DHS Proposes New $103,265 Fee for H-1B Cap Petitions: What Employers Need to Know

In a move that could dramatically alter the economics of hiring foreign talent in the United States, the Department of Homeland Security (DHS) has proposed a new $103,265 filing fee for H-1B cap-subject petitions. If implemented, the fee would apply to all H-1B petitions filed under the annual cap, including those eligible for the advanced-degree exemption, and would be charged in addition to all existing filing fees.

While the proposal has already generated significant concern among employers, it is important to note that the fee is not currently in effect. The proposal is in the notice-and-comment stage, and DHS is accepting comments through September 24, 2026.

What Does the Proposed Rule Do?

Under the proposed regulation, employers filing an H-1B cap-subject petition would be required to pay a new $103,265 fee at the time of filing, in addition to all other applicable government filing fees. DHS estimates that the fee would generate approximately $8.8 billion annually and would be used to recover costs associated with administering the broader lawful immigration system.

Notably, the fee would apply only to:

• Regular cap-subject H-1B petitions; and
• H-1B petitions filed under the advanced degree exemption (commonly referred to as the "master's cap").

The fee would not apply to:

• Cap-exempt H-1B petitions filed by institutions of higher education, qualifying affiliated nonprofit entities, nonprofit research organizations, or governmental research organizations;
• H-1B extension petitions;
• H-1B amendment petitions; or
• H-1B change-of-employer petitions.

Accordingly, the proposed fee is narrowly targeted at new cap-subject H-1B filings, while employers filing extensions, amendments, transfers, or cap-exempt petitions would remain subject only to the standard H-1B filing fees.

Why Is DHS Proposing the Fee?

Perhaps most notably, DHS does not justify the fee based on the cost of adjudicating an individual H-1B petition. Instead, the agency proposes using H-1B cap filings as a funding mechanism to support a broad range of immigration-related government functions across multiple federal agencies. This represents a significant departure from the traditional fee-for-service model generally associated with immigration benefit requests and is likely to be a focal point of public comments and any legal challenges that may arise if the rule is finalized.

For employers, this distinction is significant because the proposed fee is not intended merely to cover the cost of processing an H-1B petition, but rather to help fund broader immigration-system operations across the federal government.

Potential Impact on Employers

If finalized as proposed, the rule would substantially increase the cost of sponsoring foreign national talent through the H-1B cap process.

For many employers, the proposed fee could raise questions regarding:

• Future workforce planning and budgeting;
• The viability of sponsoring early-career professionals and recent graduates;
• Use of alternative visa classifications where available;
• Global workforce deployment strategies; and
• Long-term talent acquisition models.

The impact may be particularly significant for employers that rely heavily on annual H-1B cap filings to fill specialized technical, engineering, healthcare, financial, and professional services roles. For some positions, the proposed fee could significantly exceed traditional recruiting and relocation costs, prompting employers to reevaluate the economics of sponsorship for entry-level talent.

Employers may also revisit global talent deployment strategies, including whether certain functions can be performed remotely from outside the United States, whether alternative visa classifications are available, and whether hiring plans should otherwise be adjusted to reduce reliance on the annual H-1B cap process.

In addition, employers would still be responsible for existing H-1B-related filing fees, including the Form I-129 filing fee, ACWIA fee, fraud prevention and detection fee, asylum program fee, and premium processing fee (if elected). This could be in addition to the $100,000 H-1B fee, applicable in certain situations, which is currently being challenged in court.

Will the Rule Take Effect?

At this stage, the answer is uncertain.

The proposal must proceed through the standard federal rulemaking process. Following the close of the comment period, DHS will review submitted comments and determine whether to issue a final rule. If a final rule is published, DHS would then establish an effective date.

Even if finalized, legal challenges are widely anticipated given the unprecedented size of the proposed fee and its stated purpose of funding broader governmental immigration functions. Litigation could delay implementation or affect the final scope of the rule.

Accordingly, employers should view the proposal as a significant development worthy of close monitoring, but not as an immediate change to current H-1B filing requirements.

What Should Employers Do Now?

While no immediate action is required, employers may wish to:

1. Monitor developments in the rulemaking process.
2. Evaluate anticipated H-1B hiring needs for upcoming fiscal years.
3. Consider submitting comments, either individually or through industry associations particularly if the proposed fee could have a material impact on recruiting, workforce planning, budget forecasting, or business operations.  Comments may be submitted through September 24, 2026.
4. Review alternative immigration strategies where appropriate.
5. Assess potential budgetary implications should the rule ultimately be implemented.

Employers that regularly use the H-1B cap process should also stay in close contact with immigration counsel as DHS's proposal evolves.

Looking Ahead

The proposed $103,265 H-1B cap fee represents one of the most consequential immigration-related fee proposals in recent memory. Whether DHS ultimately finalizes the rule, modifies it substantially, or faces successful legal challenges remains to be seen. For now, employers should continue planning under the current H-1B framework while monitoring further developments closely. Beyond the headline figure, the proposal raises broader strategic questions for employers. Organizations that depend on the H-1B cap process may wish to assess how the fee could affect recruiting budgets, campus hiring programs, workforce planning, and long-term talent acquisition strategies. Although the proposal is far from final, employers should begin evaluating the potential business impact now and consider whether participation in the rulemaking process is warranted.

Seyfarth Shaw will continue to monitor this proposal and provide updates as additional information becomes available.