The H-1B visa programa critical pathway for U.S. employers to hire foreign workers in specialty occupations, faced a significant hurdle in September 2026 when President Trump introduced a $100,000 fee for new petitions. This fee, intended to address perceived abuses of the program, was recently struck down by a federal judge, who ruled it an unconstitutional exercise of taxing power.
The decision, handed down by U.S. District Judge Leo Sorokin on June 8, 2026, has far-reaching implications for employers, universities, and healthcare providers who rely on the H-1B program to secure highly skilled talent. The ruling comes after a coalition of 20 states, led by California, sued the administration over the fee, arguing it exceeded presidential authority and violated the Administrative Procedure Act (APA).
Judge Sorokin’s Ruling: A Tax by Another Name
In his ruling, Judge Sorokin declared the $100,000 payment a tax disguised as a regulatory charge. The judge emphasized that the Constitution grants the power to tax exclusively to Congressnot the president. This argument mirrors previous challenges to Trump’s tariffs and underscores the separation of powers.
The court found that the fee, implemented through Proclamation 10973was not a lawful regulatory payment as the administration claimed. Instead, it was a tax that the president had no authority to impose. The ruling vacated the policy in its entirety, allowing new H-1B petitions to revert to their prior fee structure.
The Impact on Employers and Institutions
The H-1B program is particularly vital for colleges, universities, and nonprofit research organizationswhich are exempt from the program’s annual cap and can file petitions year-round. The $100,000 surcharge threatened to disrupt the hiring pipeline for faculty, researchers, and other specialized staff, exacerbating existing staffing shortages in education and healthcare.
Before the proclamation, H-1B filing fees ranged from $960 to $7,595depending on the employer and filing circumstances. The additional $100,000 fee would have significantly increased the cost of hiring foreign workers, potentially deterring employers from participating in the program. By mid-February, only 85 employers had made the $100,000 payment, indicating the fee’s prohibitive nature.
The Legal Battle and Future Implications
The administration is expected to appeal the decision to the First Circuit Court of Appealswhere the ‘is it a tax or a fee’ question will be argued again. Meanwhile, a separate appeal is ongoing in the D.C. Circuit Court of Appealswhich heard oral arguments in March 2026. The outcome of these appeals could further shape the future of the H-1B program and the fees associated with it.
For now, employers can resume filing H-1B petitions without the $100,000 surcharge. However, the situation remains fluid, and employers are advised to stay informed about potential changes in the legal landscape. The court’s decision highlights the ongoing tension between presidential authority and congressional power, particularly in matters of immigration and taxation.
