Employment & Labor Insider

The U.S. Department of Homeland Security has proposed a new $103,265 fee for H-1B cap-subject petitions.

Here are seven things employers should know about the proposal, including who would be affected, how DHS calculated the fee, and why litigation is likely if the rule is finalized.

No. 1: The fee is not currently payable.

The proposal is still subject to public comments, which which must be submitted by September 24. Once the comment period closes, DHS must review the comments, publish a final rule, and establish an effective date before it can begin collecting the fee.

Employers should therefore continue filing H-1B petitions under the existing fee schedule. The proposal does not alter the fees for petitions filed before any final rule becomes effective.

Comments may be submitted here.

No. 2: The fee would apply to H-1B cap-subject petitions, including U.S. advanced-degree cases.

If finalized as written, the additional fee would apply when an employer files an H-1B cap-subject petition for a beneficiary selected under either the regular H-1B cap or the U.S. advanced-degree exemption.

The proposed regulatory text applies to “all H-1B cap-subject petitions.” It does not contain an exception for an F-1 student selected in the cap who requests a change of status in the United States. Accordingly, employers should not assume that cap-selected F-1 students will be exempt unless DHS revises or clarifies the rule.

The proposal would not apply to H-1B petitions that are exempt from the annual cap. Exempt petitions include extensions, amendments, and changes of employer filed for workers who have already been counted against the H-1B cap, as well as petitions for qualifying employment with cap-exempt universities, affiliated nonprofit entities, nonprofit research organizations, and governmental research organizations.

The beneficiary’s location does not determine whether the proposed fee applies.

No. 3: The $103,265 charge would be in addition to existing H-1B fees.

The proposed fee would be payable at the time of filing, and imposed in addition to the Form I-129 fee and any other applicable fees including those for American Competitiveness and Workforce Improvement Act of 1998, fraud prevention, asylum program, and premium processing.

The proposal is also legally separate from the $100,000 payment imposed in September 2025 through Presidential Proclamation 10973. That payment, which has been vacated but is on appeal, applied principally to certain H-1B beneficiaries outside the United States. In contrast, the proposed $103,265 fee is tied to whether the petition is cap-subject -- not to whether the beneficiary is inside or outside the United States.

DHS states that an employer could be required to pay both if they are simultaneously operative and applicable. However, DHS anticipates that the proclamation payment will expire before the proposed regulatory fee takes effect.

No. 4: The fee is designed to generate approximately $8.8 billion for the broader immigration system.

DHS did not calculate the proposed fee based on the cost of adjudicating an H-1B petition. Instead, DHS identified approximately $8.777 billion in annual immigration-related costs and divided that amount by an assumed annual volume of 85,000 cap-subject H-1B petitions. The resulting figure -- $103,264.57 -- was rounded up to $103,265.

The proposal would make one relatively narrow group -- employers filing cap-subject H-1B petitions -- responsible for a significant portion of the federal government’s broader immigration costs.

No. 5: “Ability-to-pay” rationale is likely to be controversial.

DHS acknowledges that it has never previously transferred the costs of one immigration program to another solely because it considered one group of applicants better able to afford the expense. DHS nevertheless proposes doing so here based on what it calls an “ability-to-pay principle.”

The proposal reasons that H-1B employers must have the resources to pay their workers and that the new fee would not be significant when compared with an employer’s wage obligation.

That is questionable. Wages are compensation paid in exchange for six years of professional services, not employer revenue available to pay government filing fees. The calculation also arguably overestimates the wage range of H-1B employees and minimizes the impact on startups, smaller employers, and other organizations.

No. 6: The proposal faces serious judicial-review questions.

The proposal attempts to correct some of the problems that were identified in the litigation over the $100,000 payment. These include proceeding through notice-and-comment rulemaking and reliance on a provision of the Immigration and Nationality Act that authorizes DHS to establish fees for immigration adjudication and naturalization services.

One legal question is whether that statutory authority extends as far as this proposal. Other potential challenges could include the whether the fee is actually a “tax,” and whether the DHS has adequately justified its approach as required by the Administrative Procedure Act.

If DHS finalizes the fee substantially as proposed, litigation seeking to block the fee before it takes effect is highly likely.

No. 7: Employers should monitor the proposal and consider submitting comments.

As already noted, no immediate filing or payment is required. However, employers consider how the proposal would affect future their future plans for recruitment and workforce planning.

Recommended steps include the following:

• Continue filing currently selected H-1B cap cases under the existing fee schedule.
• Identify business units and positions that regularly rely on the H-1B cap, and evaluate the practical consequences if some version of the fee is finalized.
• Distinguish genuinely cap-subject cases from extensions, amendments, changes of employer, and petitions filed by qualifying cap-exempt employers.
• Consider submitting comments by September 24 addressing DHS’s legal authority, cost allocation, economic assumptions, small-business impact, and the potential consequences for various industries.
• Monitor the final rule and anticipated litigation before making material changes to recruiting or immigration strategy.

Conclusion

The new fee is a proposal only. The proposal should be taken seriously, but the rulemaking process must be completed before the fee can take effect.

We will continue to monitor this issue. In the meantime, if you have any questions, please feel free to contact any member of Constangy’s Immigration Practice Group.