The Department of Homeland Security dropped a number on the H-1B program this week that even seasoned immigration lawyers had to read twice: $103,265. That is the additional fee DHS proposed on August 24-25, 2026 for every single cap-subject H-1B petition, on top of every fee already on the books. Buried in the rule’s own footnotes is a detail that deserves far more attention than it has gotten so far: DHS says this new fee is separate from, and stacks on top of, the $100,000 payment currently required under a Trump administration proclamation for H-1B workers coming from abroad — meaning that if that proclamation is still standing, or gets revived on appeal, by the time this rule takes effect, some cap-subject petitions could face a combined $203,265 in government fees on a single filing. If this rule survives the comment process and litigation, it will mark the effective end of first-time, quota-based H-1B sponsorship — not because Congress rewrote the law, but because an agency decided that $103,265, and potentially $203,265, counts as a “filing fee.”
It does not matter whether the beneficiary is sitting in Bangalore or Boston. It does not matter whether they are an F-1 student about to graduate from a U.S. university, an L-1 intracompany transferee hoping to change status, or an H-4 spouse trying to move into their own status. If the petition is subject to the 65,000/20,000 annual numerical limit, the employer will need to find $103,265 in new money before it can even submit the paperwork. That is on top of the government’s existing filing fees, the anti-fraud fee, the ACWIA training fee, premium processing if the employer wants a fast answer, and, in some cases, legal fees. Below, we walk through what DHS actually proposed, how long the public has to respond, why the agency believes it can do this, whether that belief has survived scrutiny before, and what happens next — including why this looks a great deal like the administration hedging its bets on a separate $100,000 policy that is currently losing in court.
WHAT DHS IS ACTUALLY PROPOSING?
The proposal — a Notice of Proposed Rulemaking (NPRM) styled “Fee for Certain H-1B Petitions,” DHS Docket No. USCIS-2026-0298, RIN 1615-AD20 — is scheduled for publication in the Federal Register on August 25, 2026. Stripped of the bureaucratic packaging, it does one thing: it adds a new $103,265 fee at 8 CFR 106.2(a)(3)(xii), payable at the time of filing, on every H-1B cap-subject petition, including petitions eligible for the U.S. master’s degree exemption. Petitions that are exempt from the annual cap — filings by nonprofit and governmental research organizations and institutions of higher education, for example — are not touched. Everyone else filing into the 65,000-plus-20,000 lottery is.
DHS says the fee is not aimed at H-1B beneficiaries or fraud at all, at least not directly. It is styled as a “dedicated revenue mechanism” to help fund $8.77 billion a year in immigration-system costs that DHS says are spread across USCIS, Immigration and Customs Enforcement, Customs and Border Protection, the Executive Office for Immigration Review inside the Justice Department, the State Department’s consular operations, and the Labor Department’s wage enforcement functions. Divide that $8.77 billion by the roughly 85,000 cap-subject petitions DHS projects will be filed each year, and you land, almost exactly, at $103,264.57 — rounded up to $103,265. It is a strikingly clean piece of arithmetic for a number that will strike most readers as anything but reasonable, and that precision is very much the point, which we return to below.
THE COMMENT CLOCK: 30 DAYS, THEN WHAT?
The rule’s own “DATES” section gives the public 30 days from the date of Federal Register publication to file comments through the regulations.gov portal — no mailed comments, no emailed comments, no comments handed to a USCIS official at a conference, all of which DHS says will simply be discarded as “not comments on the proposed rule.” With publication set for August 25, 2026, that puts the comment deadline at roughly September 24, 2026.
Thirty days is a short comment period for a rule of this magnitude, though not unprecedented for DHS fee rules, and it tells you something about how badly the agency wants this finished. After comments close, DHS has to review submissions, respond to significant ones, and publish a final rule — there is no statutory deadline for that step, and DHS did not commit to one in this notice. But the administration has shown, over just the last year, that it can move a fee rule from proposal to final action in a matter of months when it wants to: the EOIR fee changes required by the summer 2025 reconciliation bill went from statute to an interim final rule in a matter of weeks, and DHS’s own H.R.1 fee provisions were codified via interim final rule within months of enactment. There is every reason to expect DHS to push this one on a similarly compressed track, particularly because the agency has explicitly tied its own revenue projections to filing volume not falling short of what it has modeled — meaning every month of delay is, in the agency’s own accounting, lost revenue.
That timing matters enormously for one reason: the H-1B lottery. Registration for the FY2026 cap opened March 7, 2025; registration for the FY2025 cap opened March 6, 2024. Selection results, filing windows, and the whole annual cycle run on that early-March anchor. The FY2027 cap season has already come and gone by the time this rule was proposed. The next registration window employers will actually face — the one that will determine whether this fee applies to them — is the FY2028 cap season, which, if DHS holds to its own recent pattern, should open in the first half of March 2027. Between a September 2026 close of comments and a March 2027 registration period sits roughly six months, which is comfortably enough time for DHS to finalize this rule on the accelerated schedule it has used for its other fee actions this year. Readers should not assume this fee is speculative or years away. On the timeline DHS itself has set, it is entirely realistic that the fee will be locked in well before anyone registers for the next lottery — which means employers need to be budgeting for $103,265 per hopeful hire now, not waiting to see what happens.
THE LEGAL THEORY: “FULL COST RECOVERY”
DHS’s authority claim rests mainly on INA section 286(m), 8 U.S.C. 1356(m), which lets the Secretary set “fees for providing adjudication and naturalization services… at a level that will ensure recovery of the full costs of providing all such services,” together with section 286(j)’s general rulemaking authority to carry that out. DHS also invokes its general regulatory authority under INA 103(a) and the Homeland Security Act, and its authority under INA 214(a)(1) and 214(c)(1) to set the “time and conditions” and procedural requirements for nonimmigrant petitions.
The rule leans hard on “full cost recovery” as a term of art: because Congress told the agency to recover the “full costs” of administering the immigration system — including services provided free to some applicants, like asylum seekers — DHS argues it has latitude to reallocate those system-wide costs onto whichever population of fee-payers it decides has the greatest “ability to pay.” The rule is candid about this: it says DHS considered spreading these costs across all fee-paying applicants but chose instead to concentrate them on H-1B cap-subject petitioners specifically because those petitioners are, in DHS’s words, employers “who have more ability to pay” than other USCIS customers. In other words, this is not a fee tied to the cost of processing an individual H-1B petition. It is a slice of the entire federal immigration enforcement and adjudication budget, allocated onto one visa category because DHS has decided that category’s petitioners can afford it.
HAS THIS KIND OF FEE RULEMAKING BEEN CHALLENGED BEFORE?
USCIS’s 2024 fee schedule was finalized without a comparable court loss, suggesting DHS can survive a fee challenge if it papers the cost basis carefully enough — which is almost certainly why this NPRM runs to dozens of pages of interagency cost accounting before it ever states the number.
The employers who will actually pay this fee are the natural plaintiffs in any future challenge, and that matters for standing: they are the petitioners of record, they cannot register or file without paying, and they can point to a concrete, quantifiable injury the moment the rule takes effect — a far cleaner posture than the diffuse harms that make some immigration challenges hard to litigate.
THE $100,000 PROCLAMATION, AND WHY THIS RULE LOOKS LIKE A BACKUP PLAN?
None of this is happening in a vacuum. Since September 2025, a separate policy — Presidential Proclamation 10973, “Restriction on Entry of Certain Nonimmigrant Workers” — has required a $100,000 payment for H-1B petitions tied to workers entering, or seeking to enter, the United States from abroad, covering petitions filed between September 21, 2025 and September 21, 2026. Unlike the new NPRM, the proclamation’s fee is not limited to cap-subject petitions; it swept in cap-exempt filings too, and it turned on where the beneficiary was physically located, not on which quota category the petition fell into.
That proclamation is currently losing in court. In California v. Mullin, the U.S. District Court for the District of Massachusetts vacated the agency guidance implementing the $100,000 payment on June 8, 2026. The government appealed to the First Circuit, which denied the administration’s request to stay that ruling, and by late July 2026 USCIS had agreed to stop collecting the fee while the appeal proceeds, with merits briefing continuing into the fall. The government has signaled it may seek emergency relief from the Supreme Court, and it has said it will resume collection if the vacatur is ever lifted, so this is very much unresolved rather than dead.
Here is the detail worth sitting with: even if the proclamation somehow survives on appeal, it expires on its own terms around September 21, 2026 — unless the President extends or renews it, which he has not yet done. The NPRM’s own footnotes acknowledge as much, noting that the proclamation “will expire before the fee proposed in this rule will take effect,” and specifying that if a petitioner happens to be subject to both a proclamation-required payment and this new NPRM’s fee at the same time, they would owe both amounts, stacked. That stacking provision only makes sense if DHS is hedging against the possibility that the proclamation gets extended, renewed, or reinstated by the Supreme Court before this rule is final. Put the pieces together and the pattern is hard to miss: the administration is watching one $100,000-scale H-1B fee lose in the lower courts and, rather than bet everything on winning that appeal or extending an emergency proclamation that was always legally fragile, it is building a second, statutorily-grounded fee of nearly the same size through ordinary notice-and-comment rulemaking — a vehicle that is considerably harder to vacate on the kind of emergency, expedited basis that felled the proclamation. Only time will tell whether the administration ultimately lets the proclamation lapse in September and leans entirely on this rule, tries to extend the proclamation anyway, or ends up defending both at once.
CAN AN AGENCY DO THIS THROUGH RULEMAKING?
This is the legal question underneath all the others, and it is a real one, not just rhetorical: H-1B status and Optional Practical Training exist because Congress created them, through the INA and, in OPT’s case, through DHS regulations implementing INA provisions on student status that Congress has left largely intact for decades. An agency’s fee-setting power, even a broad one, is not the same as Congress’s power to legislate. Two lines of precedent bear directly on whether a $103,265 “fee” crosses that boundary.
The first comes from the Supreme Court’s 1974 companion decisions in National Cable Television Assn., Inc. v. United States, 415 U.S. 336, and Federal Power Commission v. New England Power Co., 415 U.S. 345 — decided under the same Independent Offices Appropriations Act framework DHS’s own rule cites as part of its fee-setting authority. The Court held that a true “fee,” as opposed to a tax, has to bear a reasonable relationship to the value of a specific benefit conferred on the specific payor; an agency cannot use fee-setting authority to fund general public benefits or activities that are not particularized to the person paying, because that would functionally be a tax, and only Congress can tax. DHS’s own framing — that this fee recovers system-wide costs across six different federal agencies and is allocated to H-1B employers largely because of their “ability to pay” rather than because of what it costs to adjudicate their specific petition — sits uneasily next to that standard. That said, agencies have real latitude here too: in Skinner v. Mid-America Pipeline Co., 490 U.S. 212 (1989), the Court upheld a broad congressional delegation of fee-setting authority under a relaxed nondelegation standard, on the theory that fee statutes carry lower separation-of-powers stakes than tax or criminal statutes. Any court reviewing this rule will have to weigh those two threads against each other.
The second line is the “major questions doctrine,” most recently applied in West Virginia v. EPA, 597 U.S. 697 (2022), and Biden v. Nebraska, 600 U.S. 477 (2023). Under that doctrine, when an agency claims the power to decide an issue of vast economic and political significance, courts require clear congressional authorization — a plausible or general textual hook is not enough. A fee that could functionally shut down access to a congressionally-created, numerically-capped visa program used by tens of thousands of employers every year, generating an estimated $8.8 billion annually, is a strong candidate for “major questions” scrutiny. The argument challengers would likely make is that section 286(m)’s general instruction to recover “full costs” is exactly the kind of ambiguous, general-purpose language the doctrine says cannot support an agency decision of this scale and consequence — that if Congress wanted an agency to be able to price a statutory visa category out of existence for ordinary employers, it would have said so in far plainer terms than a cost-recovery provision written in 1988 and 1990, decades before anyone was contemplating a six-figure per-petition fee.
None of this guarantees a court will strike the rule down, and nothing here should be read as legal advice or a prediction of how any specific court would rule — DHS plainly wrote this NPRM’s dozens of pages of interagency cost documentation with exactly this kind of litigation in mind, and Skinner gives it real room to argue for deference. But the theories exist, they are grounded in real Supreme Court precedent, and the most likely plaintiffs — employer associations and individual corporate petitioners who are directly forced to pay — are also the plaintiffs with the cleanest standing story immigration litigation usually sees.
WHEN COULD A CHALLENGE ACTUALLY BE FILED?
Realistically, not until there is a final rule to challenge — courts generally will not hear a pre-enforcement challenge to a fee that is still just proposed, since there is no final agency action yet and no one has actually been forced to pay anything. Once DHS publishes a final rule, that is the trigger. Employers, and likely employer or industry associations acting on their behalf, would have the strongest case the moment the rule’s effective date arrives, because at that point a real, unavoidable injury exists: they cannot register a beneficiary in the lottery, or file a selected registration into a petition, without paying $103,265 they otherwise would not owe. That gives potential plaintiffs a genuine incentive to move quickly and seek a preliminary injunction well before the March 2027 registration window opens, exactly as happened with the 2020 fee rule and, more recently, with the proclamation’s $100,000 payment. Whether a court grants emergency relief before that registration period is, of course, the open question — but the target for any litigant hoping to protect the FY2028 cap season is unmistakable.
WHY $103,265, SPECIFICALLY?
It is worth pausing on the number itself, because it is not $100,000, and that appears to be deliberate. DHS’s own footnotes show the math: $8,777,488,035 in projected annual interagency costs, divided by 85,000 projected fee-paying petitions, equals $103,264.57, which DHS then rounds to the nearest $5 — the same rounding convention it says it has used in prior fee rules — landing on $103,265. A round $100,000 figure, especially one appearing twice within a year for the same visa category, would look for all the world like a punitive number picked out of the air, an easy target for a court to call arbitrary and capricious, or a disguised tax rather than a genuine cost-recovery fee. An oddly specific number, tied on paper to a specific cost model with citable inputs, reads as the product of an actual calculation rather than a policy target dressed up as arithmetic — which is exactly the distinction courts look for under National Cable Television. Whether the underlying $8.8 billion cost figure and 85,000 volume assumption will themselves hold up to scrutiny during the comment period and in any eventual litigation is a separate question, and one commenters filing before the September deadline would be well advised to probe closely.
WHAT ELSE IS COMING: OPT AND THE END OF “DURATION OF STATUS”?
This rule does not arrive alone. Reporting since late July 2026 indicates DHS is separately developing a rule that would impose a fee on the order of $100,000 for Optional Practical Training, the work authorization hundreds of thousands of F-1 students use each year after graduation — a proposal that, if finalized, would layer directly on top of this H-1B fee for any F-1 graduate hoping to later win the H-1B lottery. And separately from either fee action, DHS’s final rule eliminating “duration of status” for F-1, J-1, and M-1 visa holders — replacing it with a fixed period of admission and new restrictions on changing schools and pursuing a second master’s degree — takes effect September 15, 2026. None of these three actions were coordinated as a single package before Congress, but taken together they tell a consistent story about where policy is headed for the international students who make up a substantial share of future H-1B sponsorship.
THE BIGGER PICTURE
Set the legal mechanics aside for a moment and look at what this actually does. It does not touch the 65,000-plus-20,000 numerical limit Congress set. It does not require Congress to repeal the master’s degree exemption, or the H-1B category itself, or OPT, or F-1 status. It just prices all of them out of reach for the overwhelming majority of the employers who use them, while leaving the statutes themselves nominally intact. That is a meaningfully different, and arguably more durable, kind of restriction than anything Congress has enacted or any single administration has previously tried through executive order — because a fee schedule buried in a cost-recovery rule is a much smaller, quieter target than a headline-grabbing proclamation, even though the practical effect on an F-1 graduate or a mid-size employer is functionally identical.
It is hard not to read the timing — a fee proposal landing weeks before a contested $100,000 proclamation fee expires, in the same month reporting surfaced about a comparable OPT fee, in the same year a separate rule ends duration of status for foreign students — as a coordinated, if not formally announced, effort to close off the H-1B pipeline from every direction at once, at a moment when other parts of the administration’s agenda are drawing criticism. Tariff-driven inflation and elevated oil prices tied to the conflict with Iran have both weighed on the administration’s approval numbers this year; a hardline, highly visible move against H-1B outsourcing and “foreign labor” plays well with a slice of the base that has wanted the program gutted for years, regardless of how the rest of the year’s foreign policy or economic record looks. It is a familiar pattern by now — H-1B has absorbed one restrictive regulation or executive action after another for the better part of a decade, each pitched as the fix for fraud and abuse in the program, and each landing on the entire program rather than the fraction of filings that were ever actually the problem.
That is the real proportionality question buried in this rule. DHS’s own H-1B fraud enforcement infrastructure — site visits, the Fraud Detection and National Security Directorate, targeted audits of high-risk petitioners — already exists and is already funded, in part, by the existing Fraud Prevention and Detection Account fee every H-1B employer already pays. If bad actors, concentrated overwhelmingly among a subset of staffing-firm-style filers, are the actual concern, funding more site visits and audits targeted at that population would cost a fraction of what this rule proposes to raise — plausibly in the range of tens of thousands of dollars per audit cycle, not hundreds of thousands per petition applied indiscriminately to every filer, including universities’ industry partners, hospitals, and engineering firms with no fraud history at all. A $103,265 flat tax on every cap-subject filing does not sort good actors from bad ones; it simply prices out the employers and workers who cannot absorb a six-figure hit per hire, which in practice means smaller and mid-size companies, and it does nothing to distinguish a small staffing shop from a hospital system trying to hire a specialist. Meanwhile, the H-1B beneficiaries with the most to lose from this rule are not the ones the fraud narrative is usually built around: they are F-1 graduates of U.S. universities, often trained in exactly the fields — artificial intelligence, cybersecurity, biotechnology — where the country claims it wants to keep its competitive edge, and where the domestic pipeline of graduates has not kept pace with demand. Pricing them out of the program does not eliminate the underlying employer demand for that talent; it just relocates where employers can affordably access it, at a moment when countries with mature outsourcing ecosystems are more than ready to receive that work.
It is also worth being honest about who benefited from the status quo and did little to defend it. The loudest political attacks on H-1B tend to blame the program broadly, and some of that anger is rooted in a belief — not well supported by the data, given that H-1B wages skew well above median — that foreign workers have driven up housing costs in tech hubs, a grievance that ignores how much of those cities’ growth and tax base the same workers helped build, and that would not be solved by pushing prices down, since falling home values are not a win for the homeowners already living there either. But major technology employers, who used staffing-firm-sourced H-1B labor for years to control costs and avoid the benefits and severance obligations of direct hires, largely stayed silent while smaller staffing firms took the political blame for a business model the largest companies in the country also relied on. Having quietly captured the savings, they did comparatively little to publicly defend the program’s legitimate uses or push back on the broader “H-1B is fraud” narrative — leaving the field almost entirely to critics.
None of that makes this rule good policy, and it does not resolve the legal question of whether DHS has the authority to do what it is proposing. What it does suggest is that a $103,265 fee is a blunt instrument being used to solve a narrow problem, dressed in the language of cost recovery, moving on a timeline built to beat both the courts and the next lottery. Whether it gets there — and whether it outlasts the next administration, since a rule finalized under one president can be unwound by the next — is now a question for the comment docket, and after that, for litigation.
Employers, universities, and anyone with a stake in this rule have until on or about September 24, 2026 to file comments referencing DHS Docket No. USCIS-2026-0298 through regulations.gov. Comments that cite specific data, specific portions of the rule, and specific alternatives — such as targeted audit funding instead of a flat per-petition fee — are, per DHS’s own instructions, the ones most likely to shape what, if anything, changes before this becomes final.
This article is for informational purposes and does not constitute legal advice. Employers and individuals with questions about how this proposed rule may affect a specific petition should consult qualified immigration counsel.
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