Major relief for Indian tech talent as US court scraps $100,000 H-1B fee

A US federal court has invalidated a controversial $100,000 fee on new H-1B visas, delivering a major victory for employers, universities and highly skilled foreign workers who rely on the programme to work in the United States.

The ruling by US District Judge Leo Sorokin in Massachusetts marks one of the most significant legal setbacks for President Donald Trump's efforts to tighten legal immigration through executive action. The court found that the administration lacked the authority to impose the fee, describing it as an unauthorised tax that exceeded powers granted under federal immigration law.

The decision is particularly significant for India, whose professionals account for the vast majority of H-1B visa recipients and play a critical role in the US technology sector.

Court rejects administration's authority to impose fee

According to court documents, the Trump administration introduced the fee through a presidential proclamation in September 2025, requiring employers to pay $100,000 for certain newly recruited H-1B workers from overseas.

Before the policy was introduced, employers generally paid between $2,000 and $5,000 in government filing fees depending on the petition category.

The administration maintained that the higher fee would discourage misuse of the H-1B programme and help protect American workers from foreign competition.

However, a coalition of 20 Democratic state attorneys general challenged the measure, contending that the president had effectively created a new tax without congressional approval and had exceeded authority granted under the Immigration and Nationality Act.

In his ruling, Sorokin sided with the states.

The judge wrote that the "substance and application" of the payment demonstrated that it functioned as a tax regardless of how it was described, adding that only Congress possesses the authority to impose such a levy.

Why the decision matters for Indian professionals

The H-1B programme allows US employers to hire foreign workers in specialised occupations that typically require at least a bachelor's degree.

The programme provides:

• 65,000 regular H-1B visas annually

• An additional 20,000 visas reserved for holders of advanced US degrees

Indian professionals account for nearly 70% of H-1B beneficiaries, making changes to the programme particularly important for India's technology and engineering workforce.

The now-invalidated fee had generated widespread concern among Indian IT services firms, technology professionals and multinational employers that depend on skilled foreign talent.

Industry observers warned that such a substantial increase in costs could discourage employers from sponsoring overseas professionals and reduce opportunities for skilled workers seeking employment in the United States.

Business groups warned of broader economic impact

The fee represented one of the most aggressive restrictions introduced by the Trump administration on employment-based immigration.

Business organisations argued that the measure would make H-1B hiring prohibitively expensive for a range of institutions, including:

• Technology companies

• Universities

• Hospitals

• Startups

• Small and medium-sized businesses

The coalition challenging the policy also argued that the increased cost would harm state economies by restricting access to highly skilled workers who contribute to innovation, healthcare, education and technology development.

Demand for new visas fell sharply

Evidence presented in court suggested that the fee had a significant impact on employer participation in the programme.

According to Bloomberg reporting and court filings cited in the case, only a small number of employers paid the fee after it came into effect.

Key figures highlighted in the case include:

• The fee increased costs from thousands of dollars to $100,000 per worker

• As of mid-February, the US government had received only 85 payments

The low uptake suggested that the policy substantially reduced demand for new H-1B petitions and created a major financial barrier for employers considering international recruitment.

Legal battle far from over

The Massachusetts ruling adds to an emerging judicial divide over the policy.

In a separate challenge brought by the US Chamber of Commerce and other business groups, a federal judge in Washington previously upheld the fee, concluding that the president held broad authority under immigration law to restrict the entry of foreign nationals.

That decision remains under appeal.

Legal experts expect the Trump administration to challenge Sorokin's ruling before the US Court of Appeals for the First Circuit and potentially seek permission to keep the fee in place while litigation continues.

The administration has consistently defended the measure as part of a broader effort to reshape employment-based immigration and prioritise domestic workers.

A temporary reprieve for employers and skilled workers

For now, the ruling effectively blocks enforcement of the fee nationwide and removes a significant financial obstacle for organisations seeking to hire skilled foreign professionals through the H-1B programme.

The decision offers immediate relief to employers, educational institutions and thousands of prospective visa applicants, particularly from India, who viewed the fee as a major threat to access and affordability. While further appeals are likely, the judgment represents an important moment in the continuing legal and political debate over the future of high-skilled immigration in the United States.