Trump's H-1B Fee Sparks Lawsuit; Employers Brace for Change

Editor's Note: The U.S. Chamber of Commerce filed a legal challenge Oct. 16, suing the Trump administration over the $100,000 fee on H-1B visa petitions. This is the second lawsuit arguing that the fee is unlawful.

U.S. employers are still reeling over a series of proposed changes to the H-1B visa program for foreign workers, with significant implications for workforce planning, global mobility, and organizational talent strategies. 

On Sept. 19, President Donald Trump issued a proclamation introducing a $100,000 fee onto "new" petitions for H-1B visas. This was followed on Sept. 23 with an announcement from U.S. Citizenship and Immigration Services of a proposed rule that would favor H-1B petitions for higher-paid roles by allowing them more entries into a lottery system used to award the visas. If the proposal is finalized and goes into effect, the new system could be in place for the next H-1B lottery in March 2026. 

In addition, the presidential proclamation directed the U.S. Department of Labor (DOL) to propose raising the prevailing wage levels for the H-1B program. The DOL also initiated an enforcement agenda of intensified investigations of H-1B management practices.

"While SHRM understands the Trump administration’s goal of protecting the American worker, we encourage them to consider unintended consequences that could create major barriers for employers — particularly small and mid-sized businesses," said Emily M. Dickens, J.D., SHRM chief of staff, head of government affairs, and corporate secretary. "We urge the White House to work with stakeholders to strike the critical balance of protecting American workers while ensuring employers can access the critical skills our economy needs."  

First Challenge

A coalition made up of an international nursing recruitment firm, several unions and an association of university professors, among others, filed a lawsuit Oct. 3 seeking to block President Trump's bid to impose the $100,000 fee on new H-1B visas. 

In the complaint in the case, Global Nurse Force v. Trump, filed in federal court in San Francisco, the plaintiffs argue that Trump exceeded his authority when he imposed the hefty fee. 

The suit claims that the fee will severely impact employers' ability to hire and retain essential workers; health care systems will face worsening staffing shortages; and universities and research institutions will struggle to recruit and retain faculty and researchers, hindering innovation. The plaintiffs are represented by the nonprofit Justice Action Center. 

The U.S. Chamber of Commerce also called on the Trump administration to withdraw the $100,000 fee over concerns that it could "impede economic growth." 

Webinar: Navigating New H-1B Policy

Questions Remain

There are still many questions about the implications of the proposed fee, including: 

• Which petitions are being targeted? The proclamation restricts entry into the country, but many seeking H-1B status — foreign national students and recent graduates — are already in the U.S. Does the fee apply to them? 
• What is the process for paying the fee?  
• Which industries or occupations will be exempted? 

"There is still significant uncertainty overhanging all of these changes, which increases confusion and anxiety among HR professionals and their foreign national employees," said Xiao Wang, the co-founder and CEO of Boundless, a U.S. immigration services provider based in Seattle. "How much will be successfully challenged in courts, how much will be adjusted by the rulemaking process, or how much will the administration itself change after receiving feedback from major employers and donors?" 

Q&A: Key H-1B Changes Employers Must Know  

Reactions and Ramifications

Wang said that the shifts "mark one of the sharpest inflection points for employment-based immigration in decades. The $100,000 fee transforms H-1B sponsorship from a talent strategy into a major capital investment, and modifying the lottery to favor higher-paid roles means the landscape will tilt even further toward the largest employers and most senior positions." 

The actions reflect a multipronged effort to restrict H-1B visas, said Julia Gelatt, associate director of the U.S. Immigration Policy Program at the Migration Policy Institute in Washington, D.C. "When the Trump administration came into office in January, we saw some debate over whether the H-1B visa was a benefit to the U.S. or that it allows foreign workers to take jobs from Americans. I think we are seeing which camp won that debate, at least for now," she said.   

Employers may have gotten over the initial "shock and awe" of the White House proclamation but are very concerned about the upcoming H-1B filing season, said Andrew Wilson, an immigration attorney and partner at Lippes Mathias in Buffalo, N.Y. The project and budgetary planning for filing for next year's visa lottery has already begun. 

"If the fee is not struck down, there will be a huge reduction in the use of the program," Wilson said. "The vast majority of companies that use the program would be affected by this. They don't have that kind of money for sponsorship."   

Gelatt said that employers must be rethinking use of the visa and are uncertain about whether to begin the filing preparation process.  

"Employers can look to other visa options but many won't have an alternative to the H-1B," she said. "They can boost recruitment of U.S. workers, which is what the administration is seeking. But employers will say there are not enough U.S. workers with the skills to fill open roles." 

She added that companies may move operations overseas, increase work with remote workers based in other countries, or shift operations, "scaling back in certain areas because they can't find the workers they need to do a particular kind of work."     

While the biggest tech companies have the money to absorb the new fee and higher wages in the H-1B lottery, other users of the program including start-ups, health care systems, schools, nonprofits, and research institutions would likely be frozen out. 

In the first half of 2025, Amazon and its cloud-computing unit, AWS, received approval for more than 14,000 H-1B visas, the largest beneficiary of the year. Other top recipients include Apple, Google, Meta, and Microsoft, as well as IT consulting companies Tata Consultancy Services and Cognizant Technology Solutions.  

"Big tech can afford the fee and will use it to lock up top engineering talent," said Fraser Patterson, founder and CEO of Skillit, a marketplace that connects skilled trades workers with construction companies. "For industries like construction that rely on technical managers, it's an existential threat," he said. "The U.S. doesn't have a surplus of engineers ready to fill those roles. Instead, companies will accelerate nearshoring." 

Toolkit: Understanding and Obtaining U.S. Employment Visas

A typical H-1B visa costs companies between $3,000 and $10,000 including legal fees and administrative costs, depending on the use of premium processing and whether the petition is flagged with a request for evidence. That total also includes education and training fees and fraud prevention fees paid to the government. 

The administration's criticism of the program as it currently stands argues the potential for undercutting wages and eliminating domestic job opportunities by displacing U.S. workers with foreign labor, a significant portion of whom are sponsored by large outsourcing firms contracted to do lower-paying, entry-level work. 

Elizabeth Jacobs, the director of regulatory affairs and policy for the Center for Immigration Studies in Washington D.C., said that adding a $100,000 fee to H-1B petitions demonstrates a clear policy objective to protect the U.S. workforce against unfair labor competition in high-skill occupations.  

"Loopholes in H-1B regulations have allowed corporations to use the H-1B program as a labor cost-savings program, directly undermining domestic labor interests," she said. "These loopholes allow employers to pay foreign workers less than their American peers, hire foreign workers without first trying to hire Americans, and insulate businesses from scrutiny if they submit inaccurate labor certification applications. American workers, especially recent graduates trying to break into tech, are left competing on an uneven playing field." 

Employers Should Prepare 

For most organizations, the practical impact of the changes will be felt in preparation for next year's new H‑1B cap filings. Employers should reassess staffing plans now, consider expanding domestic recruitment, developing alternative talent sourcing pipelines, starting remote work programs, or reallocating duties internally.   

"Employers need to move fast to adapt, starting with a top-to-bottom audit of their immigration and talent strategies," Wang said. "It's also critical to factor in the new cost realities when budgeting for future roles or expansions. Companies should consider diversifying their workforce planning, exploring other visa categories, and investing in robust legal review of every step in the sponsorship process." 

Specialty Credential: U.S. Employment Immigration

Wilson said that preparing for the expected uptick in DOL investigations and enforcement is not controversial on the surface, as employers should already be in compliance. Investigators will be checking labor condition application posting compliance, public access files administration, and whether the Standard Occupational Classification code and wage level used match the employee's actual job duties and experience.  

"What's different is that they could go beyond traditional enforcement," he said. "They could potentially re-level a job and seek back pay at the higher wage level. That's a concern."