URGENT UPDATE: Federal Court Strikes Down $100,000 H-1B Fee Requirement

On June 8, 2026, a federal judge in the U.S. District Court for the District of Massachusetts issued a sweeping  decision (PDF copy) striking down the $100,000 H-1B visa payment requirement originally instituted under Presidential Proclamation 10973. The court declared the policy implementing the fee to be unlawful and vacated it in its entirety.

This ruling represents a massive victory for U.S. employers, universities, and healthcare providers who rely on the H-1B program to secure highly skilled talent.

Background on the Proclamation and Fee

On September 19, 2025, the President signed Proclamation 10973, which added a $100,000 supplemental payment requirement to all new H-1B petitions (see our alert). The policy went into effect on September 21, 2025, severely impacting employers attempting to file new petitions or petitions requiring consular processing. A coalition of twenty states subsequently sued various executive departments and officials, arguing the implementation violated both the separation of powers and the Administrative Procedure Act (APA).

Why the Court Invalidated the $100,000 Fee

The court granted summary judgment in favor of the plaintiff states, finding the executive branch’s actions unlawful on multiple constitutional and administrative fronts.

1. Unconstitutional Exercise of Taxing Power (Ultra Vires)

• The court determined that the $100,000 payment requirement constituted a tax, rather than a penalty or regulatory fee.
• While the Constitution vests the power to lay and collect taxes exclusively with Congress, the President has no independent authority to impose taxes without explicit congressional delegation.
• The court found that Sections 212(f) and 215(a) of the Immigration and Nationality Act (INA)—which grant the President broad power to restrict the entry of noncitizens—do not delegate Congress’s exclusive taxing power.

2. Violations of the Administrative Procedure Act (APA)

In addition to the separation-of-powers violation, the court found the implementing agencies (including USCIS and the Department of State) violated the APA in three distinct ways:

• Failure to Follow Procedure: The agencies issued a legislative rule creating the new $100,000 payment obligation without adhering to the APA’s required notice-and-comment procedures. They additionally failed to justify bypassing this procedure with a valid “good cause” or “foreign-affairs” exception.
• Exceeding Statutory Authority: The $100,000 surcharge exceeded the fee-setting authority delegated by Congress, as it was not designed to recover the administrative costs of adjudication.
• Arbitrary and Capricious Action: The agencies failed to provide a “reasoned explanation” for imposing the heavy tax, failed to consider the reliance interests of employers, and ignored the significant impact the fee would have on critical human-services sectors like healthcare and education.

Related Litigation and Conflicting Rulings

It is important to note that this favorable ruling in Massachusetts contrasts with a separate legal decision. In another legal challenge brought by the Association of American Universities and the U.S. Chamber of Commerce, a federal judge ruled in December that the President didn’t overstep his authority when imposing the fee. The groups appealed the decision later that month.

During the Massachusetts proceedings, the government attempted to argue that this prior ruling should preclude relief for many of the affected universities. However, the judge rejected this argument, noting that the universities were not proven to be in privity with the associations from the prior lawsuit, and crucially, that the APA allows for the vacatur of the underlying unlawful agency action itself rather than just party-specific relief.

Scope of Relief: Immediate Nationwide Vacatur

The court rejected the government’s argument that relief should be limited only to the specific plaintiffs involved in the lawsuit. Emphasizing the “act-centric” nature of the APA, the judge ordered the complete vacatur of the agency materials implementing the Proclamation’s payment requirement. Vacatur sets aside the underlying authority of the policy, meaning the invalidation currently applies universally to all employers and petitions.

What Employers and Employees Should Know

• New Filings Can Proceed: U.S. employers can immediately resume filing H-1B petitions (including cap-subject, cap-exempt, transfers, and amendments) without being subjected to the $100,000 surcharge.
• Return to Standard Fees: Petitions that were delayed or withheld internally due to the massive financial burden of the fee can now proceed under the standard statutory filing fees.
• Consular Processing Cleared: Beneficiaries currently outside the United States and those requiring consular notification no longer face this $100K fee.