DHS Proposes Unprecedented $103,265 Fee for H-1B Cap-Subject Petitions

The Department of Homeland Security (DHS) has proposed a sweeping new rule that would impose an additional $103,265 fee on every H-1B petition subject to the annual statutory cap. If finalized, the proposal would represent one of the most dramatic increases in the cost of employing H-1B professionals in the program’s history and could fundamentally reshape how U.S. employers recruit and retain highly skilled foreign talent.

The proposal is just that—a proposed rule. It is not currently in effect, and employers should not assume that the fee will ultimately be implemented in its current form. The proposed regulation is scheduled for publication in the Federal Register on August 25, 2026, after which DHS will accept public comments for 30 days. DHS must review those comments and issue a final rule before the new fee can take effect. Significant litigation is also likely if DHS proceeds with the proposal.

The Proposed $103,265 Fee

Under the proposed rule, employers filing H-1B petitions subject to the annual cap would be required to pay an additional $103,265 per petition, on top of existing H-1B filing fees and other applicable charges.

The proposal would apply to:

• H-1B petitions filed under the regular annual cap of 65,000;
• H-1B petitions filed under the 20,000 advanced-degree exemptions (commonly referred to as the “master’s cap”)

The fee would reportedly be payable at the time of filing and would apply regardless of the employer’s size, revenue, or nonprofit status if the petition itself is cap-subject.

The fee would not apply to: 

• H-1B extension petitions
• H-1B change of employer petitions
• H-1B amended petitions

DHS estimates that approximately 85,000 cap-subject H-1B petitions would be subject to the fee annually and that the proposal could generate approximately $8.8 billion per year in revenue. According to DHS, the revenue would help recover costs associated with administering the federal immigration system, including immigration benefit adjudications, fraud detection, national security vetting, systems modernization, immigration court operations, consular processing, labor standards enforcement, and interagency coordination.

Cap-Exempt Employers Would Not Be Subject to the Proposed Fee

Importantly, the proposed fee would not apply to H-1B petitions that are exempt from the annual numerical cap.

This generally includes qualifying petitions filed by:

• Institutions of higher education;
• Certain nonprofit entities related to or affiliated with institutions of higher education;
• Nonprofit research organizations; and
• Governmental research organizations.

Accordingly, the proposal could create an even more significant cost differential between cap-subject private-sector employers and institutions or organizations eligible for cap-exempt H-1B classification.

The Proposal Is Not Yet Law

Employers should emphasize an important point: the proposed $103,265 fee is not currently in effect.

The rulemaking process generally requires DHS to:

1. Publish the proposed regulation;
2. Provide the public an opportunity to submit comments;
3. Review and consider the comments received;
4. Address significant issues raised during the rulemaking process; and
5. Publish a final rule before the regulation becomes effective.

The 30-day public comment period is expected to begin upon formal publication of the proposed rule on August 25, 2026. Interested employers, universities, industry organizations, professional associations, and other stakeholders should carefully consider submitting comments supported by concrete evidence concerning the proposal’s economic, workforce, and operational consequences.

A Potentially Transformative Impact on H-1B Hiring

A fee exceeding $100,000 per cap-subject petition would represent a fundamental change in the economics of the H-1B program.

For large multinational employers, the fee could add tens or hundreds of millions of dollars in annual immigration costs. For startups, emerging companies, small and medium-sized businesses, and employers seeking only a handful of specialized professionals, the fee could effectively make H-1B sponsorship financially impossible.

The proposed fee could also affect international students and other foreign nationals already in the United States who are selected in the H-1B lottery and whose employers would be required to file a cap-subject petition.

DHS has indicated that the proposal is intended, in part, to discourage employers from hiring H-1B workers unless there is a legitimate need for specialized skills and no appropriate alternative. The agency also contends that employers filing cap-subject H-1B petitions generally have a greater ability to absorb substantial immigration costs.

Relationship to the Previously Vacated $100,000 H-1B Fee

The new proposal must also be understood in the context of the administration’s earlier attempt to impose a $100,000 H-1B-related payment through presidential action.

That earlier fee was challenged in federal court and, according to current reporting, was blocked in June 2026. The administration is now pursuing a regulatory approach through DHS that seeks to establish a $103,265 fee through the formal rulemaking process.

The distinction is legally significant. A formal notice-and-comment rulemaking process may address some of the procedural concerns associated with the earlier action, but it does not eliminate potential challenges concerning DHS’s underlying statutory authority to impose such an extraordinary fee or to use H-1B filing revenue to support broader governmental immigration operations.

Legal Challenges Are Likely

If DHS finalizes the rule substantially as proposed, litigation is highly likely.

Potential legal challenges may include arguments that:

• DHS lacks statutory authority to impose a fee of this magnitude;
• The charge exceeds permissible cost-recovery authority and functions as an unauthorized tax;
• The fee improperly funds governmental activities that are not sufficiently connected to the adjudication of H-1B petitions;
• The agency failed adequately to justify the amount of the fee;
• The agency did not adequately consider the proposal’s impact on small businesses, labor markets, innovation, and U.S. competitiveness;
• The rule is arbitrary and capricious under the Administrative Procedure Act; or
• The proposal implicates broader constitutional or appropriations-law concerns because of the scale and intended use of the projected revenue.

The fact that the government seeks to generate approximately $8.8 billion annually from a single immigration filing category will likely place the statutory authority and cost-recovery rationale supporting the rule at the center of any future litigation.

What Employers Should Do Now

Because the proposal is not yet final, employers should avoid making immediate assumptions that the $103,265 fee will necessarily apply to the next H-1B cap season. At the same time, employers should begin evaluating the potential consequences of the proposal.

Employers may wish to:

• Review anticipated FY 2028 H-1B hiring needs;
• Identify positions and candidates that may depend on cap-subject H-1B sponsorship;
• Evaluate whether alternative immigration options may be available;
• Consider the potential financial impact of a six-figure filing fee;
• Monitor the final rulemaking process and public comments;
• Consider submitting evidence-based comments to DHS during the public comment period; and
• Follow anticipated litigation closely if DHS issues a final rule.

Potential alternatives will depend on the individual circumstances of the employer and foreign national and may include classifications such as O-1, TN, E-3, H-1B1, L-1, or, in appropriate circumstances, employment-based permanent residence strategies.

Conclusion

DHS’s proposal to impose an additional $103,265 fee on H-1B cap-subject petitions represents a potentially historic change to the H-1B program. If implemented, the fee could substantially restrict access to the H-1B program for startups, smaller employers, and companies that depend on specialized international talent.

However, the proposal is not yet law. DHS must complete the notice-and-comment rulemaking process before the fee can take effect, and substantial legal challenges should be expected if the agency finalizes the regulation.

For now, employers should closely monitor the rulemaking process, consider submitting comments supported by real-world data, and begin contingency planning for the possibility that the H-1B cap process may become dramatically more expensive.

We will continue to monitor developments regarding the proposed H-1B fee, the public comment process, and any resulting litigation.

This bulletin is current as of August 24, 2026. It is intended for general informational purposes only and does not constitute legal advice. Immigration strategies and the applicability of any future rule depend on the specific facts and circumstances of each case.