H-1B Fee Faces Court Test as 20 US States File Lawsuit

H-1B Fee: Twenty US states have filed a sweeping federal lawsuit challenging the Trump administration’s decision to impose a $100,000 fee on new H-1B visa petitions, arguing that the policy is unlawful, economically damaging, and threatens the delivery of essential public services across the country.

The legal challenge, widely referred to as the H-1B visa fee lawsuit, targets a Department of Homeland Security (DHS) policy that dramatically raises the cost for employers seeking to hire highly skilled foreign professionals. The H-1B visa programme is extensively used by hospitals, universities, public schools, and research institutions—sectors already struggling with chronic labour shortages.

H-1B Fee: States Say DHS Overstepped Its Authority

California Attorney General Rob Bonta, whose office is leading the case, said the administration lacked the legal authority to impose such an unprecedented fee without congressional approval or proper rulemaking.

“As the world’s fourth-largest economy, California understands that global talent strengthens our workforce and fuels innovation,” Bonta said.
“President Trump’s illegal $100,000 H-1B visa fee creates unnecessary financial burdens on public employers and providers of vital services, worsening labour shortages in key sectors.”

The fee was ordered through a presidential proclamation issued on September 19, 2025, with DHS applying it to H-1B petitions filed after September 21. The policy grants the Secretary of Homeland Security broad discretion to decide which applications are subject to the fee or qualify for exemptions—an approach the states argue violates both federal law and constitutional limits on executive power.

Sharp Cost Increase Raises Alarm

Currently, employers filing initial H-1B petitions pay between $960 and $7,595 in combined statutory and regulatory fees. The proposed $100,000 charge represents a seismic increase, far exceeding historical limits that tie visa fees strictly to the administrative cost of running the programme.

The lawsuit claims the policy violates the Administrative Procedure Act by bypassing required notice-and-comment rulemaking and exceeds the authority granted by Congress, which has traditionally set clear boundaries on H-1B-related fees.

H-1B Fee: Education and Healthcare at the Center of the Dispute

State attorneys general warn that the new fee would significantly worsen staffing shortages, particularly in education and healthcare, where reliance on H-1B professionals is high.

During the 2024–2025 school year, 74% of US school districts reported difficulties filling open positions—especially in special education, physical sciences, ESL and bilingual education, and foreign languages. Educators now represent the third-largest occupational group among H-1B visa holders.

Healthcare systems face even steeper challenges. In fiscal year 2024, nearly 17,000 H-1B visas were issued for medicine and health-related occupations, about half of them to physicians and surgeons. Federal projections estimate a shortage of 86,000 physicians by 2036, a gap that states argue would widen under the new fee regime.

Broad Coalition of States Joins the Case

The lawsuit was filed jointly by California and Massachusetts, led by Attorneys General Rob Bonta and Andrea Joy Campbell, and joined by counterparts from Arizona, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maryland, Michigan, Minnesota, Nevada, North Carolina, New Jersey, New York, Oregon, Rhode Island, Vermont, Washington, and Wisconsin.