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DHS Proposes $103,265 Fee on H-1B Cap-Subject Petitions

Bottom line: On August 25, 2026, the Department of Homeland Security published a proposed rule that would add a fee of $103,265 to every H-1B cap-subject petition. This is a proposal, not a final rule. Nothing is owed today, and no pending or approved petition is affected. The fee cannot apply to any petition until DHS publishes a final rule and that rule takes effect.

Based on the rulemaking timeline described below, employers should plan on the FY 2029 cap season, with registration and filings in spring 2028, as the first cap cycle realistically exposed to this fee.

What DHS proposed: The rule would create a new provision at 8 CFR 106.2(a)(3)(xii) requiring a $103,265 payment at the time of filing for all H-1B cap-subject petitions. Key features:

  • The fee applies to petitions filed under both the regular 65,000 cap and the 20,000 U.S. advanced degree exemption.
  • It is charged in addition to every existing fee, including the registration fee, the I-129 filing fee, the ACWIA fee, the fraud prevention fee, the asylum program fee, and premium processing where elected.
  • DHS calculated the amount by taking approximately $8.8 billion in claimed government-wide immigration costs and dividing by an assumed 85,000 filings.
  • Roughly two-thirds of the revenue would fund agencies other than USCIS, including the immigration courts, ICE, the Department of Labor, the Department of State, and CBP.
 What the proposed fee would not reach: The rule as written does not apply to:
  • Cap-exempt petitions, including those filed by institutions of higher education, related nonprofit entities, nonprofit research organizations, and governmental research organizations
  • Extensions of stay
  • Amended petitions
  • Change of employer petitions for workers already counted against the cap
  • Any other I-129 nonimmigrant classification, including L-1, O-1, TN, E-2, E-3, and H-1B1
DHS explained the cap-exempt carve-out by reference to the treatment of nonprofits and educational institutions under the asylum program fee.

Timing: DHS did not propose an effective date. The sequence is as follows:

  • Public comment period closes on or about September 24, 2026. The rule provides 30 days from publication.
  • DHS must then review comments and publish a final rule. For a rule of this size, generating an expected $8.8 billion per year and drawing what will almost certainly be a very high comment volume, that process has historically taken a year or more.
  • The FY 2027 cap season is complete and unaffected. Registration and filing for that cycle occurred in spring 2026.
  • The FY 2028 cap season, with registration in approximately March 2027, would require DHS to finalize the rule within roughly five months of the comment deadline. That is possible but would be unusually fast.
  • The FY 2029 cap season, with registration in approximately March 2028 and filings beginning April 1, 2028, is the realistic planning horizon.
Litigation is also likely if the rule is finalized, which could further delay implementation. Employers should not assume the rule will take effect on any particular schedule, in either direction.

Interaction with the $100,000 proclamation payment: The proposed fee is separate from, and would be charged on top of, the $100,000 payment required by Presidential Proclamation 10973. DHS states in the rule that the two rest on different legal authorities and that a petitioner subject to both would pay both.
As background, the District of Massachusetts vacated the guidance implementing the proclamation payment on June 8, 2026, and the government’s appeal to the First Circuit remains pending. DHS notes that the proclamation, unless extended, will expire before this proposed fee could take effect.

What this would mean in practice: For an employer that currently budgets a few thousand dollars in government fees per cap petition, the proposed fee would increase the government cost of a single cap hire by more than an order of magnitude. DHS acknowledged in its own analysis that the rule would have a significant economic impact on 11,051 small entities, which is 76 percent of the small entities it identified as cap-subject filers. DHS declined to adopt any small business exemption or reduced rate, reasoning that a carve-out would create an incentive to structure around the fee.

Steps to consider now

  • Do not change FY 2027 arrangements: Petitions already filed, approved, or in process are outside the scope of this proposal.
  • Build the possibility into multi-year workforce planning: Employers who treat the annual cap as a routine budget line should begin modeling a scenario in which each cap hire carries an additional six-figure government cost starting with the spring 2028 season.
  • Review the alternatives for candidates in the pipeline: Depending on the individual, cap-exempt employment, including concurrent cap-exempt arrangements, O-1A, L-1, E-2, E-3, TN, and H-1B1, may deserve earlier evaluation than they have received in past cycles.
  • Consider submitting a comment: The comment period is short. Employers with concrete data on hiring costs, small business impact, or the effect on domestic operations are in a strong position to put that information into the record, and a well-supported record matters for both the final rule and any later challenge.
We can help: We are preparing comments on this proposed rule and are available to discuss workforce planning, alternative classifications, and the possibility of submitting a company-specific comment before the deadline.

This alert is provided for general informational purposes and does not constitute legal advice or create an attorney-client relationship. Immigration rules change quickly, and the status of this proposal may have changed since the date of distribution. Please contact us to discuss how these developments apply to your organization.