A judge struck down the $100,000 visa fee. The government wrote a new one anyway.

A federal judge vacated it in June. A federal appeals court declined to revive it in July. And on September 20, the presidential proclamation that created it expires on its own terms. By most measures, the Trump administration's $100,000 tax on employers who hire H-1B specialty workers from abroad is dead. Yet the policy it embodied is very much alive, and arguably more durable than before: the Department of Homeland Security is now pursuing a $103,265 version of the same idea through the one process courts have never told it it cannot use — ordinary federal rulemaking.

The distinction is not cosmetic. It is the entire legal strategy. A notice of proposed rulemaking that the Department of Homeland Security published on August 25 would establish a $103,265 fee on H-1B cap-subject petitions, collected at the time of filing, on top of every fee employers already pay. Unlike the proclamation, this version applies to workers already living and working in the United States, not only to new hires abroad, and it would be codified in the agency's fee schedule rather than imposed by a single presidential order that a judge can vacate in one ruling.

What the courts actually said

Proclamation 10973, signed by President Trump on September 19, 2025, barred entry to new H-1B workers from abroad unless their employer paid $100,000, a measure the administration said was needed to stop companies from using the visa program to replace American workers with cheaper labor. The U.S. Chamber of Commerce sued within weeks, and by December, California and nineteen other states had joined a separate challenge in federal court in Massachusetts, arguing the fee was an unlawful tax dressed up as an immigration restriction.

They won. In June, a federal district judge in Massachusetts granted summary judgment against the government on every claim and vacated the fee outright, ruling that a $100,000 charge on lawful conduct functions as a tax rather than a regulatory fee, and that only Congress holds the power to impose one. When the government asked the First Circuit to let it keep collecting the fee while it appealed, the appeals court refused, concluding the government had not shown it was likely to win on the merits — a defeat memorialized on the docket in California v. Mullin. The ruling leaned on reasoning the Supreme Court had already validated months earlier, when it held in its ruling striking down the administration's IEEPA tariffs that the president cannot use emergency or entry powers to impose what amounts to a tax without explicit congressional authorization.

A different door, the same room

DHS's new proposal is built to avoid exactly that vulnerability. Rather than invoking the president's power to restrict entry, the agency is relying on statutory fee-setting authority and running the measure through the Administrative Procedure Act's notice-and-comment process — the very procedure the states argued the original proclamation had skipped. Jeff Joseph, president of the American Immigration Lawyers Association, has called the maneuver transparent: DHS, he has said, wants a six-figure H-1B fee and will pursue it by rulemaking if courts take away the proclamation route, adding that judges will eventually have to decide whether a proposed fee this size is arbitrary and capricious, disconnected from the actual cost of adjudicating a petition, and whether DHS even has the statutory authority to set an immigration fee at this scale.

The agency's own numbers, laid out in the regulatory impact analysis accompanying the proposed rule, show the scale of what is at stake. DHS projects roughly 85,000 cap-subject H-1B petitions a year — the statutory limit of 65,000 plus 20,000 reserved for advanced-degree holders — which at $103,265 apiece would generate about $8.8 billion annually, with two-thirds of that revenue earmarked for immigration-related costs at agencies beyond USCIS, including the State Department, the Justice Department and the Labor Department. Universities, their nonprofit affiliates, and nonprofit or government research organizations are unaffected, but only because their petitions are statutorily exempt from the annual cap altogether, not because the rule carves out any special protection for them.

Who absorbs the cost

DHS's analysis also concedes the fee would land hardest on the employers least able to pay it. The agency estimates the rule would cause a "significant economic impact" on 11,051 small entities — 76 percent of the small businesses that filed cap-subject H-1B petitions in fiscal 2025. Immigration attorney Elizabeth Ricci has pointed out the internal contradiction in the government's own logic: if the fee successfully deters hiring, the projected revenue never materializes, and either way, she has said, the country loses talent and jobs. Britta Glennon, a Wharton management professor who studies high-skilled migration, has argued that multinational corporations facing tighter visa access typically respond by shifting the jobs overseas rather than eliminating them — an option unavailable to the domestic startups and small firms that depend on the H-1B pipeline and would instead simply absorb the cost or forgo hiring.

"The new $100,000 visa fee will make it cost-prohibitive for U.S. employers, especially start-ups and small and midsize businesses, to utilize the H-1B program." — Neil Bradley, executive vice president and chief policy officer, U.S. Chamber of Commerce

Bradley's warning, issued when the Chamber first sued over the proclamation, applies with equal force to its regulatory successor, which is slightly more expensive and reaches further, covering renewal-adjacent hiring for workers already inside the country. A Fortune analysis of the rule's small-business impact found that founders in fields from biotech to software engineering describe the fee as effectively pricing early-stage companies out of the program entirely, since few startups can front six figures per hire before knowing whether the position will pan out.

The stakes ahead

DHS has defended the fee as a matter of fiscal fairness rather than immigration restriction. A department spokesperson has said the charge is intended to recover the costs incurred across the federal government to adjudicate, vet, and support lawful immigration programs that would otherwise have to be funded by taxpayers. The administration's political leadership has framed it more bluntly as a labor-market corrective. Vice President JD Vance, responding on social media in December to Oregon and eighteen other states suing over the original fee, told the states' attorneys general that employers complaining about the visa program should try hiring Americans instead.

Public comments on the proposed rule are due by September 24, and immigration lawyers widely expect litigation the moment DHS finalizes it, this time testing not whether the president can act unilaterally but whether an agency's cost-recovery theory can be stretched across five departments' worth of immigration enforcement and still survive review under the Administrative Procedure Act's arbitrary-and-capricious standard. A First Circuit panel's refusal to revive the earlier fee suggests judges are already skeptical of six-figure charges imposed on a program Congress structured very differently. Whether that skepticism survives the switch from proclamation to regulation is the question the next round of litigation will answer — and, in the meantime, employers filing for the spring 2027 H-1B lottery are left planning around a fee that no court has yet upheld but that federal policy, in one form or another, has now pursued for a full year.