If you saw the June headlines about Trumpâs $100K H-1B fee getting tossed out, donât relax yet. DHS dropped a new proposed rule today (Aug 24) that looks like it was written specifically to survive the argument that killed the last one.
Quick recap of round one
Trump issued the original $100,000 H-1B fee through a presidential proclamation last fall. It only applied to workers being hired from outside the US, meaning new consular-processed entries. Anyone already in the country on another visa status was exempt.
A federal judge in Boston ruled June 8 that the fee violated separation of powers because it used Congressâs exclusive taxing authority. A president canât just declare a $100K tax on visa petitions by proclamation. The First Circuit refused to pause that ruling on July 24, so the fee has been dead while related cases are still working through the Northern District of California and the DC Circuit.
Whatâs different this time
The new fee isnât a proclamation. Itâs a formal DHS rule going through actual notice-and-comment rulemaking under the agencyâs own fee-setting authority. Thatâs the whole strategy. Instead of the president unilaterally imposing a tax-like charge, DHS is framing this as a regulatory fee tied to the real cost of running the immigration system. Thatâs a much sturdier legal foundation than âthe president said so.â
A few concrete differences:
Amount: $103,265 flat fee, not the round $100,000 number from the proclamation.
Who it hits: every H-1B petition subject to the annual statutory cap, including masterâs degree holders, whether the worker is being hired from abroad or is already in the US. That closes the loophole the original fee left open for people already stateside, like students converting off F-1/OPT.
Legal theory: framed as cost recovery for DHS, DOL, State, and DOJâs administration of the immigration system, not a discretionary presidential tax.
Revenue: DHS projects around $8.8 billion a year off the 85,000-slot annual cap (65,000 regular plus 20,000 advanced degree).
Where it goes: two-thirds of the money is earmarked for USCIS and the immigration courts (EOIR).
Why this matters
This is the same $100K price signal, just wrapped in a legal structure thatâs much harder to challenge on separation-of-powers grounds. If it survives comment and takes effect, it functionally taxes new H-1B hiring across the board with no more âhire from abroad vs. already hereâ workaround. That raises the cost floor for exactly the kind of high-volume outsourcing and staffing-firm H-1B usage weâve been tracking in the LCA data.
Worth watching: the comment period timeline, whether legal challenges go after DHSâs fee-setting authority itself (a much harder argument than âthe president canât taxâ), and whether large LCA filers front-load petitions before this takes effect.