Why the New H-1B Fee Proposal Is Bad Policy
The Department of Homeland Security has proposed a dramatic new fee hike that could fundamentally change the economics of hiring skilled foreign workers in the United States.
Under the proposal, employers filing certain new H-1B petitions subject to the annual H-1B lottery would have to pay an additional $103,265 government fee for each petition. The fee would be on top of the existing H-1B filing fees and other required costs. The proposal would apply to both the regular H-1B cap and the additional cap reserved for qualifying U.S. master’s degree graduates. At this time the proposed fee is just that- a proposa with a public comment period that runs through September 24, 2026. DHS would have to issue a final rule before the fee could take effect. But even as a proposal, it deserves serious attention.
The H-1B program is already expensive and complicated. Employers pay thousands of dollars in government filing fees, attorney fees, and other expenses to sponsor an employee.
Adding another $103,265 for a single new H-1B worker would take the cost to an entirely different level. And this is not a one-time fee paid by the worker. It would be imposed on the U.S. employer when the employer files the H-1B petition. Consider a small business that wants to hire three highly qualified employees who have each been selected in the H-1B lottery. Under the proposal, the new fee alone would cost the company more than $309,000. That is not a minor administrative expense. For many businesses, it is the difference between making a hire and deciding not to hire someone at all.
There is a legitimate policy debate about how the United States should structure the H-1B program. Employers should be required to pay appropriate wages, and the government should enforce the rules against fraud and abuse. But making it cost more than $100,000 simply to sponsor one highly skilled employee is a blunt instrument. The H-1B program is used by American businesses to recruit engineers, scientists, technology professionals, accountants, architects, medical professionals, and other specialized workers. Many of these individuals are already educated and working in the United States when they enter the H-1B process. In particular, the proposal could have a significant impact on international students who graduate from U.S. universities and then work for American companies through OPT or STEM OPT before seeking H-1B status. Under the proposed rule, an American company could effectively be told:
You can hire this graduate—but if you want to keep them long-term, the government wants another $103,265. That creates a powerful incentive for businesses to reconsider the hire. And that is where the policy begins to work against itself.
Businesses do not have to hire someone through the H-1B program.
If sponsoring an employee suddenly costs an additional $103,265, an employer may decide to:
- Hire a different candidate;
- Leave the position unfilled;
- Move the position outside the United States;
- Establish or expand operations overseas; or
- Ask a foreign employee to remain abroad rather than bring that employee to the United States.
DHS itself has acknowledged that a fee at this level could substantially reduce demand for H-1B petitions. That should concern anyone who cares about American competitiveness. The goal should be to encourage companies to invest, hire, innovate, and grow in the United States. A policy that makes it dramatically more expensive to hire specialized talent risks encouraging the opposite.
Large multinational corporations may be able to absorb a six-figure immigration expense. A small technology company, engineering firm, medical practice, architectural firm, or startup may not. Imagine a growing Arizona technology company that identifies an exceptional software engineer who graduated from an American university. The candidate is already living in the United States, already working legally under OPT, and has developed valuable skills for the company. The company wants to retain that employee. Under the proposed system, however, the company could face an additional $103,265 simply to file the H-1B petition after the employee is selected in the lottery. For a Fortune 500 company, that may be an unpleasant expense. For a 25-person company, it could be prohibitive.
That creates another unintended consequence: the policy may favor the largest companies while making it harder for smaller American businesses to compete for talent.
It could also push talent to other countries. The United States is not the only country competing for highly educated workers. Canada, the United Kingdom, Australia, and countries throughout Europe and Asia have increasingly developed immigration programs designed to attract skilled workers, entrepreneurs, scientists, engineers, and international graduates. These countries understand something important:
Talent is mobile.
A foreign student who has spent years studying at an American university may want to stay in the United States—but that person also has options. Likewise, an international company deciding where to locate a new research facility, technology operation, or engineering team can choose between jurisdictions. If the United States makes it dramatically more expensive to employ international talent here, other countries may be more than happy to welcome those workers and the businesses that employ them. That is not a winning strategy for American competitiveness.
If the government believes the H-1B program needs reform, there are plenty of reasonable areas to focus on. Enforce wage requirements. Investigate fraud. Target employers that abuse the program. Improve the lottery.
Give priority to workers with advanced degrees, specialized skills, or particularly high salaries. Make the system faster and more predictable for legitimate employers.
Those are policy discussions worth having. But a $103,265 price tag on a single employee is difficult to justify as a reasonable immigration filing fee.
DHS says the proposed fee is intended to generate revenue to help support the broader administration of the immigration system. The proposal reportedly could generate billions of dollars annually.
That raises an obvious question: Should the cost of administering the entire immigration system really be placed on an employer trying to hire one highly skilled worker?
From an immigration attorney’s perspective, that is a difficult proposition to defend.
For now, employers should not panic. The $103,265 fee is proposed, not final. Employers should continue following the H-1B rules currently in effect.
The proposed rule is also likely to face significant legal scrutiny if DHS ultimately moves forward with it. A previous $100,000 H-1B payment requirement imposed by the administration through a presidential proclamation has already been the subject of significant litigation, including a federal court ruling against the government. The new proposal is being pursued through a different regulatory process, so the legal issues are not identical—but additional litigation is certainly possible.
In the meantime, employers that regularly sponsor H-1B workers should be evaluating how a potential six-figure filing cost could affect their hiring and immigration strategies.
The Bottom Line
America has historically benefited enormously from attracting talented people from around the world.
Many immigrants who came to the United States as students, engineers, scientists, entrepreneurs, physicians, and other professionals have gone on to build companies, create jobs, develop new technologies, conduct research, and contribute to communities across the country. That does not mean the H-1B program should be immune from reform. But making it cost an employer more than $100,000 to hire one employee is not the kind of reform that makes American businesses more competitive.
It risks making the United States less attractive to talented workers, more expensive for employers, and less competitive against other countries fighting for the same global talent.
At a time when American businesses are competing in a global economy for the world’s best and brightest, putting a six-figure price tag on access to that talent seems less like an investment in American workers—and more like a self-imposed competitive disadvantage.