A Federal Court Just Blocked the $100,000 H-1B Fee — Here's What Your Business Owes

If you own a small business and were bracing to pay $100,000 just to sponsor one foreign worker, you can pause — for now. A federal appeals court has refused to let the government keep collecting the fee while its legal fight plays out, meaning the charge is not currently in effect for new H-1B petitions.

But "not currently in effect" is doing a lot of work in that sentence. The rule could snap back on if the government wins its appeal, and small employers who sponsor even one or two skilled workers a year are the ones with the least room to absorb a surprise six-figure bill.

What actually happened

The $100,000 H-1B fee was introduced through a presidential proclamation last fall, applying to new H-1B petitions filed after September 21, 2025. It didn't touch existing visa holders or renewals, but it dramatically raised the cost of hiring new foreign talent — pushing total sponsorship costs for a single worker above $101,500, compared with a typical pre-fee cost of $5,000 to $12,000 per petition.

On June 8, 2026, the U.S. District Court for the District of Massachusetts vacated the policy, ruling that the administration exceeded its executive authority and violated both the Administrative Procedure Act and constitutional separation-of-powers principles. Initially, the court paused enforcement of its own ruling, which allowed U.S. Citizenship and Immigration Services to keep collecting the fee while the government appealed.

That changed on July 24, 2026, when the U.S. Court of Appeals for the First Circuit denied the government's request to stay the district court's judgment. In plain terms: the government asked to keep charging the fee during the appeal, and the appeals court said no. As of now, the $100,000 payment requirement is not being enforced — but the underlying litigation is still active, and the government's appeal continues.

Why this hits small businesses harder than big ones

Large tech employers file hundreds or thousands of H-1B petitions a year, spreading compliance costs across a big hiring pipeline. Small businesses typically sponsor just one to five workers annually. That means every dollar of fees, legal costs, and uncertainty lands concentrated on a handful of hires — often specialized engineers, developers, or technical staff a small company can't easily replace with local talent.

For a company with under 20 employees, a $100,000-per-hire fee isn't a rounding error. It can represent 10% to 20% of annual revenue for an early-stage business, according to immigration and HR advisory groups tracking the policy's impact. Even the current pause doesn't erase the uncertainty: a business that files a petition today doesn't know for certain whether the fee will be waived, refunded, or reinstated by the time a visa is actually issued.

What small business owners should do right now

• Don't assume the fee is gone for good. The district court ruling and the appeals court's refusal to stay it mean the fee isn't being collected today, but the government's appeal is still pending. A reversal could reinstate the fee with little warning.
• Talk to immigration counsel before filing. If you're planning to file a new H-1B petition, get current guidance on whether the fee applies to your filing window and what contingency language, if any, your attorney recommends including.
• Budget for both scenarios. If you're mid-hiring-process for a foreign worker, model your costs both with and without the fee so a reinstatement doesn't blow up your cash flow.
• Check whether the fee applies to your situation at all. The charge only applies to new H-1B petitions and, in some cases, consular processing when a visa is issued abroad — it does not apply to existing visa holders or straightforward renewals.
• Explore alternatives if the risk feels too high. Some small employers are shifting toward remote, international hires through an employer-of-record arrangement, or restructuring roles as independent contractor engagements where that classification is legally appropriate, rather than sponsoring a visa under an uncertain fee regime.

If you're already sponsoring a worker

Employers who filed and paid the fee before the June ruling should ask their immigration attorney whether a refund claim is available given the vacated policy. Because the case is still on appeal, refund and reimbursement questions are likely to stay unsettled for months, so keep detailed records of what you paid and when.

If you're about to hire your first sponsored worker

New petitions still require the standard paperwork and employer obligations — including getting your business's EIN and payroll systems in order before you can properly sponsor and pay a foreign worker. Treat the fee uncertainty as one more variable in your hiring timeline, not a reason to skip the legal groundwork.

A quick timeline of how we got here

• September 21, 2025: The $100,000 fee takes effect for new H-1B petitions under a presidential proclamation.
• Fall 2025 into 2026: Business groups, including the U.S. Chamber of Commerce, sue to challenge the fee, arguing it exceeds executive authority.
• June 8, 2026: The U.S. District Court for the District of Massachusetts vacates the fee, but initially pauses its own ruling so USCIS can keep collecting it during the appeal.
• July 24, 2026: The First Circuit Court of Appeals denies the government's request to keep the fee in place while it appeals, meaning the fee is not currently being enforced.
• Now: The government's appeal is still pending. A final resolution could take months, and the outcome isn't guaranteed either way.

Common questions small employers are asking

Does this mean I don't have to pay the fee if I file now?

Based on the current court posture, USCIS is not enforcing the $100,000 fee on new petitions. But immigration attorneys are cautioning clients that "not enforced today" is not the same as "permanently eliminated," since the appeal is unresolved. Get case-specific advice before you file, especially if your petition timeline could stretch into a period where the legal landscape shifts again.

What if I already paid the fee?

Ask your immigration counsel about refund options. Because the underlying policy has been vacated by a district court, employers who paid the fee before the ruling may have grounds to pursue reimbursement, though the process and timeline for that are still developing given the active appeal.

Does the fee apply to visa renewals or transfers for existing employees?

No. The fee structure targets new H-1B petitions and, in some cases, consular processing when a visa is issued from outside the U.S. It was not designed to apply to existing visa holders extending their status with the same employer.

The bigger picture

This case is part of a broader pattern in 2026: federal immigration and labor policy is shifting quickly, and courts are actively pushing back on some of the changes. For a small business, the practical lesson isn't about the politics — it's that any hiring plan built around a single federal fee or rule right now needs a backup plan. Whatever your industry, if your growth strategy depends on specialized talent you can't hire domestically, build slack into your budget and your timeline until this litigation fully resolves.

The appeals process is expected to continue for months. Small business owners with pending or planned H-1B sponsorships should check in with counsel regularly rather than assuming today's status will hold through their next filing.

Photo by Kit (formerly ConvertKit) on Unsplash