Trump H-1B charge tests bounds of fee-setting authority

The latest Trump effort to impose new costs for skilled foreign workers makes unprecedented use of statutory fee-setting powers, aiming to recoup immigration system expenses far beyond the H-1B visa program.

The Department of Homeland Security this week proposed a $103,265 charge for hiring new specialty occupation H-1B workers, citing authority under the Immigration and Nationality Act to set fees offsetting costs of services. But those provisions have never been used to add such steep price tags on immigration benefits or to collect revenue for other agencies that have their own congressional funding and applicant fees.

Whether U.S. Citizenship and Immigration Services, which administers the H-1B program, can charge fees on behalf of Immigration and Customs Enforcement, U.S. Customs and Border Protection, the Department of Labor and other entities will be central to litigation over the proposal, attorneys said.

"I am not optimistic that the DHS will prevail in said litigation," said Leon Fresco, a partner at Holland & Knight.

DHS proposed the fee after a federal judge vacated a 2025 White House proclamation that slapped a six-figure charge on H-1B workers hired from outside the U.S., finding it an illegal tax. The new fee would impact an even wider swath of candidates for the program and apply to recent U.S. college graduates who were spared the $100,000 charge under the proclamation.

USCIS said the fee would offset expenses incurred across multiple agencies "that otherwise must be funded by taxpayers." Although the new fee relies on different statutory authority than the proclamation and will proceed through the formal rulemaking process, attorneys and legal experts said it's no less vulnerable to legal challenge.

Offsetting costs

The INA directs DHS to review its application fees every two years for various immigration and foreign worker benefits. The agency most recently updated fees for immigration services, including the H-1B program, in 2024, hiking petition fees for those specialty occupation workers to $780 — on top of a $215 charge to register for the annual visa lottery.

Since then, Congress authorized more than $150 billion in new funding for ICE and other Homeland Security subagencies last year, and added another $70 billion to back the Trump administration's immigration crackdown in June.

Still, DHS relies on the same statutory provision of earlier fee rules, Section 286(m) of the INA, to argue it's permitted to set fees reflecting the full range of federal activities connected to the immigration system, even work unrelated in any way to the H-1B program.

"We haven't seen that before," said Shev Dalal-Dheini, director of government relations at the American Immigration Lawyers Association. "ICE, CBP, DOL have their own appropriated funding for this work."

It's an "aggressive" interpretation of fee-setting provisions of the statute, said Jason Levy, counsel at Grossman Hammond Young.

"It creates real problems, I think, for their interpretation of the main authorities they're using," said Levy, a former senior counsel at the DHS Office of General Counsel. "They're going to have to contend with some really tough challenges."

While the rule may be an unprecedented use of fee authority, that doesn't mean it's outside the bounds of the agency's power to recoup costs, said George Fishman, a senior fellow at the Center for Immigration Studies, a think tank that advocates for restricting migration levels.

"It's a foregone conclusion in my mind at least that it will be enjoined by some lower court," said Fishman, a former acting chief counsel at USCIS. "I could see the Supreme Court going either way."

Tax powers

The White House's $100,000 fee proclamation last year made novel use of the president's authority to restrict entry of foreign nationals in the U.S. under Section 212(f) of the INA, a provision that was also used to impose a travel ban currently targeting 39 countries.

In multiple suits, groups challenging that fee argued it was arbitrary and exceeded the executive's powers. They also claimed it wielded tax authority exclusive to Congress, an argument that found traction with a Boston judge in June after the U.S. Supreme Court ruled against President Donald Trump's global tariffs regime on similar grounds. The administration is appealing that decision.

Fresco, a former deputy assistant attorney general in the Department of Justice's Office of Immigration Litigation, said the government's work defending the latest fee proposal in court will be made even tougher by factors like the history of the previous H-1B charge under 212(f). Statements from Trump officials — among them Vice President J.D. Vance — also provide opportunities for plaintiffs to claim the fee is pretextual, he said.

"They're saying the purpose of the fee is to have employers hire Americans," Fresco said.

Critics of the DHS proposal also predicted it will suffer from the same flaw as the White House proclamation — that it's a tax without permission from Congress.

That doesn't change because the fee is being proposed through the formal rulemaking process, said Greg Siskind, a partner at Siskind Susser LLP.

"Fees have to be connected to the actual service that's being provided by a federal agency. Otherwise it's a tax," he said.