The $100,000 H-1B Fee Is Dead. The $103,265 Fee Is Three Weeks Away, and It's Worse.

The $100,000 H-1B fee is not being collected. As of today, it cannot be. Employers filing consular-processing H-1B petitions do not pay it.

That is the good news, and it comes with a short shelf life. Proclamation 10973 expires on September 20, 2026 unless extended. And on August 25, DHS proposed a replacement that is broader in every direction that matters: $103,265, payable at filing, on every cap-subject H-1B petition, including the change-of-status filings the original proclamation never touched.

Comments close September 24, 2026.

How we got here

The litigation history matters, because it tells you what to expect next.

Proclamation 10973 issued September 19, 2025, imposing a $100,000 charge on covered H-1B petitions filed on or after September 21. Three suits followed within ninety days.

On December 23, 2025, the District Court for the District of Columbia upheld the proclamation, finding the President's § 212(f) authority sufficient.

On June 8, 2026, the District of Massachusetts vacated the implementing policy on very different reasoning: the charge is a tax, not an entry restriction, and Congress did not delegate the taxing power. The court also found independent APA violations: a legislative rule adopted without notice-and-comment, in excess of statutory authority, and arbitrary and capricious.

The government appealed to the First Circuit, and the district court administratively stayed its own judgment, briefly reinstating the fee. On July 24, 2026, the First Circuit denied the government's stay motion, lifting that stay. The vacatur is back in force.

So the position today: two district courts have reached opposite conclusions on the same proclamation, the merits appeal is pending in the First Circuit, and the fee is unenforceable in the meantime. That is a textbook circuit-split-in-waiting, and a plausible vehicle for Supreme Court review, though the proclamation's own September 20 expiration may moot the question before the courts reach it.

One open item employers should not assume away: there is no announced refund mechanism for the payments already made. Nothing we have found indicates the government intends to issue refunds. If your organization paid, treat recovery as an open question, not a resolved one.

Why the replacement is the more serious problem

The proposed rule is not the proclamation with a new number on it. Three differences matter, and the third is the one that should reshape planning.

It is a rule, not a proclamation. The D. Mass. vacatur turned substantially on the absence of notice-and-comment and the absence of statutory authority for a presidential tax. A notice-and-comment rulemaking under 8 CFR Part 106, grounded in the agency's fee-setting authority, is built to survive the objections that sank its predecessor. Employers assuming the courts will strike this one down too are reading the wrong lesson from the wrong case.

It applies to all cap-subject petitions, including the master's cap. The proclamation exempted advanced-degree filings in practice for many employers. This does not.

It reaches change-of-status filings. This is the structural difference. Proclamation 10973 applied only to beneficiaries seeking entry from outside the United States. In-country change of status, the F-1 student who wins the lottery and transitions to H-1B without leaving, was untouched.

The proposed rule reaches them. For universities' industry partners, for any employer whose cap-subject pipeline runs through U.S. graduate programs, and for the substantial share of cap filings that are change-of-status rather than consular, this converts an avoidable cost into an unavoidable one.

Cap-exempt filings (higher education and nonprofit research organizations) remain outside the rule.

What $103,265 does to a cap strategy

Layer the proposed fee onto what already exists, and the FY2028 cap petition looks like this for a large employer: the $215 registration fee, the I-129 base fee, the ACWIA fee, the fraud prevention fee, premium processing at $2,965 if used, and, if the rule finalizes, $103,265.

At that level, the H-1B cap stops being a talent-acquisition mechanism for most roles and becomes a targeted instrument for a small number of positions where no alternative exists.

Which means the planning question for FY2028 is no longer "how do we maximize selection odds." It is "which roles justify six figures, and what is the path for everyone else."

The alternatives deserve serious evaluation now rather than in February:

• O-1 for candidates with genuine distinction. The standard is demanding, but the classification is cap-exempt and the January 2025 policy guidance expanded the evidentiary examples, including for critical and emerging technologies.
• L-1 where a qualifying foreign affiliate exists and the candidate can accrue the required year abroad. This requires eighteen months of lead time, not two.
• Cap-exempt placement through affiliation with qualifying institutions, an option that may narrow, since DHS has a rule at OMB reportedly revising cap-exemption eligibility.
• E-3, TN, and H-1B1 where nationality permits.
• Offshore employment with a defined path to U.S. transfer.

Note the compounding effect with the wage-weighted lottery already in force. A Level I offer now receives one entry against a Level IV's four, and DOL has proposed raising every wage tier substantially. An employer sponsoring at the low end of the wage distribution faces worse odds and, if the fee finalizes, the same six-figure cost as everyone else.

What to do before September 24

1. Comment on the proposed rule. Docket USCIS-2026-0298, RIN 1615-AD20. Comments close September 24. Employer comments describing concrete operational consequences are the substance of an administrative record, and that record is where any future APA challenge is won or lost.
2. Model FY2028 under three scenarios: no fee, the fee as proposed, and the fee with the DOL wage increases finalized. The spread will be larger than your current budget contemplates.
3. Identify which FY2028 candidates justify the cost and which need an alternative path. Start the L-1 clock now for anyone whose route runs through a foreign affiliate.
4. If you paid under Proclamation 10973, document the payment and preserve your position. There is no refund mechanism, which is not the same as no refund.
5. Watch September 20. If the proclamation is extended or reissued rather than allowed to lapse, the consular-processing analysis changes again.

What we are not telling you

Two things, deliberately.

We are not predicting whether the proposed rule will be finalized, or in what form. Comments close in three weeks; a final rule could take months, and its content may differ from the proposal.

And we are not offering a selection-rate figure for the FY2027 cap. A 40.2% rate is circulating widely in trade coverage. It is derived by dividing 85,000 by the registration count, which is not how selection works; USCIS selects materially more registrations than the cap, because not all selections become filed petitions. USCIS has not released the FY2027 selection data. Anyone quoting you a rate is guessing.