DHS Proposes a $103,265 Fee on Cap-Subject H-1B Petitions

The Department of Homeland Security has released a proposed rule that would impose a fee of $103,265 on every cap-subject H-1B petition, payable at the time of filing and stacked on top of every existing H-1B cost. Set to publish in the Federal Register in late August 2026, the proposal is the administration's second attempt at a six-figure H-1B charge, this time structured as a formal regulation after a federal court struck down an earlier version imposed by presidential proclamation. For employers that rely on skilled foreign professionals, and for the workers themselves, it would represent one of the most significant cost changes the H-1B program has seen, and it is worth understanding both what the rule proposes and where it fits in a broader pattern of pressure on temporary work status.

What the Rule Would Do

At its core, the proposal creates a single new fee, distinct from and additional to the existing I-129 petition fee, on cap-subject H-1B petitions. Several features define its scope.

The fee would apply to all petitions subject to the annual H-1B cap, including those filed under the 20,000-visa advanced degree exemption for holders of U.S. master's degrees or higher. DHS states it would apply uniformly, regardless of employer size or profit status. It would be charged on top of everything else, meaning the base I-129 fee, other existing costs, and premium processing if elected, rather than replacing any current fee.

Cap-exempt petitions would be spared. Filings by institutions of higher education, their affiliated nonprofits, and nonprofit or governmental research organizations would not be subject to the fee, an exclusion DHS justifies by reference to the same reasoning it used in exempting those employers from other recent fee measures.

Notably, and unlike the earlier proclamation-based fee that reached only petitions filed from abroad, this rule would apply to many workers already residing in the US. That broadening is one of the most consequential aspects of the proposal, because it extends the cost to the change-of-status and extension filings that make up a large share of ordinary H-1B activity, not merely to new hires coming from overseas.

Where the Revenue Would Go

One distinctive feature of the proposal is that most of the money it would raise is directed outside USCIS. DHS estimates the fee would generate roughly $8.8 billion annually and proposes to distribute it across 6 federal agencies, with USCIS retaining about a third and the remainder funding the immigration courts, the Department of Labor, Immigration and Customs Enforcement, the State Department, and Customs and Border Protection. This structure is significant not only as a policy matter but as a legal one: the earlier fee was invalidated in part because a court found it functioned as an unauthorized tax, and framing the new charge as a means of offsetting the cost of running the immigration system appears intended to carve a more defensible legal path.

The Legal Backdrop

The proposal does not arrive on a blank slate. The administration attempted a similar $100,000 H-1B fee in 2025 through a presidential proclamation, which a federal judge invalidated in mid-2026, finding that it amounted to a tax imposed without congressional authorization and that it failed to account for the effect on sectors facing labor shortages, including those that rely on the H-1B program to hire physicians, nurses, and teachers. The administration appealed and sought to pause that ruling pending appeal, but the request was denied.

By recasting the charge as a regulatory fee tied to the cost of immigration administration, the new rule seeks to address the defect the court identified. Whether that framing survives the legal challenges it is likely to draw remains to be seen; immigration practitioners and industry groups have already characterized it, as they did the earlier version, as an unlawful tax in different clothing. The proposal is, for now, only a proposal.

What Happens Next

Nothing changes immediately. The rule must go through a public comment period, expected to run 30 days from publication, after which DHS would need to respond to comments, potentially revise the rule, clear White House review, and publish a final rule with an effective date. That process can take months or longer, and the outcome is not assured. In the meantime, existing H-1B fees remain in effect, and employers and workers should not alter filings based on a proposal still under review.

Two further uncertainties are worth noting. DHS's own analysis concedes the rule would have a significant economic impact on thousands of small employers and identifies no alternative that would lessen that burden. And the proposal does not address whether the fee would be refundable if a petition is denied, rejected, or withdrawn, a meaningful open question given that the charge would be paid at the petition stage, after a worker has already been selected in the lottery, and that USCIS generally does not refund filing fees.

What This Means in the Larger Picture

For employers, a six-figure fee on each cap-subject petition, layered on top of all existing costs and now reaching workers already in the country, would materially change the economics of hiring and retaining H-1B talent. Some observers have suggested that even large companies may decline to pay it for many of their H-1B workers, which could translate into a substantial reduction in petitions. For the workers themselves, that introduces a new layer of uncertainty into a status that was already conditional on an employer's willingness to sponsor and, in most cases, on a lottery.

This proposal is best read alongside the other measures reshaping temporary status this year, the move to eliminate the 60-day grace period after a job loss, the fixed four-year terms and tightened extension rules for students, and the proposed fee on student work authorization. The common direction is that the pathways that run through employment and enrollment are becoming more expensive, more conditional, and less predictable.

Why EB-5 Has Always Been a Sustainable Path

It is against this backdrop that a growing number of foreign professionals, particularly those in H-1B status, weigh alternatives that do not depend on employer sponsorship at all. EB-5 leads to permanent residence through a qualifying investment rather than through a sponsored petition, which means it is not subject to the H-1B cap, the lottery, or the fees being layered onto that program. An EB-5 investor's path to a green card does not run through an employer, and so it is unaffected by whether an employer is willing to absorb a new six-figure charge on the worker's behalf. For those already in the US who qualify under a reserved EB-5 category with a visa number available, adjustment of status may often be filed concurrently with the petition, carrying employment authorization and advance parole while the case is pending.

None of this makes EB-5 the right choice for everyone; it is a substantial financial commitment requiring lawfully sourced and thoroughly documented funds, and it should be weighed on its own terms. But as the cost and uncertainty of the employer-sponsored route continue to rise, the appeal of a permanent pathway that sidesteps that route grows correspondingly. For professionals already considering the option, this proposal is one more reason to evaluate it sooner rather than later.

Final Thoughts

The new proposed $103,265 H-1B fee would be a significant new cost on one of the country's primary skilled-worker programs, and its broadened reach to workers already in the US distinguishes it from the administration's earlier attempt. The rule is not final, its legal footing will be tested, and existing fees continue to apply for now. But it reflects a clear and continuing trend toward higher costs and greater conditionality across temporary work and study pathways. Employers and affected workers should follow the rulemaking closely, prepare to participate in the comment period once the proposal publishes, and consult qualified immigration counsel about how this change, and the broader shift it represents, bears on their particular circumstances.

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