The numbers come first: $103,265 per H-1B visa petition, on top of existing filing costs, proposed Tuesday by the Department of Homeland Security. If the rule survives the comment period and the courts, employers would collectively pay $74.9 billion over a decade to sponsor foreign workers.
DHS frames the fee as cost recovery. The department says the federal government spends roughly $8.8 billion a year on immigration-related costs. Divide that figure by the 85,000 H-1B visas available annually and the math lands at $103,265 — the proposed surcharge. The revenue, DHS argues, would stop taxpayers from subsidizing a program that primarily benefits private employers.
'The proposed H-1B fee is intended to recover the costs incurred across the federal government to adjudicate, vet, and support lawful immigration programs that otherwise must be funded by taxpayers,' Zach Kahler, a spokesperson for DHS's U.S. Citizenship and Immigration Services, told Fortune.
The department's own regulatory analysis, however, tells a harder story. DHS estimated that 11,051 small businesses — 76% of the small entities it analyzed — would experience a 'significant economic impact' from the fee. That figure sits inside the same document proposing the rule.
Immigration attorney Elizabeth Ricci told Fortune the agency's math 'contradicts itself': DHS counts on employers paying the fee to generate $8.8 billion in revenue while simultaneously arguing the fee's virtue is that fewer employers will sponsor foreign workers. If the deterrent works, the revenue disappears. If employers pay anyway, the deterrent failed.
This is the administration's second attempt at a six-figure H-1B charge. A prior presidential proclamation requiring a $100,000 payment for certain H-1B workers was vacated by U.S. District Judge Leo Sorokin. The administration appealed, but the First Circuit declined to keep the payment in place while that appeal proceeds. This time DHS is moving through formal notice-and-comment rulemaking — a distinction Ricci told Fortune gives the $103,265 fee 'a better chance of surviving the litigation everyone expects.'
The competitive asymmetry is stark. Britta Glennon, an assistant professor at the University of Pennsylvania's Wharton School whose research focuses on immigration and the economy, told Fortune that large multinationals like Amazon and Microsoft can absorb the fee or route talent through offices in Vancouver or Toronto. Startups cannot. Research Glennon cited finds that startups denied H-1B workers are less likely to patent and less likely to reach a successful acquisition or IPO. 'Small companies have fewer options,' she told Fortune, adding that for startups 'talent is such a huge part of whether they are able to succeed.'
Glennon also warned that if the fee holds, the composition of H-1B recipients will shift sharply toward advanced-career workers and large corporations that can absorb the cost — producing what she called a 'big compositional shift' away from entry-level talent.
CEO Times take: The taxpayer-cost argument has real merit — no program should be an invisible subsidy. But a fee calibrated to price out 76% of small businesses is not neutral cost recovery; it is a structural advantage handed to the largest players in every industry. Free enterprise runs on competition, and competition runs on the ability of smaller firms to recruit the talent they need. A rule that DHS's own analysts flag as potentially paralyzing to small business deserves far more scrutiny than a 30-day comment window. Capital rewards clear rules — and rules that contradict themselves in their own preamble are not clear.
