States Challenge Legality of Steep New H-1B Fee
A collective group of 20 US states has filed a lawsuit against the Trump administration, contesting a controversial policy that imposes a $100,000 fee on new H-1B visa petitions. The lawsuit argues that the fee is ‘unlawful, unconstitutional, and harmful’ to critical public services that rely heavily on skilled foreign workers.
The case is being led by the Attorney Generals of California and Massachusetts, as senior leaders of this coalition. The plaintiffs contend that the administration overstepped its legal authority by introducing the fee through a presidential proclamation rather than following established congressional and regulatory procedures.
DHS Policy and Presidential Proclamation Under Scrutiny
The disputed fee was introduced through a proclamation issued by President Donald Trump on September 19, 2025. The Department of Homeland Security (DHS) began applying the policy to H-1B visa petitions filed after September 21, granting the Secretary of Homeland Security broad discretion to determine which applications are subject to the charge or eligible for exemptions.
According to the lawsuit, this approach violates the Administrative Procedure Act by bypassing mandatory rulemaking processes. The states also argue that the fee exceeds the authority granted by Congress, which has historically limited H-1B-related fees to covering the administrative costs of running the programme.
Financial Burden on Public Employers
Currently, employers filing initial H-1B petitions pay combined regulatory and statutory fees ranging from approximately $960 to $7,595. The new $100,000 charge represents a dramatic escalation, particularly for public and non-profit employers such as hospitals, universities, and school districts.
Attorney General Bonta warned that the fee would place severe financial strain on California’s public institutions. He emphasized that skilled international talent plays a vital role in supporting the state’s economy and public services, adding that the policy would worsen existing labour shortages in key sectors.
Impact on Education and Healthcare
The attorneys general argue that the fee would significantly aggravate staffing challenges in education and healthcare.
- During the 2024 – 25 academic year, nearly three-quarters of US school districts reported difficulties filling vacant positions, particularly in special education, bilingual education, ESL, physical sciences, and foreign language instruction. Educators represent the third-largest occupational group among H-1B visa holders.
- Healthcare providers also depend heavily on the programme. In fiscal year 2024, almost 17,000 H-1B visas were issued for medical and health-related occupations, with about half going to physicians and surgeons. The US is projected to face a shortage of up to 86,000 physicians by 2036, further heightening concerns about access to care.
States Joining the Lawsuit
In addition to California and Massachusetts, the lawsuit includes attorneys general from Arizona, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maryland, Michigan, Minnesota, Nevada, North Carolina, New Jersey, New York, Oregon, Rhode Island, Vermont, Washington, and Wisconsin.
The H-1B visa programme remains a critical pathway for skilled foreign professionals, including large numbers of Indian workers in technology, healthcare, and academic research. The states argue that the new fee threatens the program’s viability and undermines services essential to communities nationwide.
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