in the United States — and it comes just weeks after federal courts struck down the administration's prior attempt to impose a six-figure H-1B surcharge.
What the Proposed Rule Would Do
The new fee 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.
DHS is proposing a $103,265 fee for every new fiscal year 2028 H-1B cap-subject petition on top of all existing fees. The fee would apply to all cap-subject employers, regardless of size.
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.
The fee would not apply to cap-exempt petitions (i.e., those filed by universities, nonprofit research organizations, and government research organizations) or to petitions to extend or amend existing H-1B status or to change an existing H-1B to a different employer.
An important distinction:
an employer would not pay $103,265 simply to register a worker for the annual H-1B selection process.
The fee would become relevant only after the worker is selected and the employer decides to file the actual H-1B petition with U.S. Citizenship and Immigration Services (USCIS).
The Math Behind $103,265
DHS was unusually transparent about how it arrived at the proposed amount.
DHS identified total costs to be recovered of $8,777,488,035, divided that figure by an assumed annual volume of 85,000 cap-subject petitions, and arrived at $103,264.57, which it rounded to the nearest $5 increment.
In its NPRM, DHS states that the purpose of this proposed rule is to generate revenue "to recover costs associated with administering the lawful immigration system as a whole."
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.
Critics have noted the breadth of this cost-recovery rationale.
A $103,265 charge on every new H-1B petition would put the U.S. out of reach for talent it trained, while sending billions to agencies with no role in the program,
according to immigration policy group FWD.us.
A Familiar Playbook: From the $100,000 Fee to $103,265
The proposed rule is best understood against the backdrop of the administration's earlier — and ultimately unsuccessful — attempt to impose a similar surcharge by executive action.
On September 19, 2025, President Trump issued Presidential Proclamation 10973, "Restriction on Entry of Certain Nonimmigrant Workers." The Proclamation required that consular processed H-1B petitions be accompanied by an additional $100,000 payment.
That proclamation prompted multiple lawsuits.
On June 8, 2026, Judge Leo Sorokin of the U.S. District Court for the District of Massachusetts granted summary judgment to the plaintiffs and vacated the fee in its entirety.
The court held that the $100,000 H-1B payment requirement is an unconstitutional tax imposed without proper congressional delegation to the President.
The government appealed, but
on July 24, 2026, the U.S. Court of Appeals for the First Circuit officially denied the federal government's emergency motion to stay the vacatur order pending appeal.
The Department of Homeland Security has formally confirmed that it will comply with the court's order while it considers its next steps.
By pursuing the new $103,265 fee through the formal notice-and-comment rulemaking process rather than a presidential proclamation, DHS appears to be attempting to shore up the legal foundation that courts found lacking in the first approach.
USCIS maintains that the Immigration and Nationality Act authorizes it to set "fees for providing adjudication and naturalization services … at a level that will ensure recovery of the full costs of providing all such services."
Economic Impact: Small Businesses on the Front Lines
DHS's own regulatory analysis paints a challenging picture for small employers.
During fiscal year 2025, 28,649 different employers filed initial cap-subject H-1B petitions. Of those, DHS identified 14,541 as small entities. According to the economic analysis accompanying the proposal, the new fee would have a significant economic impact on 11,051 of those small entities, or 76% of them. For those businesses, the $103,265 charge would amount to more than 1% of annual revenue, the threshold used by DHS to identify a significant economic impact.
For a large technology company hiring hundreds of specialised workers, the cost could run into millions of dollars. For a startup, smaller technology company, hospital or other employer with a limited recruitment budget, the decision to sponsor an H-1B worker could become considerably harder.
The real-world data from the $100,000 proclamation fee underscores these concerns.
DHS's own analysis on the impact of the $100,000 charge for consular-processed H-1Bs found that it led to a "short-term shock decline of more than 90% in consular H-1B receipts." Court filings showed that only 70 companies had paid the fee.
What This Means for H-1B Workers and Applicants
While the proposed fee is formally an employer obligation, the practical consequences would ripple directly to foreign workers.
That could lead employers to reconsider whether to sponsor an overseas candidate, hire someone who already has work authorisation, shift certain roles outside the US or increase salaries to compensate for the scarcity of sponsorship opportunities.
The impact may be particularly significant for employers that rely heavily on annual H-1B cap filings to fill specialized technical, engineering, healthcare, financial, and professional services roles. For some positions, the proposed fee could significantly exceed traditional recruiting and relocation costs, prompting employers to reevaluate the economics of sponsorship for entry-level talent.
International students on OPT or STEM OPT should closely monitor this proposal but should not make premature career or filing decisions.
The proposal does not change OPT or STEM OPT today, and it is not a final rule.
Timeline and Next Steps
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.
DHS published it on August 25, 2026, with a thirty-day window for public comments closing on September 24, 2026.
DHS must review and consider public feedback before issuing a Final Rule.
If this rule goes into effect, it would impact all cap-subject H-1B petitions filed as of Fiscal Year 2028 (i.e., the spring 2027 H-1B lottery process for an October 1, 2027 start date).
Significant legal challenges to the rule are anticipated.
What Employers and Workers Should Do Now
Immigration law firms across the country are urging proactive steps:
- Submit public comments through regulations.gov before September 24, 2026.
- Continue filing under current rules.
- Evaluate workforce planning.
- Stay in close contact with immigration counsel. The regulatory landscape is shifting rapidly, with additional proposed rules on OPT fees and H-1B program reform also advancing through the regulatory pipeline.
This article is for informational purposes only and does not constitute legal advice. For guidance specific to your situation, consult a qualified immigration attorney. ClinchLaw monitors all regulatory developments affecting immigration to the United States.