Homeland Security Proposed a $103,265 Fee on Every Cap-Subject H-1B Petition

Homeland Security Secretary Markwayne Mullin signed a notice of proposed rulemaking that published in the Federal Register on August 25, 2026 at 91 FR 54817, under RIN 1615-AD20 and docket USCIS-2026-0298. The operative sentence adds one line to 8 CFR 106.2: "The following additional fee is required for all H-1B cap-subject petitions, including those eligible for the advanced degree exemption under section 214(g)(5)(C) of the Act: $103,265." It is payable at filing and, in the words of the preamble, "in addition to the current filing and statutory fees." Comments close September 24, 2026.

The rule reaches only petitions that count against the cap. Petitions filed by institutions of higher education, their affiliated nonprofits, nonprofit research organizations and government research organizations are cap-exempt and therefore outside it. DHS says so directly: it is "proposing to not require the fee to be paid with a petition for a cap-exempt H-1B nonimmigrant," because those petitioners are universities and research bodies and exempting them tracks the treatment of the asylum program fee.

That carve-out is the part that changes an attraction pitch. A six-figure federal charge now attaches to the corporate route into the United States and not to the academic one, which prices the same foreign engineer differently depending on which entity signs the petition. An agency selling a corporate research centre, a captive engineering unit or a manufacturing plant that intends to bring in specialists is now quoting a number that an agency selling a university partnership is not.

The revenue is not aimed at H-1B administration. DHS states the objective plainly as "revenue generation to support the costs of administering the lawful immigration system across multiple departments and agencies," and publishes the split. On a projected 85,000 cap-subject petitions a year, the fee yields $8,777,525,000. USCIS keeps 34.2%. The Executive Office for Immigration Review takes 33.7%, or $2,956.9 million, including $1,889.9 million of personnel costs for 8,400 additional positions. The Department of Labor takes 13.8%, Immigration and Customs Enforcement 11.9%, the State Department 5.5% and Customs and Border Protection 0.9% for the Traveler Verification Service. DHS concedes the point a petitioner would raise: it "realizes that some petitioners will object to funding the costs of non-USCIS administered programs to which they have no connection or from which they receive no direct benefit," and rests the design on "the ability-to-pay principle."

The two charges stack. Section II.A states that where a petitioner is subject both to a payment required under a presidential proclamation and to this fee, "the petitioner would be required to pay both amounts." The $100,000 payment under Proclamation 10973 is separately in litigation. The United States District Court for the District of Massachusetts vacated the implementing guidance on June 8, 2026 in California v. Mullin, No. 25-13829, the government appealed to the First Circuit on June 11, and the appeal was pending when the rule published. A footnote adds that the proclamation, unless extended, expires before this fee could take effect.

Nothing in the rule softens the number. There is no waiver, no hardship exception, no reduced rate and no official designated to grant relief. There is no refund provision for a petition that is denied, rejected or withdrawn. Small employers and nonprofits that are cap-subject pay the same amount as everyone else, and DHS explains why: "Exempting small entities or discounting fees creates a sizable perverse incentive for employers to avoid the fee." Its own regulatory flexibility analysis finds 14,541 of the 28,649 unique cap-subject petitioners in FY2025 were small entities, and that the rule would have a significant impact on 11,051 of them, or 76%.

The strongest objection is that none of this is law yet. It is a proposal with no effective date, no applicability date and no statement of which cap year it would first reach, and fee-setting under INA section 286(m) has to survive a challenge that funding immigration courts, labor certification and biometric exit from H-1B petitioners is not recovery of the cost of a service provided to the payer. DHS anticipates the argument and concedes the novelty, writing that it "has never set a fee for a specific immigration sub-population" to fund general operating costs, costs borne by other components, costs borne by other departments, and costs previously carried by appropriation. Every one of those objections may hold. What survives them is that the number is now published, and a company modelling a United States site has to carry it as a line until a court or a final rule removes it.

DHS also expects the fee to be paid rather than avoided. It cites Borjas (2026), NBER working paper 34793, for the finding that H-1B workers are paid 16.1% below the expected wages of comparable native workers and that petitioners would pay a one-time fee of $100,000 to $200,000, and reports a simulation in which demand does not fall below 85,000 at fees above $100,000. FY2026 registrations came to 343,981. Against that, the rule projects 85,000 petitions where the five-year average is 96,750, and DHS acknowledges that "USCIS may see a reduction in the number of H-1B cap registrations and some employers, including small entities, may file fewer petitions." No wage effect and no growth effect is quantified anywhere in the analysis, and monetized benefits are listed as "Not Estimated."