New $103,265 H-1B Fee Proposal, SchulzLaw Blog, August 25, 2026 | by cmatthewschulz SchulzLaw, PC

By cmatthewschulz , 24 August, 2026

A hardworking company representative gives money to Uncle Sam, who distributes it among bureaucrats labeled USCIS, ICE, CBP, EOIR, DOS and DOL.

DHS Proposes $103,265 Fee for Cap-Subject H-1B Petitions: Who Would Pay and Is It Lawful?

By C. Matthew Schulz

The Department of Homeland Security (DHS) has proposed a new $103,265 filing fee for every cap-subject H-1B petition, including petitions selected under the U.S. advanced-degree allocation. The fee is not yet in effect, and employers do not owe it unless DHS completes notice-and-comment rulemaking and publishes a final rule.

There is an advance copy of the proposed rule, Fee for Certain H-1B Petitions, scheduled for publication in the Federal Register on August 25, 2026. DHS identifies the rule as DHS Docket No. USCIS-2026-0298 and RIN 1615-AD20.

Major media coverage includes Forbes, Washington Post, and Politico.

What Fee Is DHS Proposing?

DHS proposes an additional fee of $103,265 for each cap-subject H-1B petition filed with U.S. Citizenship and Immigration Services (USCIS). The employer would pay the fee when it files the petition after selection in the cap process.

The fee would be separate from—and added to—the Form I-129 filing fee, the Asylum Program Fee, the fraud-prevention fee, the American Competitiveness and Workforce Improvement Act fee, premium processing, and any other applicable charge. It would not replace any existing fee.

The proposal states that, if an employer were subject to both this new regulatory fee and a separate payment required by a presidential proclamation, the employer would have to pay both. The earlier $100,000 proclamation payment has been vacated by federal court ruling that it is unlawful, however, and the government may not collect it while that judgment remains in effect.

Which H-1B Petitions Would Be Subject to the Fee?

The proposed fee would apply to "petitions subject to the annual H-1B numerical limit":

Petitions within the regular 65,000 H-1B cap; and
Petitions eligible for the additional 20,000 H-1B numbers reserved for beneficiaries who earned a qualifying U.S. master's or higher degree.

The phrase “advanced degree exemption” can cause confusion. Those 20,000 cases receive an exemption from the regular 65,000 limit, but they remain part of the annual cap-selection system and would be subject to the proposed $103,265 fee.

The proposed regulation refers to a cap-subject petition that is "filed", not merely an electronic registration. An employer therefore would not pay $103,265 to enter the cap-selection process. The payment obligation would arise only if the employer filed a cap-subject Form I-129 petition after selection.

Which H-1B Petitions Would Be Exempt?

The additional fee would not apply to an H-1B petition that is not subject to the annual cap. Examples generally include:

Petitions filed by institutions of higher education;
Petitions filed by qualifying nonprofit entities related to or affiliated with institutions of higher education;
Petitions filed by nonprofit research organizations or governmental research organizations; and
Petitions for workers who have already been counted against the H-1B cap and remain eligible for cap-exempt H-1B time, including many extensions, amendments and changes of employer.

Other statutory cap exemptions should also remain outside the proposed fee. Whether a particular filing is cap-exempt can be technical, however, especially in concurrent-employment cases or when a worker moves between cap-exempt and cap-subject employment.

Importantly, the proposal's exemption differs from the earlier $100,000 presidential-proclamation payment. The proposed rule turns on whether the "petition is cap-subject". The proclamation payment generally turned on the beneficiary's location, visa history and whether the filing required consular processing or entry from abroad.

How Did DHS Calculate $103,265?

DHS did not calculate the proposed fee from the cost of adjudicating one H-1B petition. DHS identified approximately $8.777 billion in annual costs across six federal agencies or components, divided that amount by a projected 85,000 fee-paying petitions, and rounded the result to the nearest $5.

Only about one-third of the proposed revenue would remain with USCIS. DHS says the rest would reimburse immigration-related expenses that other agencies incur, including immigration-court operations, border inspection and enforcement, consular visa processing, labor-condition and labor-certification programs, wage enforcement, technology, records, vetting and interagency coordination.

For USCIS, the proposal assigns $1.8236 billion in non-premium Immigration Examinations Fee Account costs and transfers another $1.1764 billion in core costs away from premium-processing revenue. DHS also proposes to fund programs beyond H-1B adjudications, including parts of the PERM, H-2A and H-2B systems and general immigration enforcement.

DHS acknowledges that it selected cap-subject H-1B employers because it believes they are more willing and able to pay than other immigration applicants. It compares the proposed fee with a reported median annual compensation of $133,000 for approved H-1B workers and argues that the fee is not significant when measured against an employer's potential six-year wage obligation. DHS also acknowledges that it has never before imposed a fee on one specific immigration subpopulation to recover this range of USCIS and government-wide costs.

When and How Can the Public Comment?

The proposed rule provides a 30-day public-comment period. Because the advance copy was scheduled for publication on August 25, 2026, comments should be due by 11:59 p.m. Eastern time on September 24, 2026. The public-inspection copy still contains a placeholder for the deadline, so commenters should confirm the date shown in the published notice and online docket.

Comments must be submitted through the Federal eRulemaking Portal and must identify:

U.S. Citizenship and Immigration Services; and
DHS Docket No. USCIS-2026-0298.

DHS asks commenters to identify the specific provision they address, explain the reason for any recommended change, and provide supporting data, information or legal authority. Comments must be in English or include an English translation.

Do not send comments by email, ordinary mail, hand delivery or courier. The notice states that USCIS will not accept those methods or comments stored on digital media. Comments submitted through Regulations.gov will become public, including personal information the commenter chooses to include.

Analysis

This proposed rule is a new attempt to a similar $100,000 result to an earlier attempt held unlawful.

The Trump Administration tried to impose a similar charge in September 2025 through Presidential Proclamation 10973. That proclamation directed agencies to require a $100,000 payment with many new H-1B petitions for workers outside the United States. It relied on INA §§ 212(f) and 215(a), which give the President broad authority to restrict entry, but it did not use DHS's statutory authority to establish adjudication fees.

The agencies implemented the payment immediately through web guidance, frequently asked questions, a payment portal and a revised fee schedule. They did not first publish a proposed rule, accept public comments, prepare a cost-based fee analysis or tie the $100,000 amount to adjudication expenses.

Twenty states challenged the policy in federal court in the case California v. Mullin. On June 8, 2026, the U.S. District Court for the District of Massachusetts declared the implementing policy unlawful and vacated it.

The court held that the payment operated as a tax, not a penalty for unlawful conduct, because hiring an H-1B worker is lawful and each payment raised revenue. Congress may delegate revenue-raising authority, but it must do so clearly. The court found no clear delegation of taxing or fee-setting power in the President's authority to impose entry “restrictions,” “rules,” “limitations” or “exceptions.”

The court separately held that the agencies violated the Administrative Procedure Act (APA). The implementation materials functioned as a legislative rule, but the agencies skipped notice-and-comment rulemaking. The policy also exceeded statutory authority because it was not an adjudication fee based on cost, and the administrative record did not show reasoned consideration of reliance interests, alternatives or the policy's consequences.

The government appealed. On July 24, 2026, the U.S. Court of Appeals for the First Circuit denied the government's request to stay the judgment. That order did not finally decide the appeal, but the court concluded that the government had not made a strong showing that it would win. The appeal remains pending as of August 25, 2026, and the $100,000 proclamation payment is not currently collectible.

Why the New Proposal Has a Stronger Legal Foundation

The new proposal responds directly to several defects identified in California v. Mullin.

First, DHS now relies on an express fee statute. INA § 286(m), 8 U.S.C. § 1356(m), authorizes DHS to set fees for adjudication and naturalization services at a level that recovers the full cost of all such services, including similar services provided without charge. INA § 286(n) permits reimbursement of appropriations used for immigration adjudication and naturalization services, and § 286(j) authorizes implementing regulations.

Second, DHS is using notice-and-comment rulemaking. It published a proposed regulatory amendment, stated its legal authority, disclosed its methodology and allocations, evaluated economic effects, and invited public comment. Those steps address the earlier policy's most obvious APA procedural failure.

Third, DHS offers a cost calculation. The prior proclamation selected a round $100,000 payment without tying it to adjudication costs. The new proposal identifies $8.777 billion in expenses, uses a projected filing volume and explains the resulting $103,265 amount.

The First Circuit's stay order may also help DHS on one point. While discussing Congress's pattern of expressly authorizing immigration fees, the court cited § 1356(m) as a statute that authorizes fees to recover the full costs of adjudication and naturalization services. DHS has now invoked that very provision.

Why the Proposed Fee Still Faces Serious Legal Risk

Changing the source of authority and following rulemaking procedures do not necessarily make the fee lawful. A court will still ask whether the statute authorizes **this fee, imposed on these petitioners, to pay these costs**.

Is It a User Fee or a Tax?

A traditional user fee bears a reasonable relationship to the service or special benefit that the payer receives. DHS instead proposes to place nearly $8.8 billion in costs on 85,000 cap-subject H-1B petitioners, while spending almost two-thirds of the revenue outside USCIS.

Many listed expenses—immigration-court proceedings, detention and enforcement, broad border operations, PERM processing, H-2 programs and wage enforcement—may have little or no direct connection to adjudicating a particular cap-subject H-1B petition. DHS expressly selected this group in significant part because it believes the employers can afford the charge. That ability-to-pay rationale resembles taxation more than cost-based pricing for a government service.

The Supreme Court stated in Skinner v. Mid-America Pipeline Co. that Congress must speak clearly before an agency may impose financial burdens to recover administrative costs that do not directly benefit the regulated parties. The First Circuit quoted that principle when it refused to stay the judgment against the earlier $100,000 policy.

Section 1356(m) supplies clearer authority than the presidential entry statutes did. But its language still limits fees to the full costs of providing “adjudication and naturalization services.” Litigation will likely focus on whether Congress clearly authorized DHS to fund this sweeping collection of court, enforcement, consular and labor programs through a fee charged only to cap-subject H-1B employers.

Does the Fee Method Rationally Allocate Costs?

USCIS normally conducts a biennial fee review. It forecasts workloads and revenue, calculates direct and indirect costs, uses activity-based costing informed by Office of Management and Budget Circular A-25, and allocates costs across benefit requests. Congress also has fixed some H-1B charges directly by statute, including the training and fraud-prevention fees; DHS cannot change those statutory amounts on its own.

The proposed rule departs sharply from the usual model. It does not price the adjudication burden of cap-subject H-1B petitions. It assigns an unprecedented government-wide pool of costs to a narrow class and divides the total by 85,000.

That methodology raises several APA questions. DHS assumes 85,000 fee-paying petitions each year even though a six-figure filing fee will predictably suppress demand. It concedes that filings may decline, but its revenue model depends on the volume not falling below the statutory cap. The annual cap limits approvals or grants of status; it does not guarantee that employers will file 85,000 petitions after confronting a $103,265 charge.

A reviewing court may also ask whether DHS adequately considered small employers, public-service employers, startups, rural businesses, reliance interests, less disruptive alternatives and the cumulative effect of other H-1B charges. The proposal acknowledges that some small entities may stop filing, which could undermine both its revenue projection and its stated program goals.

Does the Proposal Present a Major-Questions Problem?

DHS proposes to generate about $8.8 billion annually through a use of § 1356(m) that it admits is unprecedented. The size, economic significance and novelty of the program may support an argument that Congress needed to authorize this approach more clearly. Courts may be reluctant to infer from a general adjudication-fee statute the power to finance a substantial portion of immigration operations across several departments through one narrow class of petitions.

On the other hand, DHS will argue that § 1356(m) deliberately authorizes recovery of the aggregate full costs of immigration adjudication services, including some services provided without charge, and that § 1356(n) expressly contemplates reimbursing other appropriations. The outcome may turn on which claimed costs a court considers genuine adjudication and naturalization services rather than general enforcement, policy or public-benefit expenses.

After *Loper Bright Enterprises v. Raimondo*, a court will exercise its own judgment about the best reading of the statute rather than defer to DHS merely because the statutory boundary is ambiguous. That makes the scope of §§ 1356(m) and (n)—and the quality of DHS's administrative record—especially important.

Why USCIS Fees Matter During a Government Shutdown

Reasonable filing fees serve an important operational purpose. USCIS depends primarily on user fees rather than annual appropriations. The proposed rule reports that the Immigration Examinations Fee Account supplied approximately 95% of USCIS funding in fiscal year 2025.

Congress made funds in that account available until expended. As a result, fee-funded USCIS work can generally continue during a lapse in annual appropriations. In its 2025 [shutdown contingency plan](https://www.dhs.gov/sites/default/files/2025-09/2025_0929_dhs_procedures_related_to_a_lapse_in_appropriations.pdf), DHS estimated that USCIS would retain 21,568 of its 22,408 employees because their functions were exempt from or excepted to a funding lapse.

That continuity matters to employers, families and workers who have paid for adjudication services and depend on timely decisions. It also distinguishes much USCIS work from government programs funded only through annual appropriations. A shutdown can still disrupt connected services at other agencies, such as Department of Labor processing, and not every USCIS function necessarily continues. But durable fee revenue and responsible operating reserves help USCIS retain personnel and keep paid-for adjudications moving.

That does not mean any fee amount or allocation is lawful. A sustainable fee system should recover authorized costs, preserve service continuity, maintain adequate reserves, and distribute expenses through a reasoned method that respects the limits Congress imposed.

What Employers Should Do Now

The proposed $103,265 fee is not currently due. Employers should nevertheless model the potential cost before the next cap season, identify positions that may qualify for a cap-exempt strategy, evaluate other professional visa options, and consider submitting evidence-based comments before the deadline.

Comments will carry more weight if they quantify the proposal's real effects. Employers can address hiring plans that would be canceled, positions that would move abroad or remain vacant, effects on wages and innovation, impacts on schools and healthcare providers, consequences for small and rural employers, and whether the 85,000-petition assumption remains realistic at a $103,265 price point.

The final rule may change after comments, and litigation is likely if DHS adopts the proposal substantially as written. Employers should not assume that the earlier court decision automatically invalidates the new proposal, but they also should not assume that a cost table and a notice-and-comment process resolve the proposal's serious statutory problems.