The $100,000 H-1B fee: vacated by a court, then stayed. Where employers stand now.

What the June 8 ruling held

On June 8, 2026, the U.S. District Court for the District of Massachusetts vacated the Presidential Proclamation of September 19, 2025, which had imposed a $100,000 supplemental fee on employer-filed H-1B petitions. The court's core holding was that the $100,000 payment is a tax — not an immigration restriction — and the president lacks statutory authority to impose it. The ruling also found that USCIS's implementation of the fee violated the Administrative Procedure Act because no notice-and-comment rulemaking preceded it.

The case, State of California, et al. v. Mullin, et al. (Docket No. 26-01699), was filed in December 2025 by a coalition of twenty states. The proclamation had taken effect in September 2025 with a stated sunset of September 2026. Within six months of the lawsuit being filed, the district court ruled against the government.

Why the fee is a tax, not an immigration restriction

The executive branch argued the $100,000 requirement fell within the president's broad authority under the Immigration and Nationality Act to restrict the admission of aliens. The court rejected that framing. Congress holds the constitutional power to impose taxes; the executive branch can collect fees sufficient to recover the cost of services rendered, but not revenue-raising levies that exceed those costs. A $100,000 charge on top of existing USCIS filing fees — which already cover the cost of adjudicating an H-1B petition — does not qualify as a cost-recovery fee. The court found it was a tax imposed without congressional authorization.

The APA violation followed from the same facts. A rule with the force and effect of law must go through notice-and-comment rulemaking before it takes effect. USCIS implemented the proclamation's fee requirement through internal guidance rather than a formal rulemaking, which the court found independently unlawful.

The stay — how it happened and what it means

Four days after the June 8 vacatur, the district court stayed its own order. The court gave the government until June 18 to seek further relief from the First Circuit. The government met that deadline — DOJ filed an emergency stay motion with the First Circuit on June 18 — and the First Circuit's acceptance of the motion, without yet ruling against it, means the stay remains in effect.

The practical consequence is that the June 8 vacatur never took operational effect for any meaningful period. Employers who had pending petitions during the window between June 8 and the stay are in an uncertain position until the appellate court resolves the underlying question. For most, the safest assumption is that USCIS will continue to require the fee for filings submitted during that window.

Where the First Circuit appeal stands

The government's stay motion argues three things: likelihood of success on the merits of the appeal, irreparable harm if the fee cannot be collected while the case proceeds, and that the balance of equities and public interest favor maintaining the fee during litigation. The government's merits argument characterizes the $100,000 requirement as an immigration restriction — a condition on the terms of H-1B admission — rather than a tax, and argues the September 2025 proclamation falls within the president's INA authority to regulate alien admission.

The First Circuit has not yet ruled on the stay motion. A ruling in either direction could come at any time. If the First Circuit denies the stay, employers would no longer be required to pay the fee while the appeal proceeds. If the First Circuit grants the stay — the more likely outcome given the district court itself stayed its own ruling — the fee remains in effect through the duration of the appellate process, which could extend well past the September 2026 stated sunset.

Coverage and exemptions — a recap

For employers currently filing H-1B petitions, the coverage rules under the September 2025 proclamation continue to apply. The $100,000 fee applies to petitions for new H-1B employment filed by employers with 50 or more total employees in the United States where more than 50 percent of those employees are in H-1B or L-1 status. The fee applies to new petitions — not to extensions, amendments without a change of employer, or cap-exempt petitions filed on behalf of nonprofit or governmental research organizations and institutions of higher education.

The fee also applied to certain consular processing cases under the September proclamation. That application remains in effect under the stay on the same terms as the domestic filing requirement.

What different outcomes mean for employers

If the First Circuit affirms the district court's vacatur: the fee is eliminated, and employers who paid it since September 2025 would have a potential claim for refunds. USCIS would need to issue formal guidance on the refund mechanism and timeline. Refund claims in this context are procedurally complex and would likely take months to process even if the legal entitlement is established.

If the First Circuit reverses: the vacatur is overturned, the fee is confirmed as lawful, and the case may proceed to the Supreme Court if certiorari is sought. Employers who did not pay the fee in reliance on the brief window after June 8 — before the stay — would face retroactive obligations, and USCIS would need to address how those cases are handled.

The September 2026 sunset creates a natural deadline. If the First Circuit does not resolve the appeal before September 2026, the proclamation expires by its own terms. The fee question becomes moot for new filings after that date. The refund question — for employers who paid between September 2025 and September 2026 — survives the sunset and would still need to be resolved by the courts.

The H-1B alternative calculus

For employers whose workforce composition puts them in the covered category, the $100,000 fee has been a meaningful factor in decisions about whether to file new H-1B petitions versus pursuing cap-exempt alternatives. O-1A visas, which are not subject to the fee, require a higher evidentiary showing but carry no cap, no lottery, and no supplemental cost. For individual employees whose records support the extraordinary ability standard, O-1A remains a structurally cleaner path regardless of how the First Circuit resolves the fee litigation.

If your organization is navigating H-1B filing decisions in light of the fee litigation, see USIA's overview of H-1B alternatives or schedule a consultation to assess options for specific cases.