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

Key Takeaways:

• The proposed $103,265 fee would be separate and in addition to all other H-1B fees.
• The proposed fee would apply to all H-1B cap-subject petitions, including regular cap petitions as well as petitions filed under the master’s cap.
• As drafted, the proposal could be read to apply to any cap-subject petition filed after the effective date of a final rule, regardless of the beneficiary’s circumstances, unless otherwise clarified.
• The proposed fee would not apply to cap-exempt petitions, including petitions from cap-exempt employers such as universities, nonprofit or governmental research organizations and/or entities affiliated with higher education or research.
• It is unclear, as the proposal does not expressly address, whether the fee would apply to H-1B extensions, amendments, change-of-employer petitions or other petitions filed for individuals who were previously counted against the cap.

Overview

On August 25, 2026, the Department of Homeland Security (DHS) published a proposed rule that would impose a new $103,265 filing fee on all H-1B cap-subject petitions, including petitions filed under the advanced degree exemption (master’s cap).[1] The proposed fee would be paid at the time of filing and would be in addition to all existing H-1B filing fees and other payment obligations imposed by law.

According to DHS, the fee is intended to recover a portion of the federal government’s costs of administering the immigration system across multiple agencies, including U.S. Citizenship and Immigration Services (USCIS), the Department of State (DOS), the Department of Labor (DOL) and components of the Department of Homeland Security and Department of Justice.

The proposal follows litigation[2] that resulted in a federal court vacating the Trump Administration’s prior $100,000 H-1B fee imposed through Presidential Proclamation 10973, “Restriction on Entry of Certain Nonimmigrant Workers” (Sep. 19, 2025). DHS is now attempting to justify the new fee under USCIS’s fee-setting authority in the Immigration and Nationality Act rather than through presidential proclamation authority.

Cap-exempt petitions would not be subject to the proposed fee, including filings by universities, nonprofit or governmental research organizations, and/or entities affiliated with higher education or research. However, the proposed rule does not expressly address whether the fee would apply to H-1B extensions, amendments, change-of-employer petitions or other filings for beneficiaries who have already been counted against the cap. Although there is discussion in the proposed rule’s background section where DHS recognizes longstanding cap-exemption principles applicable to extension and change-of-employer petitions, DHS does not expressly confirm this interpretation, and additional clarification may be provided in a final rule or future agency guidance.

DHS expressly states that the new fee would be “in addition to any other applicable fees or payments,” including standard H-1B filing fees and any separate payment obligations imposed by presidential proclamation. Accordingly, if Presidential Proclamation 10973 ultimately survives ongoing litigation, employers could potentially face both the proclamation-based $100,000 fee payment and the new $103,265 DHS fee for the same filing. DHS expressly acknowledges that both obligations could apply simultaneously.

Potential Legal Challenges

The proposal is likely to face significant scrutiny. DHS asserts that the fee is authorized under INA § 286(m), which permits the agency to set sufficient fees to recover the costs of providing immigration adjudication and related services. DHS is likely to face challenges to its legal authority and the methodology used to justify a six-figure charge imposed on a narrow class of employers.

What Employers Should Consider

Although the public comment period has now closed, employers that rely on H-1B talent should continue closely monitoring developments and consult with experienced immigration counsel. Several key issues remain unresolved and may be addressed in a final rule, agency guidance or future litigation, including:

1. Whether extensions, amendments and portability petitions will be exempt from the fee;
2. Whether the fee will apply only to first-time cap-subject filings;
3. DHS’s legal authority to impose a fee of this magnitude;
4. The economic impact on employers, particularly smaller businesses and startups; and
5. The interaction between the proposed fee and Presidential Proclamation 10973.

Employers with anticipated H-1B hiring needs for future cap seasons should assess the potential financial impact of the proposal and consider contingency planning should DHS finalize the rule substantially as proposed. If you have any questions, contact your Dinsmore immigration attorney.

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[1] United States, Department of Homeland Security, “Fee for Certain H‑1B Petitions,” 91 Fed. Reg. 52,345 (Aug. 25, 2026) (proposed Aug. 25, 2026) (to be codified at 8 C.F.R. pt. 214).

[2] State of California v. Mullin, No. 1:26-cv-10452 (D. Mass. June 8, 2026) (holding that fee functioned as an unconstitutional tax that exceeded executive authority and violated the Administrative Procedure Act).