Trump H-1B fee ruling throws businesses into uncertainty

The legal fight over Donald Trump’s $100,000 H-1B fee has left employers in limbo, freezing hiring plans, budgets and relocation decisions for companies that depend on specialty workers. In Dallas, Kishore Khandavalli said nearly half of his 380 employees hold H-1B visas, and the fee would have cost his software consulting firm about $1 million a year.

Trump signed the proclamation on September 19, 2025, and White House and USCIS guidance said the charge applied to new H-1B petitions filed at or after 12:01 a.m. Eastern on September 21, 2025, including the 2026 lottery. The administration said the one-time payment did not apply to previously issued visas or renewals, while also signaling broader changes, including higher prevailing wage levels and a lottery tilted toward higher-skilled, higher-paid applicants.

The uncertainty deepened after Judge Leo T. Sorokin in Boston struck down the fee on June 8 in State of California et al. v. Markwayne Mullin et al. The ruling, which came in a suit brought by 20 states, said the charge functioned like a tax Congress had not authorized and violated both the Administrative Procedure Act and the Constitution, according to reporting on the decision. The Justice Department filed a notice of appeal on June 11, and on June 13 the judge temporarily paused his own order while the administration sought an emergency appellate stay.

For employers, the damage has already been done. Khandavalli said his company has not hired new foreign workers since the policy took effect, a sign of how quickly the threat of a six-figure fee can distort recruiting and planning. Hospitals, universities and research institutions also have reason to worry: California Attorney General Rob Bonta said the fee would create a costly barrier for employers and worsen shortages in health care, education and research.

The broader debate turns on what the H-1B program is for and who gets access to it. Federal guidance describes it as a pathway for employers to hire foreign workers in specialty occupations that require at least a bachelor’s degree, while the White House argued the system had been exploited and pointed to growth in foreign STEM workers from 1.2 million in 2000 to almost 2.5 million in 2019. It also said IT workers made up more than 65 percent of H-1B workers over the last five fiscal years.

The policy shift has reached beyond boardrooms. India accounts for 73 percent of H-1B visa holders, according to Pew Research Center 2023 data cited in the coverage, and a student at the Birla Institute of Technology and Science in Pilani said the United States had long been a career goal but that he was now broadening his options as immigration rules keep changing. With the fee still tied up in court, businesses that need specialized talent are left planning around uncertainty instead of growth.