Key Takeaway
If adopted, the proposed $103,265-per-petition fee would represent a significant new cost for employers sponsoring cap-subject H-1B workers. Employers concerned about this additional cost should consider submitting a comment regarding the proposed fee. Public comments must be received by September 24, 2026, and must be submitted through regulations.gov under DHS Docket No. USCIS-2026-0298.
Overview
On August 25, 2026, U.S. Citizenship and Immigration Services (USCIS), a component of the Department of Homeland Security (DHS), published a Notice of Proposed Rulemaking (Proposed Rule) in the Federal Register that would impose a new fee of $103,265 on every H-1B petition that is subject to the annual statutory cap. The fee would apply to both the regular 65,000 cap and the 20,000 advanced degree (“master’s cap”) exemption. If finalized, the new $103,265 USCIS filing fee would be in addition to all existing USCIS filing fees – potentially bringing the total cost of a single cap-subject H-1B petition above $110,000.
DHS characterizes the fee as a cost-recovery measure under the section of the Immigration and Nationality Act that authorizes fees to recover the “full costs of providing adjudication and naturalization services.”
Separate from the $100,000 Presidential Proclamation Fee
Presidential Proclamation 10973 issued in September 2025 imposed a $100,000 fee on certain new H-1B petitions. The Presidential Proclamation $100,000 fee is a separate fee from the $103,265 fee in the new Proposed Rule.
Litigation remains pending regarding the $100,000 fee imposed by the September 2025 Presidential Proclamation. DHS acknowledges that the proposed $103,265 fee is close to the $100,000 Presidential Proclamation fee but distinguishes it on legal grounds, noting that the $103,265 proposed fee derives from DHS’s statutory fee-setting authority rather than from presidential proclamation power.
An injunction of the 2025 $100,000 Presidential Proclamation fee did not stop the Administration from extending the $100,000 Presidential Proclamation fee, which was initially due to sunset on September 21, 2026. On September 18, 2026, the White House announced it is extending the $100,000 Presidential Proclamation fee through September 21, 2027. Although the $100,000 Presidential Proclamation fee is presently enjoined; this extension signals an intention of the Administration to continue pursuing the $100,000 Presidential Proclamation fee.
Who Is Affected by the $103,265 Fee (and Who Is Exempt)
The proposed $103,265 fee applies exclusively to cap-subject H-1B petitions—that is, petitions filed for new H-1B employment that count against the 65,000 regular cap or the 20,000 advanced degree cap exemption. The following categories of H-1B petitions would not be subject to the new fee:
- Cap-exempt petitions: Petitions filed by or on behalf of institutions of higher education, nonprofit entities affiliated with such institutions, nonprofit research organizations, or governmental research organizations
- Extensions of stay: Petitions to extend an existing H-1B worker’s authorized period of stay
- Amendments: Petitions to change the terms or conditions of an existing H-1B employment
- Transfers (portability petitions): Petitions filed by a new employer for an H-1B worker who has already been counted against the cap
Broader Regulatory Context
The proposed fee does not exist in isolation. It is part of a sustained series of actions over the past year that may significantly increase the cost and complexity of employer-sponsored immigration.
Taken together, these actions may reflect a comprehensive reshaping of the economic landscape for employer-sponsored immigration. Employers that sponsor H-1B workers should analyze the cumulative changes and proposed changes relative to their immigration program budgets.
Legal and Constitutional Challenges Likely
The $103,265 Proposed Rule is virtually certain to face legal challenge. It is contemplated that potential plaintiffs may argue at least some of the following:
- Fee vs. Tax Distinction. Under the framework established in National Cable Television Ass’n v. United States, 415 U.S. 336 (1974), a fee must bear a reasonable relationship to the cost of the service provided to the fee-payer. Because the majority of the projected $8.8 billion in revenue DHS expects to derive from the $103,265 fee would fund activities unrelated to H-1B adjudication—including removal proceedings, refugee resettlement, and wage enforcement—challengers will likely argue that the charge functions as an impermissible tax rather than a lawful fee.
- Statutory Authority Under INA § 286(m). The text of Section 286(m) limits fee-setting authority to fees that recover the costs of providing “adjudication and naturalization services.” Plaintiffs will likely argue that removal proceedings administered by the Immigration Court and refugee programs run by the State Department are not “adjudication services” in any conventional reading of the statute. Approximately $5.7 billion of the projected annual revenue would flow to the Department of Justice, Department of State, and Department of Labor for activities outside the plain statutory text.
- Major Questions and Arbitrary/Capricious Concerns. Challengers may argue that a rule generating $8.8 billion annually from a general fee-setting provision requires clearer congressional authorization and is inadequately supported by DHS’s assumptions about petition volume, benefits, and impacts on small entities.
Steps Employers Should Consider
Given the magnitude of the proposed fee and the compressed comment period, employers may wish to consider taking the following steps:
- Submit Public Comments by September 24, 2026. Interested parties may submit comments addressing any aspect of the proposed rule. Such comments may include the economic impact on the employer’s workforce planning, the adequacy of the 30-day comment period, the relationship between the $103,265 fee and the cost of adjudication services, and any other substantive or procedural issues. The comments must be filed through regulations.gov under Docket No. USCIS-2026-0298.
- Model Cumulative Immigration Program Costs. Employers should calculate the total per-petition cost under the proposed rule, including all existing and newly proposed fees, to assess the impact on their immigration budgets. For employers sponsoring multiple H-1B cap-subject workers, the aggregate cost increase could be substantial.
- Evaluate Workforce Planning Alternatives. If the rule is finalized, employers may wish to consider whether alternative visa classifications (such as L-1, O-1, or TN), cap-exempt petition pathways, or adjustments to hiring timelines and strategies.
- Assess the Impact on Pending and Planned Petitions. Employers planning to register for H-1B cap-subject petitions in the coming fiscal year should evaluate how the proposed fee, if finalized, would affect their filing strategies and budgets.
- Monitor Litigation Developments. Employers should stay apprised of judicial developments in both the pending litigation related to the $100,000 Presidential Proclamation and any new litigation challenging the $103,265 Proposed Rule.
- Engage Industry Associations and Coalitions. Trade associations and industry groups are likely to file comments and may coordinate legal challenges. Employers should consider joining or supporting these efforts to amplify their voice in the rulemaking process.
Conclusion
If finalized, the proposed $103,265 fee would significantly increase the total cost of a cap-subject H-1B petition. As such, impacted employers may wish to submit substantive comments by September 24, 2026, to address the proposal’s practical effects.
We will continue to monitor this rulemaking and provide updates as the comment period closes and the next steps become clear. Please contact our office if you have any questions or would like assistance in communicating with your congressional representatives.