A proposed $103,265 H-1B fee would make the H-1B lottery economically impractical for many employers, particularly for entry-level positions, if the fee is finalized. Already, employers from their C-suites to recruiters are considering how the fee might affect them, including from a strategic standpoint.
An H-1B petition is a company’s request to the U.S. Department of Homeland Security (DHS) petitioning for an individual to work in the United States in a specialty occupation, such as high-level positions in the finance, tech, and healthcare industries, said Leon Rodriguez, an attorney with Seyfarth in Washington, D.C., and Miami.
The DHS is proposing to require an additional $103,265 fee for every cap-subject H-1B petition, explained Bo Cooper, an attorney with Fragomen in Washington, D.C. “It’s important to recognize the scale” of the fee, he said. “The new fee for most petitions would be nearly 30 times higher than today’s filing fees.”
Affected Industries
Many sectors would be affected by the fee — not just staffing and information technology, though they likely would be hit the hardest, said Hector Chichoni, an attorney with Greenspoon Marder in Miami. Some sectors will be affected more than others, he added, predicting those would include biotech, engineering, finance, hospitality, manufacturing, pharma, and private hospitals and clinics.
The proposed fee would steer companies toward using “H-1B sponsorship as a scarce, high-cost strategic resource, and for specialized high-producing professionals, rather than a routine hiring tool,” he said. From CEOs down to recruiters, employers “will have to reserve H-1B sponsorship for roles where foreign talent provides a clear, hard-to-replace advantage.”
Agriculture, animal health and nutrition, food production and food machinery, banking, insurance, transportation and logistics, and small business across all industries will be affected, said Mira Mdivani, an attorney with Mdivani Corporate Immigration Law Firm in Overland Park, Kan. “For small businesses in the Midwest, this is a devastating blow especially in a tight labor market, because they often have zero U.S. qualified applicants,” she said.
The proposed fee would apply broadly to employers using cap-subject H-1B visas, across a wide range of industries that also includes consulting, some educators, and life sciences, Cooper noted.
Fee Would Not Apply to Every H-1B Petition
The only employers generally outside the proposal’s scope are those filing cap-exempt H-1B petitions, such as many universities, nonprofit research organizations, and certain affiliated institutions like university hospitals, Cooper said.
H-1B petitions that are exempt from the cap and would not be subject to the proposed fee, according to Yova Borovska, an attorney with Buchanan in Tampa, Fla., include petitions:
--Filed by cap-exempt employers, such as institutions of higher education, nonprofit organizations affiliated with colleges or universities, nonprofit research organizations, and government-research organizations.
--Filed by cap-subject employers for beneficiaries who will perform at least half of their work at a cap-exempt organization if the job duties will directly further an activity that supports or advances one of the cap-exempt organization’s fundamental purposes, missions, objectives, or functions.
--Requesting an extension of stay, amendment, or change of employer for an individual who already holds H-1B visa status obtained through the cap.
--Seeking concurrent employment with cap-exempt organizations.
--For physicians who were granted J-1 visa waivers through sponsorship from an interested government agency or the U.S. Citizenship and Immigration Services’ Conrad 30 waiver program.
The fee likely will lead to stiff competition for existing H-1B employees, with employers poaching talent from each other, Mdivani said.
Legal Challenges Likely
Unlike the separate, presidential proclamation-based $100,000 H-1B fee from last year, which a district court blocked (a decision the Trump administration is appealing while extending the fee), universities will likely not lead any court challenges to this new proposed $103,265 DHS fee, because it won’t apply to them, Cooper noted. He said for companies needing continued access to foreign talent and not wishing to see a near future that requires filing fees north of $100,000 for H-1B workers, “the time to act is now.”
There will almost certainly be legal challenges to the proposal after it is finalized, Cooper said. “Challengers will likely seek preliminary relief before the fee would become due in June 2027,” he predicted. “That is very late, though, in the H-1B planning, recruiting, and filing cycle, so the proposal casts a lot of uncertainty into that process.”
Potential litigation might maintain that the DHS lacks statutory authority to impose such a high fee, which could be construed as an unlawful tax, Borovska said. “Based on the recent district court vacatur of the September 2025 $100,000 proclamation, district courts may be willing to scrutinize DHS’s authority and legal justification.”
Mdivani said U.S. businesses will challenge the DHS fee because they need the ability to hire international talent or face having to outsource their operations abroad, leading to downsizing in their U.S. operations.
Reduced access to global talent could hinder innovation, especially in sectors like technology, healthcare, and research, Borovska said.
But, she added, it is uncertain whether the legal challenges of this DHS fee would be successful in the long term. The challenges “could be appealed to higher courts with the potential to uphold or overturn the rulings.”
Strategic Implications
If the fee is finalized and withstands likely legal challenges, it might result in employers fundamentally reassessing their talent acquisition strategies, workforce planning, and long-term operating models, said Shin-I Lowe, an attorney with Littler in Miami.
“For many organizations, access to foreign talent through the H-1B cap program has been an important component of recruiting and workforce development,” she said.
The cap is the process through which the DHS grants up to 85,000 H-1B visas annually, consisting of 65,000 for regular cap applicants and an additional 20,000 reserved for individuals with advanced degrees from U.S. institutions — the master’s exemption, Borovska noted. The fee would apply to all these visas.
While the fee would not completely eliminate the H-1B program, it would significantly restrict access and the number of cap-subject H-1B petitions would “decrease dramatically,” she said.
Nonetheless, “CEOs and CHROs should stay the course and begin preparing their companies’ H-1B cap filings for next year because it is likely that either the courts or the administration will reverse this H-1B fee,” Mdivani predicted.
That said, Lowe added that if the proposed fee is implemented, employers would need to determine whether continued reliance on the H-1B lottery remains economically viable and, if so, for which positions. “While many employers already do, many more employers may conclude that H-1B sponsorship should be reserved for more senior, specialized, or business critical roles, while entry-level positions are filled through domestic recruiting or other talent pipelines,” she said.
In many cases, employers may become more willing to hire domestic candidates who do not perfectly match all desired qualifications, but who can be trained and developed internally, Lowe stated.
Employers may conclude they can’t support the proposed DHS H-1B fee for recent international bachelor’s and master’s graduates, Rodriguez noted.
But some employers may instead place greater emphasis on alternative, limited visa categories, such as L-1 intracompany transfers, J-1 visas for exchange visitors, TN visas for Mexican and Canadian professionals, or O-1 visas for individuals with extraordinary ability.
Other alternative recruitment strategies, according to Borovska, include:
--Initiating direct permanent residency sponsorship to get a green card for individuals in certain positions when the employer is unable to locate qualified, willing, able, and available U.S. workers. “This would not be a practical solution for meeting immediate staffing needs,” she said, “as the process can take several years and is often logistically difficult, especially for nationals of certain countries.”
--Relying more heavily on offshoring or outsourcing operations to countries with more flexible or affordable immigration policies.
--Pursuing global talent sourcing through international offices or contractor arrangements outside the U.S.
--Increasing recruitment efforts within the U.S., including expanding internship and training programs, or offering more competitive compensation packages to attract domestic talent.
“Undoubtedly, this fee pushes employers to hire offshore,” Chichoni said. For $103,265, “a company can, in some countries, hire 40 to 50 employees for a year to do the same job, including their training. This is particularly true of IT services.”
Organizations likely will need to evaluate their dependence on consulting firms and contingent labor providers, Lowe said. “To the extent those providers rely on H-1B talent, increased sponsorship costs may ultimately be reflected in higher service fees, reduced talent availability, or both.”
Employers may need to determine whether direct hiring, workforce development initiatives, or alternative staffing models provide more sustainable solutions, she added.
“For multinational organizations, the proposal may accelerate consideration of offshore delivery models, global mobility programs, and international rotational assignments as alternative means of accessing talent,” Lowe said.
Organizations that have not already done so should seriously evaluate alternative talent sources, workforce development initiatives, global mobility programs, and operational flexibility measures to reduce dependence on the traditional H-1B pipeline, she noted.
Larger Context
This new proposed fee, as impactful as it may be, has to be seen “as just one part of the full picture,” Cooper said.
“Changes limiting high-skill, work-based legal immigration are coming at a scale and speed we are not familiar with,” he added. “There is a dramatic new landscape to understand and plan for.”
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