The higher costs of sponsoring an H-1B worker may dent hiring and could also impact the dreams of those aspiring to work in the USThe Trump administration has proposed a new $103,265 fee for cap-subject H-1B petitions, as the earlier $100,000 payment imposed through a presidential proclamation in Sept 2025 has run into legal challenges and is set to expire next month (unless extended). The new proposal, however, is based on a different legal authority and would create a separate fee regime for cap-subject H-1B petitions.The draft proposal will be open for public comments and will take a few months for finalisation and implementation.The US Department of Homeland Security (DHS) has proposed this new fee for every cap-subject H-1B application (termed as petition under US immigration laws) – this move will significantly raise the cost for employers seeking to hire foreign workers. It would be in addition to all existing H-1B filing and statutory fees. However, H-1B petitions that are exempt from the annual cap would not be subject to the new charge.There is an annual quota (cap) of 85,000 H-1B new visas that are allotted each year. This includes the 20,000 cap for those with advanced degrees, known as the Master’s cap. In addition, there is a cap-exempt H-1B category. Higher education institutions and related affiliated nonprofits and research organisations are among those eligible to hire cap-exempt H-1B workers.A footnote in the 67-page draft proposal indicates that the proposed fee would also not generally apply to petitions for H-1B workers who have already been counted against the annual cap and are seeking to change jobs or extend their stay.But there is a finer point – the cap exemption does not cover a worker who is eligible for a fresh six-year period of H-1B admission when the new petition (application) is filed. Thus, as the proposed $103,265 charge applies to cap-subject petitions, such a fresh six-year case could potentially attract the proposed fee.“An important point to note is that the proposed $103,265 fee is tied to whether the H-1B petition is ‘cap-subject,’ not simply to whether the worker is physically inside or outside the US,” Mitch Wexler, senior counsel at Fragomen, a global immigration law firm, told TOI.Thus, the proposed fee will not only apply to H-1Bs who were outside the US and were selected in the lottery, but will also cover students from within the US who are transiting from an F-1 visa to an H-1B.New York-based immigration attorney, Cyrus D Mehta, told TOI that: “The $103,265 fee for each cap subject H-1B is preposterous. It will also apply to F-1 students who will change status to H-1B in the US. This ropes heralds the death of the H-1B program. The Trump administration has killed the goose that laid the golden eggs. The ability to attract bright and hardworking skilled workers to work for US employers and grow the economy was America's secret sauce.”The proposed $103,265 charge is separate from the $100,000 H-1B payment introduced under a presidential proclamation announced in Sept 2025 – which applied to hiring H-1B workers from outside the US. This fee has faced legal challenges, and its implementation was vacated by a district court in June 2026, with the government's appeal still pending when the proposed rule was prepared.The Sept 2025 proclamation was originally set to expire after 12 months, so its stated expiry is in the coming month, unless extended. DHS says the proposed $103,265 fee rests on a different legal authority and is intended to create a permanent fee on cap-subject H-1B petitions.In fact, as this earlier fee typically applied to hiring H-1Bs from outside the US, the last filing season, which ended in spring, had seen an increase in hiring of immigrants within the US – such as sponsoring international students transiting from an F-1 visa. If the proposed fee, announced today, is implemented, it will dent hiring of international students, as it applies to all H-1B cap hiring.For the fiscal year ended 2025, 2.83 lakh H-1B visas were allotted to Indians – this was 70% of the total visas (including extensions). As regards new visas (for initial employment), Indians bagged nearly 58,000 visas (roughly half of the total new visas, including cap-exempt visas).Thus, the higher costs of sponsoring an H-1B worker may dent hiring and could also impact the dreams of those aspiring to work in the US.If implemented, the fee is expected to generate about $8.78 billion a year, based on an assumed 85,000 cap-subject H-1B petition number. The proposed fee would also be a major financial burden for some employers, particularly smaller companies. DHS estimates that 14,541 small entities would be affected and that 76% of them would face a cost increase exceeding 1% of annual revenue. The agency therefore acknowledges that the proposal would have a significant economic impact on a substantial number of small entities that file cap-subject H-1B petitions. However, DHS argues that demand for H-1B workers is sufficiently strong to sustain filings at the 85,000 level even with the higher cost.Immigration experts point out that the underlying objective is to discourage hiring of immigrants rather than fee generation.Catch the latest World News and Live updates. Download the TOI app.