U.S. employers relying on H-1B sponsorship could face significantly higher recruitment costs under a new DHS proposal. The proposed $103,265 additional fee would apply to cap-subject H-1B petitions, although it has not yet taken effect.
U.S. employers relying on the H-1B programme may need to reconsider the cost of future international recruitment following a new proposal from the Department of Homeland Security (DHS). DHS has proposed an additional $103,265 government fee for H-1B petitions subject to the annual cap. If implemented, the measure would dramatically increase the cost of sponsoring certain new H-1B workers.
For employers, however, there are two important points to understand from the outset: the fee has not yet taken effect, and it would not apply to every H-1B filing.
Who Could Be Affected?
The proposed additional fee targets petitions falling within the annual H-1B numerical allocation:
- 65,000 places under the regular H-1B cap; and
- 20,000 places available to qualifying beneficiaries under the U.S. advanced degree exemption.
DHS estimates that approximately 85,000 petitions annually could therefore attract the new fee.
The proposal does not extend the six-figure charge across the entire H-1B programme. Cap-exempt petitions would fall outside the proposed fee. This includes qualifying petitions involving certain universities, affiliated nonprofit organisations, nonprofit research organisations and governmental research organisations.
Similarly, filings that are not subject to the annual H-1B cap would not attract the proposed charge.
What Would Employers Actually Pay?
The proposed $103,265 is an additional fee, rather than a replacement for the existing costs of H-1B sponsorship. Employers would therefore continue to face the applicable government charges associated with the underlying H-1B petition, with the new fee added to the overall cost of an affected cap-subject case.
The commercial impact could be considerable.
An employer with five affected petitions could face more than $516,000 in additional government charges, while ten affected petitions could generate more than $1 million in additional costs. This could make immigration strategy an increasingly important part of recruitment budgeting, particularly for employers that regularly hire international graduates and other professionals requiring H-1B sponsorship.
Why Is DHS Proposing the Fee?
DHS intends the new charge to raise approximately $8.8 billion annually.
The proposed revenue would support costs associated with administering the U.S. immigration system across several federal agencies and functions, rather than being limited exclusively to USCIS's adjudication of the individual H-1B petition.
This aspect of the proposal, together with the unprecedented size of the charge, is likely to receive considerable scrutiny during the rulemaking process. DHS itself recognises that the measure could affect employer demand for H-1B workers and have a significant economic impact on a substantial number of small businesses.
What Does This Mean for Existing H-1B Workers?
Employers should not assume that every employee currently holding H-1B status will suddenly cost an additional $103,265.
The proposal specifically concerns cap-subject petitions.
This distinction will be particularly important for companies with established H-1B populations. Immigration teams should separate employees requiring future cap participation from those whose filings are outside the annual numerical limitation. Case-by-case review will therefore be essential when assessing the potential financial exposure.
Should Employers Change Their H-1B Strategy Now?
Not necessarily.
The proposal published by DHS is not a final rule, and the $103,265 charge is not currently an effective filing requirement. Employers should continue to follow the H-1B requirements and fee structure currently in force while monitoring the rulemaking process.
What employers can do now is prepare. Companies expecting to recruit internationally should identify positions likely to require H-1B cap sponsorship and consider the potential financial impact if the proposal ultimately becomes effective.
Could Employers Consider Alternatives to H-1B Sponsorship?
For some employees, yes.
A six-figure cap fee would make early immigration assessment considerably more important. Depending on the employee's nationality, qualifications, professional background, proposed U.S. role and the employer's corporate structure, another immigration category may be available.
Potential options can include L-1 intracompany transferee status, O-1 extraordinary ability classification, E-1 or E-2 treaty status, E-3 status for qualifying Australian nationals, TN status for qualifying Canadian and Mexican professionals, and H-1B1 status for qualifying Chilean and Singaporean nationals.
For strategically important employees, employers may also wish to consider whether an employment-based permanent residence strategy should begin earlier. These routes have their own eligibility requirements and should not be viewed simply as substitutes for H-1B status.
Three Steps Employers Can Take Now
- Review future cap cases. Identify employees and prospective hires likely to require participation in a future H-1B cap process.
- Model the financial exposure. Employers with multiple anticipated cap cases should consider what a $103,265 additional charge per petition would mean for recruitment and immigration budgets.
- Assess immigration options earlier. Immigration eligibility should ideally be considered before the final stages of recruitment, particularly where another U.S. work-authorisation strategy may be available.
What Happens Next?
The proposal must proceed through the federal regulatory process before it can become effective. DHS is accepting public comments on the proposed regulation, after which the agency will determine whether and in what form to proceed with a final rule. Given the scale and nature of the proposed fee, further legal and regulatory developments are also possible.
For now, the central message for employers is straightforward: the $103,265 fee is not yet payable, but organisations that depend on H-1B cap recruitment should begin assessing what it could mean for their future workforce strategy.
How Hudson McKenzie Can Assist
Hudson McKenzie works with employers, HR departments and global mobility teams to develop U.S. immigration strategies for international employees.
Our team can assist employers with H-1B planning, reviewing potentially affected cap cases, assessing alternative U.S. visa categories, intracompany transfers and developing longer-term permanent residence strategies for key employees.
If your organisation relies on H-1B sponsorship, contact Hudson McKenzie to review your upcoming U.S. immigration pipeline and assess the options available for your international workforce.
This update is provided for general information only and does not constitute legal advice. The $103,265 H-1B fee remains a proposed measure as of 25 August 2026 and is subject to the federal rulemaking process.
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