The Department of Homeland Security (DHS) has announced a proposed rule that would establish a $103,265 additional fee for H-1B cap-subject petitions, including petitions for beneficiaries eligible for the U.S. advanced degree exemption.
If finalized as proposed, the fee would represent a significant increase in the cost of sponsoring an H-1B worker through the annual cap process. Importantly, however, this is currently a proposal – not a fee employers are required to pay today.
What Is DHS Proposing?
Under the proposal, employers filing H-1B petitions subject to the annual numerical cap would be required to pay an additional $103,265 at the time the H-1B petition is filed. The new fee would be imposed in addition to other applicable H-1B filing fees and payments.
According to DHS, the purpose is to recover a portion of the federal government’s costs associated with administering the lawful immigration system, including:
- Immigration benefit adjudications;
- Fraud detection and national security vetting;
- Immigration systems modernization;
- Records and fee collection operations;
- Immigration court operations;
- Consular visa processing;
- Labor standards enforcement; and
- Interagency immigration coordination.
DHS estimates that the proposed fee could generate approximately $8.8 billion annually, based on a projected annual volume of 85,000 H-1B cap-subject petitions.
Which H-1B Petitions Would Be Subject to the Proposed Fee?
The proposed $103,265 fee would apply to H-1B cap-subject petitions, including petitions for beneficiaries qualifying for the advanced degree exemption.
The H-1B program generally provides:
- Regular H-1B Cap: 65,000
- U.S. Advanced Degree Exemption: An additional 20,000 for qualifying beneficiaries who have earned a master’s degree or higher from a qualifying U.S. institution of higher education.
USCIS documentation confirms the statutory framework providing an additional exemption of up to 20,000 petitions for qualifying U.S. advanced-degree holders. Therefore, the proposed fee could affect employers sponsoring workers through both the regular cap and advanced degree allocation.
Would Cap-Exempt H-1B Petitions Be Subject to the $103,265 Fee?
According to the DHS announcement, No.
The proposed additional fee would not apply to H-1B petitions that are not subject to the annual cap.
Examples identified by DHS include petitions filed by certain:
- Institutions of higher education;
- Nonprofit research organizations; and
- Governmental research organizations.
This distinction could become increasingly important for employers and foreign professionals evaluating whether an H-1B position qualifies as cap-exempt.
When Would the $103,265 Fee Be Paid?
Under the proposal, the additional fee would be collected when the H-1B cap-subject petition is filed. That distinction matters because the H-1B cap process generally involves two separate stages: registration and, if selected, filing the actual H-1B petition.
USCIS’s H-1B framework requires prospective cap-subject petitioners to complete the registration process before they can file a cap-subject petition after selection. Based on the DHS announcement, the proposed $103,265 fee applies to the petition filing, rather than simply entering a beneficiary into the H-1B cap process.
Why Is DHS Proposing Such a Large Fee?
DHS states that the proposed fee is designed to recover federal costs extending beyond USCIS’s adjudication of an individual H-1B petition. The agency identifies costs associated with the broader immigration system, including security vetting, immigration courts, consular processing, labor enforcement, technology infrastructure, and coordination among federal agencies.
According to USCIS spokesperson Zach Kahler, the proposed fee is intended to shift some of those costs away from taxpayers and toward users of the immigration system.
What Could This Mean for U.S. Employers?
If the proposal becomes a final rule in its current form, the financial implications for employers using the H-1B cap could be substantial. An employer with one selected beneficiary could face an additional $103,265 before accounting for other applicable H-1B fees.
For employers seeking to sponsor several cap-subject workers, the costs could multiply quickly. For example:
| Number of Cap-Subject Petitions | Proposed Additional Fees |
|---|---|
| 1 | $103,265 |
| 5 | $516,325 |
| 10 | $1,032,650 |
| 25 | $2,581,625 |
| 50 | $5,163,250 |
These figures reflect only the proposed $103,265 fee and do not include other potentially applicable government filing fees or immigration-related expenses.
Potential Impact on Small and Mid-Sized Employers
A fee of this size could have an especially significant impact on startups and small or mid-sized businesses. Employers would need to consider the potential immigration cost much earlier when budgeting for foreign national employees.
If finalized, businesses that regularly participate in the H-1B cap process may need to reassess:
- Immigration budgets;
- Workforce planning;
- Which positions warrant H-1B sponsorship;
- Whether positions or organizations qualify for cap-exempt H-1B sponsorship; and
- Whether another immigration classification may be appropriate based on the employee’s circumstances.
The availability of another visa classification is highly fact-specific, and employers should not assume that another category can simply substitute for H-1B status.
Is the $103,265 H-1B Fee in Effect Now?
No. This is a proposed rule. The information provided by DHS does not establish that employers currently owe the $103,265 fee. A proposed rule is part of the federal rulemaking process. Employers should distinguish between what DHS proposes to implement and the requirements that are actually in force.
Unless and until the proposal is finalized and becomes effective, employers should continue following the H-1B filing requirements and fee schedule currently in effect.
What Should Employers Do Now?
Employers do not need to begin paying the proposed $103,265 fee based solely on this announcement. However, businesses that rely heavily on cap-subject H-1B workers should closely monitor the rulemaking process. If DHS ultimately adopts the proposal, employers may need to significantly adjust future immigration budgets and sponsorship strategies.
Employers should also be cautious about restructuring immigration strategies solely in anticipation of a proposed rule because the final requirements could differ from the proposal.
Bottom Line
DHS’s proposal to impose an additional $103,265 fee on H-1B cap-subject petitions could dramatically change the economics of H-1B sponsorship if it becomes final. The proposal would apply to the regular 65,000 H-1B cap as well as petitions qualifying under the additional 20,000 U.S. advanced degree exemption, while certain cap-exempt H-1B petitions would not be subject to the additional fee.
For now, the key point is that the $103,265 fee is proposed and is not yet an effective H-1B filing requirement. Employers considering future H-1B sponsorship should monitor DHS and USCIS announcements closely as the rulemaking process develops.
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REBECCA KROLL is an Associate Attorney at Richards and Jurusik who practices exclusively in U.S. immigration law, focusing on both business and family-based immigration. She assists clients with employment-based visas, marriage and family cases, and the U.S. citizenship process. (Full Bio)
