The Department of Homeland Security has proposed a new H-1B petition fee months after its prior attempt to raise the bar for visa employment was frozen by the courts.
Unveiled Monday and published in the Federal Register Tuesday, the proposed rule sets a $103,265 fee for H-1B petitions, which would typically cost an employer between $2,000 and $3,500 under prior policy.
H-1B visa approvals for private employers, with some exceptions, are capped by statute at $65,000 per year, with another 20,000 available to holders of advanced degrees. The newly proposed fee would apply to petitions for those 85,000 slots, sparing cap-exempt organizations such as institutions of higher education and their nonprofit affiliate healthcare organizations.
Unlike the prior $100,000 fee—which was proposed last year, challenged by 20 attorneys general and blocked a few months back—DHS said the objective of its fee is not merely a monetary penalty barrier for foreign employment, but “revenue generation to support the costs of administering the lawful immigration system across multiple departments and agencies.”
Of note, Chris Thomas, a partner at Holland & Hart whose practice includes immigration services, told Fierce Healthcare the new $103,265 fee would apply to many workers who are already living in the country, as opposed to the blocked fee, which was applied to application submissions filed from abroad.
"This proposal is broader than last year's $100,000 fee—it could apply even when the worker is already in the United States, such as an F-1 student moving from OPT to H-1B status," he said. "But it would not apply to extensions, transfers or cap-exempt employers like universities and research organizations."
The fee, which is a standalone from prior application expenses, is expected to raise an additional $8.8 billion per year to help cover existing costs around adjudications, investigations, IT modernization, records management and enforcement, DHS wrote. About $3 billion would go to the U.S. Citizenship and Immigration Services to help cover its existing costs, $1.1 billion to Immigration and Customs Enforcement (ICE) and nearly $3 billion to the Department of Justice’s Executive Office for Immigration Review, which would hire 8,400 new employees as immigration judges, attorneys and other law-related support functions.
“The proposed fee is specifically to recover the interagency costs described in this rule and having a standalone fee is intended to facilitate tracking, allocation, and reporting of the associated revenue,” the department wrote in the proposed rule. “For these reasons, DHS proposes to implement the $103,265 amount as a separate, additional H-1B fee rather than combining it with the existing H-1B petition fee.”
Judge Leo Sorokin, of the U.S. District Court in Massachusetts, had ruled in June that the prior $100,000 “regulatory payment” was equivalent to the imposition of a new tax “regardless of what the payment is called,” and as such exceeded the department’s authority under law.
"The administration is clearly trying to cure the defects that sank the $100,000 proclamation, this time using formal rulemaking and framing the charge as cost recovery," Thomas said. "But the court's core problem was that the fee functioned as an unlawful tax, and relabeling it doesn't necessarily fix that. If the rule is finalized, expect litigation almost immediately."
DHS, in the proposed rule, cited statute that authorizes the department to set “fees for providing adjudication and naturalization services … at a level that will ensure recovery of the full costs of providing all such services.”
Though the revenue generation is front and center of the proposed rule, DHS wrote that it believes its planned policy would “have indirect benefits” in line with the justification outlined in last year’s fee proposal.
“DHS believes that U.S. employers, if required to pay an additional $103,265 fee when filing an H-1B cap-subject petition, would be less likely to hire an H-1B worker over a qualified and highly-skilled American worker unless the need is legitimate and they have no alternative for obtaining the specialized skills of the employee,” the department wrote.
Those legitimate needs are rife throughout the healthcare industry. Hospitals and other stakeholders have told the administration in prior comments and statements that visa sponsorship is necessary to meet the high demand for care services. About 8,500 H-1B visas ultimately went to workers in medicine and health occupations during the 2024 fiscal year, and the attorneys general who pushed for a block on the prior $100,000 fee argued that the policy would broadly exacerbate those workforce shortages.
Public comment on DHS’ proposed rule is open for 30 days. As such, Thomas noted that there's still plenty of time for changes to its amount and scope, let alone any litigation.
"No one is paying this fee today," he said.