H-1B Visa Demand Drops 25% After $100,000 Fee

Employer demand for H-1B visas dropped sharply following a $100,000 fee imposed by the Trump administration in September 2025. According to Department of Homeland Security data, the latest visa lottery cycle produced roughly 344,000 registrations, a decline of more than 25% from 2024.

The total registrations also fell to less than half of the 759,000 submissions recorded in 2023. The H-1B program is capped at 85,000 new visas each year, a figure that includes 65,000 regular-cap visas and 20,000 reserved for workers with U.S. Advanced degrees. Demand typically exceeds this limit, forcing U.S. Citizenship and Immigration Services to use a lottery system.

The new $100,000 charge applied specifically to petitions for H-1B workers entering from abroad. This changed the financial calculation for many companies and led to a significant reduction in registrations from firms that rely on overseas recruitment.

Fee Disrupted Hiring Before Court Ruling

The policy, implemented in September 2025, caused hiring disruptions for hospitals, universities, and technology employers. A separate analysis of USCIS data found that initial H-1B petitions requiring consular processing plummeted by 91.2% between September 2025 and May 2026 compared to the same period a year earlier.

A federal court halted the fee in June 2026. U.S. District Judge Leo Sorokin in Massachusetts ruled that the charge functioned as an unlawful tax that required congressional approval. "The President had no power or delegated authority to impose a tax on H-1B petitions," Judge Sorokin wrote. The First Circuit Court of Appeals later declined to restore the fee, leaving the government's appeal pending as of late summer 2026.

By the time of the ruling, the fee had already significantly altered employer behavior. Its impact was most evident in registrations linked to overseas hiring and in petitions needing consular processing.

Registration Data Reveals Steep Declines

The decline in demand was not uniform across all employers. Data from DHS shows the fee hit certain companies much harder than others.

IT staffing businesses and technology firms recorded the steepest drops. During the first five months the fee was in effect, the government collected $8.5 million from just 85 applicants abroad. Applications during that period fell by 87%, reducing agency revenue by an estimated $28 million.

Critics argued the policy would further restrict a program already limited by statute. DHS defended the payment as a way to recover federal administrative costs and to discourage employers from choosing H-1B workers when qualified U.S. Workers were available.

DHS Proposes Higher Replacement Fee

Following the legal defeat, the administration moved to raise costs through a different method. On August 24, 2026, DHS proposed a new fee of $103,265 for cap-subject H-1B petitions.

The proposal aims to preserve the administration's goal of funding immigration administration. U.S. Citizenship and Immigration Services spokesperson Zach Kahler said the fee would support "immigration programs that otherwise must be funded by taxpayers." DHS stated the measure would generate revenue to support the lawful immigration system but acknowledged the higher price could reduce participation. The agency noted that "some employers, including small entities, may file fewer petitions as a result of this proposed rule."

President Donald Trump had introduced the original $100,000 fee as part of an effort to "prioritize American workers" and overhaul the H-1B program. DHS released the latest demand figures on September 8, 2026, as employers faced both the new proposal and the unresolved legal fight over executive authority to raise visa costs.