EXECUTIVE SUMMARY
A federal district court recently ruled that the President cannot impose a $100,000 H-1B filing fee. But employers should not celebrate yet. The district court stayed its order, and an appeal is pending. Consequently, the payment requirement remains operational. Employers must continue to budget for this extraordinary cost while the First Circuit Court of Appeals reviews the case.
The 2025 Proclamation: President Trump Directs a Six-Figure Surcharge
On September 19, 2025, President Trump issued a proclamation titled “Restriction on Entry of Certain Nonimmigrant Workers.” The proclamation directed a $100,000 payment for covered new H-1B petitions filed after 12:01 a.m. EDT on September 21, 2025. This fee chiefly targeted cases involving foreign professionals abroad who required visa issuance and entry.
This massive government charge disrupts recruitment for hard-to-fill roles in technology, research, education, and healthcare. A six-figure penalty can turn a viable hire into an impossible one. Universities, health systems, startups, and small businesses face the heaviest burden.
Separation of Powers: Twenty States Challenge the Surcharge
Twenty states sued the federal government in the U.S. District Court for the District of Massachusetts. In State of California v. Markwayne Mullin, the states argued that the $100,000 charge violated the separation of powers and the Administrative Procedure Act (APA). They asserted that the executive branch bypassed Congress to impose an unlawful tax.
The June 2026 Ruling: The District Court Strikes Down the Fee
On June 8, 2026, a federal judge ruled in favor of the states. The court held that the executive branch cannot use immigration authority to impose a $100,000 charge. Specifically, the decision drew a sharp line between the president’s power to restrict entry under Section 212(f) of the Immigration and Nationality Act (INA) and Congress’s exclusive power to tax. Although the president may control entry, the president cannot levy taxes. The court concluded that the $100,000 charge was a tax, meaning only Congress had the power to enact it.
The Government Appeals: The Stay Keeps the Surcharge Operational
Despite this significant check on executive power, the fee has not disappeared. The government appealed the district court’s decision. On June 18, 2026, the government asked the First Circuit Court of Appeals to keep the district court’s judgment stayed during the appeal.
As of July 17, 2026, the appeal remains pending, and the administrative stay continues to control the practical result. Covered petitioners must still pay the $100,000 fee. Employers must monitor the First Circuit docket, USCIS guidance, and revised White House instructions before each filing.
Actionable Advice: How Employers Should Handle the Ongoing Fee
Employers must navigate this uncertain period with care. We recommend taking four concrete steps:
- Analyze Coverage: Before filing, determine whether the September 2025 Proclamation and current agency guidance cover your specific H-1B petition.
- Model Both Outcomes: Budget for the $100,000 charge where it may apply. Do not make hiring or travel commitments based solely on the district court victory.
- Preserve Meticulous Records: Confirm payment instructions and document all employer decision-making. Preserve receipts and documents that may support any later refund claim or legal challenge.
- Coordinate Travel with Counsel: H-1B workers should coordinate travel and consular plans with counsel because entry-related rules can change quickly.
The district court’s ruling is a powerful defense of the separation of powers. However, until the First Circuit decides the appeal or lifts the stay, employers must continue to budget and plan for this historic fee. Rely on counsel to tailor filing strategies to your specific business needs.
