By Heidi J Meyers
The exciting decision by Judge Leo Sorokin, in the State of California v Mullin case, 1:25-cv-13829-LTS (Dt Mass), holding that the $100,000 H-1B fee is an unlawful tax, on June 8, 2026, came plunk in the middle of employers hurriedly filing their H-1B cap-subject petitions by the June 30, 2026 deadline, for those selected in the March H-1B lottery.
The favorable decision brought a temporary sigh of relief to employers who at first believed they would no longer be required to pay the $100,000 H-1B entry fee for those beneficiaries currently outside of the U.S. whose H-1B petitions were filed after September 21, 2025 12:01 am EDT, and for those in the U.S. but for whom a change of status was not likely to be granted, and would have to consular process overseas.
But wait! Payment of the $100,000 H-1B entry fee was back on, less than one week later. On June 12, 2026, Judge Sorokin issued a temporary administrative stay so that his order would not go into effect while the Government appeals. The Government then filed an appeal with the First Circuit which is pending.
In another reversal, on July 24, 2026, the First Circuit has fortunately ruled against the Government, denying their request for a stay. Meaning that for now, employers are not required to pay the $100,000 H-1B entry fee. State of California v. Mullin, Dkt No 26-1699 (1st Cir. 07/24/2026).
However, employers still face a high level of uncertainty, as there are several cases pending in different courts, and the issue may likely end up with a split in the circuits, and at the Supreme Court.
Thus, an employer could go through the H-1B petition process with USCIS, get an approval and get ready for the beneficiary’s interview at the US consulate or embassy abroad, and then suddenly have to pay the $100,000 fee due to a reversal in the federal case law.
The consequences of the $100,000 H-1B entry fee fall differently on different entities and individuals.
As for private business, generally cap-subject employers, some may be able and willing to pay the $100,000 entry fee, and view it as “a cost of doing business”. Apparently, this is very few employers, according to a declaration by the Acting Associate Director of USCIS SCOPS, Cara Selby, submitted by the Government in State of California v Mullin, affirming that only 85 settled payments had been made of the $100,000 H-1B entry fee as of February 15, 2026. This was submitted in the State of California v Mullin case, 1:25-cv-13829-LTS (Dt Mass), and also submitted in the Global Nurse Force case.
For most US employers/companies, an additional $100,000 fee is outside the range of their budgets, an unbearable cost, meaning new initiatives are put on hold, and more work that would otherwise be done by domestic employees is being outsourced abroad. For example, Walmart has announced it would not be using the H-1B program to bring foreign professionals to the U.S. See, https://www.cnbc.com/2025/10/22/walmart-h-1b-visa-job-offers-trump-fee.html.
On top of the already high USCIS fees for the H-1B petition, particularly including premium processing, plus the amount of work involved, it is a deal-breaker and an exorbitant additional expense they are unable to bear.
Especially for state employers, nonprofits, colleges and universities as well as their affiliates, such as hospitals and medical centers, among others, payment of the $100,000 to bring foreign talent to the U.S. is an impossible additional expense that their stretched budgets are simply unable to bear.
Judge Sorokin found that these employers would suffer injury from the new policy in State of California v. Mullin. In particular, the $100,000 fee: 1) impedes their ability to hire educators for their primary and secondary schools, exacerbating existing teacher shortages; 2) negatively impacts their ability to staff public colleges and universities and stymies critical academic research; and 3) will lead to a decline in H-1B medical workers, which, in turn, will worsen staffing shortages in medical facilities and diminish access to healthcare. The policy’s impact on healthcare professionals “will cause cascading harm throughout the Plaintiff States” by impairing public healthcare providers’ ability to provide adequate services to residents and by heightening costs to state insurance programs. Id.
Judge Sorokin rejected the Government’s argument that there was a lack of jurisdiction due to consular nonreviewability, quoting the recent Pietersen case in the D.C. Circuit:
“it is well settled that when plaintiffs pursue forward-looking challenges to the lawfulness of regulations or policies governing consular decisions, courts may review them to assure that the executive departments abide by the legislatively mandated procedures.” Pietersen v. U.S. Dep’t of State, 138 F.4th 552, 560 (D.C. Cir. 2025) (citation modified). Here, Plaintiffs do not seek retrospective review of an executive officer’s decision to exclude a noncitizen but rather advance a forward-looking challenge regarding the lawfulness of the Policy carrying out the Proclamation. For these reasons, the Court rejects Defendants’ argument that the claims are not justiciable under the doctrine of consular reviewability…
Judge Sorokin’s reasoning followed closely the recent Supreme Court decision in Learning Resources, Inc. et al v Trump et al, 607 U.S. __ (2026) holding that IEEPA (the International Emergency Economic Powers Act) does not authorize the President to impose tariffs. Article 1, Section 8 of the U.S. Constitution specifies that Congress has the power to lay and collect taxes and duties. The Framers did not vest any of the taxing power in the Executive branch. Congress does not delegate its powers through ambiguous statutory text. There is no exception to the separation of powers for emergencies or foreign affairs.
In State of California v Mullin, Judge Sorokin concluded that the $100,000 H-1B entry fee was not a penalty (meaning a punishment), since hiring H-1B workers is legal. An obvious purpose of the policy is to raise revenue, even though it had not to date accomplished that purpose. The Supreme Court decision in Learning Resources found that tariffs collected by DHS constitute a tax. The $100,000 H-1B entry fee is a tax, regardless of what the payment is called.
The INA (Immigration and Nationality Act) does not delegate Congress’s taxing power to the President. Judge Sorokin found that INA 212(f) which allows the President to restrict entry of aliens and INA 215(a) are not a delegation of the Congressional power of taxation. As in Learning Resources, the Court is reluctant to read into ambiguous statutes extraordinary delegations of Congressional power.
The closely-related case, Global Nurse Force et al v Trump et al, 4:25-cv-08454-HSG (N.D. California) is currently pending. The plaintiffs have made a motion for class certification, to include the following class members:
All U.S. employers who have filed or will file an H-1B petition that is subject to the
$100,000 fee under the September 19, 2025 Proclamation, “Restriction on Entry of
Certain Nonimmigrant Workers,” or the Proclamation’s implementing guidance, or
would file such a petition but for the fee, which USCIS received on or between September 21, 2025 and September 21, 2026, to employ a qualified temporary nonimmigrant worker in a specialty occupation.
In contrast to Judge Sorokin’s decision in State of California v Mullin, Judge Howell in Chamber of Commerce of the USA, et al. v DHS et al., 25-cv-3675-BAH (D.D.C. 12/23/2025), found that the $100,000 H-1B entry fee was a lawful exercise of presidential authority under INA 212(f). However, this decision was issued on December 23, 2025, prior to the Supreme Court’s decision in Learning Resources. The US Chamber of Commerce and AAU (Association of American Universities have filed an appeal to the D.C. Circuit.
It will take time for all this federal court litigation to play out. Meanwhile, many employers, particularly those in healthcare and education, as well as other areas, may petition for foreign talent without currently paying the exorbitant costs associated with the H-1B. An employer should use premium processing when filing with USCIS in order to obtain an approval as quickly as possible and get an interview for the beneficiary abroad with the US consulate or embassy. However, due to closures of US embassies and consulates in Africa, as well as major backlogs in other consulates to process H-1Bs (for example in India), and the new rule that one must be a citizen or resident of the country where the US consulate or embassy is located, means that even if a US employer does their level best to expedite bringing foreign talent to the US through the H-1B program, there could be significant delays by which time the law has again changed and the $100,000 H-1B entry fee back on.
What if the $100,000 H-1B fee is eventually found unconstitutional, or at least unlawful and ultra vires under the INA? How will employer/petitioners get their money back?
The “H-1B Visa Payment to Remove Restriction Form” on the pay.gov website provides that if your application is not approved, a full refund will be processed. It is not clear if by “application” the Government means both the H-1B petition approval by USCIS, as well as the H-1B visa application approval by the Department of State. It provides that the employer/petitioner include their bank information in case of being refunded.
Will DHS actually give the money back? Or will it drag its feet, as it is currently delaying adjudications of all kinds of immigration applications, and even ignoring premium processing deadlines after employer/petitioners have paid the premium processing fees.
This is a drama which will continue...