US Proposes $103,265 Fee for H-1B Cap Petitions; Small Firms Hit Hardest

Hyderabad: The proposed $103,265 fee for H-1B cap-subject petitions could create severe financial pressure on employers and make visa sponsorship increasingly difficult, particularly for small businesses, according to US immigration attorneys and analysts.

The US Department of Homeland Security (DHS) has proposed the fee through a formal rule-making process, weeks after a federal court struck down the Trump administration’s earlier $100,000 H-1B payment requirement. The new proposal, published on Tuesday, would apply to all H-1B cap-subject petitions filed after the rule takes effect, if finalised.

US attorney Bhumireddy Sai Srinivas Reddy said that the impact on smaller employers will be significant. He said that the DHS's own regulatory analysis had confirms that 76 per cent of small entities filing H-1B cap-subject petitions would face a cost increase exceeding one per cent of their annual revenue. DHS considered whether to exempt small employers from the fee, and declined to do so, arguing that exemptions would create perverse incentives and lead to revenue shortfalls, Srinivas Reddy said. “That reasoning is thin.”

“The practical consequence is that H-1B sponsorship becomes the near-exclusive domain of large corporations, further consolidating access to global talent among the few employers who can absorb a $103,265 fee per petition”, he added.

Srinivas Reddy also warned against the proposal asking employers to pay both the new $103,265 fee and the earlier $100,000 payment.

“The most alarming provision in this rule is language buried in the preamble. DHS explicitly acknowledges that if the First Circuit reverses the ruling of the US District Court for the District of Massachusetts and reinstates the $100,000 proclamation payment, employers could be required to pay both simultaneously. That would mean more than $203,000 in government fees alone to sponsor a single H-1B worker before attorney fees, Labour Condition Application costs, or any other filing expenses. This is not a hypothetical. DHS wrote it directly into the rule”, he said.

The earlier measure of $100,000 was struck down by the Massachusetts Court in June, after finding that the administration lacked the legal authority to impose the payment through a presidential proclamation. The government’s appeal against the ruling remains pending.

If finalised, the new rule would cover the annual 85,000 H-1B cap-subject petitions. It would not apply to cap-exempt petitions filed by universities, non-profit research organisations or government research institutions.

Rameswar Rao, an immigration consultant in Hyderabad, told Deccan Chronicle: "The new fee will be extremely impactful on new H-1B applicants, but the bigger problem would be for the United States. The US depends on H-1B holders for some of the most important positions in engineering, health and education fields. Attacking those positions would push the country into grave risk."

The proposal is now open for a 30-day public comment period and has no implementation date yet.