Legal Challenge to New $100,000 H‑1B Visa Fee

Overview

A federal lawsuit was filed today challenging the legality of the recently issued Presidential Proclamation that imposes a $100,000 fee on new H‑1B petitions for foreign workers seeking initial entry into the U.S. The complaint, filed by multiple states, businesses, and affected individuals, argues the Proclamation exceeds the President’s legal authority and violates multiple federal laws and constitutional principles.

This bulletin outlines the legal challenge, potential outcomes, and how employers should assess risk and prepare for rapidly evolving developments.

Background: The H‑1B Fee Rule

• Effective Date: September 21, 2025
• Fee Amount: $100,000 per new H‑1B petition for workers outside the United States
• Applicability: Does not apply to extensions, amendments for individuals already in the U.S.
• Legal Basis Challenged: Plaintiffs argue the fee violates the Administrative Procedure Act (APA), due process, and the constitutional separation of powers.

Key Questions and Possible Outcomes

1. Will the $100,000 H‑1B Fee Be Blocked by the Court?

Short-term likelihood: Moderate to High

• Plaintiffs have requested an immediate injunction to halt enforcement of the fee.
• The court may be persuaded by arguments that the fee was implemented without proper rulemaking and lacks clear statutory authority.
• A ruling on the preliminary injunction is expected within weeks.

If granted: Employers may file new H‑1B petitions without paying the fee while litigation is pending.

If denied: The fee remains in effect; employers must pay it for eligible petitions.

2. Could the Fee Be Permanently Invalidated?

Medium-Term Likelihood: Moderate

• The plaintiffs’ case is legally substantial, citing:
• Absence of congressional authorization (under the major questions doctrine).
• Lack of notice-and-comment rulemaking.
• Unprecedented scale of the fee.
• However, courts often defer to executive authority in immigration matters.
• Final judgment could take several months, with appeals likely.

3. What If the Court Narrows the Rule Instead of Overturning It?

• Relief could be limited to the specific plaintiffs or types of employers (e.g., small businesses, nonprofits).
• The court may uphold part of the rule but strike down aspects deemed vague, excessive, or unlawful.

Legal Risk Business Impact

• Injunction Denied: Fee must be paid for all new qualifying H‑1B petitions immediately.
• Rule Partially Upheld: Employers may face inconsistent fee rules depending on petition type.
• Rule Overturned on Appeal: Fee may be invalidated months later, but refunds uncertain.
• Rule Modified via Guidance: USCIS may issue updates that limit or clarify who is affected.

Recommended Employer Actions

1. Assess Urgency of New Filings

• If filing immediately, prepare to pay the fee unless/until blocked.
• If possible, defer filings until after the injunction ruling.

2. Monitor Legal Developments Closely

• Expect updates in the coming 2–4 weeks that could alter filing strategy.

3. Budget Conservatively

• Consider worst-case budgeting for $100,000 per new petition until litigation resolves.

4. Explore Visa Alternatives

Evaluate options such as:

• L‑1, O‑1, or TN classifications (where available).
• Global staffing models.
• Permanent residence sponsorship for advanced degree candidates.

What to Expect Next

Timing

Court ruling on preliminary injunction: October–November 2025

• Could temporarily block fee.
• Expect government response and defense.

Mid to late October:

• May signal intent to modify rule.
• Appeal by either party.

Late 2025–early 2026:

• Adds legal uncertainty.
• Final court decision.

Mid to late 2026: Will determine long-term fate of the fee.

Q&A Summary

• $100K H‑1B fee effective? Yes, as of Sept. 21 (pending court ruling).
• Applies to all H‑1Bs? No – only new petitions for workers outside the U.S.
• Court likely to block it? Possibly – strong legal challenge pending.
• Refunds if fee struck down? Uncertain – depends on timing and court relief.
• Should we file now? Depends on urgency, budget, and risk tolerance.

Conclusion

Employers should:

• Monitor the litigation closely (next 2–4 weeks are critical).
• Coordinate with immigration counsel before initiating any new H‑1B entry petition.
• Prepare for budgetary and workforce planning scenarios depending on outcome.
•  Document any potential harm (delays, lost talent, increased costs) in case future relief or refunds are available.