U.S. Court Vacates H-1B $100,000 Fee Policy Pending Rulemaking

• A federal court has vacated the agency policies implementing the controversial $100,000 H-1B petition fee, finding that the government likely failed to comply with key requirements of the Administrative Procedure Act (APA), including notice-and-comment rulemaking.  

Court Blocks Implementation of H-1B $100,000 Fee Policy 

On September 30, 2026, the U.S. District Court for the Northern District of California granted in part a motion for a preliminary injunction in a challenge to Presidential Proclamation 10973, which imposed a $100,000 payment requirement on certain H-1B petitions.  

The court vacated the agency policies that implemented the fee and prohibited agencies from enforcing those policies until the required rulemaking procedures are completed.  

Key Developments 

• The court vacated agency guidance and policies issued by U.S. Citizenship and Immigration Services (USCIS), the Department of Homeland Security (DHS) and the Department of State that implemented the $100,000 H-1B payment requirement.  
• Agencies have been enjoined from enforcing or implementing the policies until they complete notice-and-comment rulemaking under the APA and conduct required analyses under the Regulatory Flexibility Act.  
• The court found that plaintiffs were likely to succeed on claims that the agencies acted arbitrarily and capriciously and failed to follow required rulemaking procedures.  
• The court denied the government’s motion to dismiss the case, allowing the broader legal challenge to continue.  
• The court denied class certification without prejudice, noting that the relief already granted provides protection beyond the named plaintiffs.  

Background on the $100,000 Fee Extension into 2027

In September 2025, President Trump issued Presidential Proclamation 10973, requiring employers filing certain new H-1B petitions to pay an additional $100,000 fee. The administration said it introduced the measure to address what it viewed as abuse of the H-1B program and to protect U.S. workers. Federal agencies later issued guidance explaining how employers must submit the payment and outlining the process for requesting exemptions.

Court’s Findings 

The court concluded that the implementing agency policies created new obligations for employers and therefore constituted agency action subject to APA requirements. The court found that the agencies did not conduct notice-and-comment rulemaking before implementing the fee and did not adequately consider alternatives or the impact on affected employers.  

The decision does not invalidate the presidential proclamation itself. Instead, it targets the agency policies used to administer and enforce the fee requirement.  

Impact on Employers 

As a result of the ruling, agencies are prohibited from enforcing the policies implementing the $100,000 H-1B fee while rulemaking and related analyses remain outstanding. Employers that may have been subject to the fee should monitor further developments, as the underlying litigation remains ongoing and appeals are possible.  

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