$100,000 H-1B Fee Upheld: What Tech Companies and Startups Need to Know in 2026

In a landmark decision that will reshape the landscape of high-skilled immigration in America, a federal district court has upheld the controversial $100,000 supplemental fee for H-1B visa applications. The ruling, issued in late December 2025 by U.S. District Judge Beryl Howell, represents a significant victory for the Trump administration's immigration policy agenda and a major blow to tech companies and startups that rely on foreign talent.

The supplemental fee, announced in September 2025, applies to all new H-1B petitions filed after September 21, 2025. This represents a dramatic escalation from the previous filing costs of approximately $700 to $1,500, marking one of the most significant immigration fee increases in recent history. The fee applies to every H-1B petition with no exemptions for startups, small businesses, or nonprofit research institutions.

Judge Howell's ruling determined that the presidential proclamation imposing this fee falls within the executive authority granted under Section 212(f) of the Immigration and Nationality Act. This provision allows the President to impose restrictions on the entry of foreign nationals if deemed detrimental to U.S. interests. The court rejected arguments from the U.S. Chamber of Commerce and the Association of American Universities that the fee exceeded presidential authority.

The immediate impact on tech companies and startups has been significant and swift. Industry experts note that small businesses and early-stage startups are bearing the brunt of this policy change. Many startups depend on specialized technical talent to develop products quickly and compete in fast-moving markets. For these companies, a six-figure fee per H-1B petition is often financially prohibitive, effectively eliminating the option of hiring foreign workers on H-1B visas during their critical growth phases.

The timing of the fee's implementation creates particular challenges for employers. The supplemental fee will affect H-1B cap petitions filed during the April to June 2026 registration window for Fiscal Year 2027 employment beginning October 1, 2026. It also applies to new petitions filed by cap-exempt employers such as universities and research institutions. However, there is a critical exemption that provides some relief: petitions filed for change of status or extensions for individuals already present in the United States are not subject to the supplemental fee.

This exemption is particularly important for employers seeking to hire F-1 students, H-4 employment authorization holders, or other nonimmigrants already in the country who wish to transition to H-1B status. These applicants can still be sponsored without incurring the $100,000 fee, creating a two-tier system that favors hiring foreign nationals already present on U.S. soil.

The legal battle is far from over. On December 29, 2025, plaintiffs filed a notice of appeal to the U.S. Court of Appeals for the D.C. Circuit. In a significant development, the appellate court granted the Chamber of Commerce's request to fast-track the case, with oral arguments scheduled for February 2026. Two additional lawsuits challenging the proclamation are pending in federal courts in California and Massachusetts, where twenty states have joined forces to contest the fee.

Employers are already adjusting their hiring strategies in response to this new reality. Some companies are shifting focus to recruiting domestic talent or considering alternative visa categories. Others are exploring global expansion strategies, establishing operations in countries with more favorable immigration policies to access international talent pools. The disruption to talent pipelines has been particularly acute in sectors like software development, artificial intelligence, and biotechnology, where specialized skills are in high demand.

The wage-based weighted lottery system, another major H-1B reform, adds another layer of complexity. While the selection process remains random, higher salary offers will increase the probability of selection in the lottery. The March 2026 registration season represents the first full implementation of this wage-weighted system, forcing employers to reconsider their compensation strategies for H-1B candidates.

For small businesses facing this new landscape, the financial calculus has fundamentally changed. A startup with limited runway and tight budgets must now weigh the $100,000 fee against the value a foreign worker might bring to the organization. This cost-benefit analysis often results in difficult decisions to forgo international hiring altogether, potentially limiting access to critical talent and slowing innovation.

As the appeals process moves forward in 2026, employers find themselves in a state of uncertainty. The fast-tracked appeal could bring clarity by spring, but until then, companies must navigate the current fee structure while planning for multiple potential outcomes. The February oral arguments will be closely watched by the business community, immigration advocates, and policy makers as they seek to understand how courts will balance presidential immigration authority against economic considerations and employer needs.

The broader implications extend beyond individual companies to the competitiveness of the American economy in attracting global talent. As other countries actively court skilled workers with streamlined immigration processes and favorable policies, the $100,000 H-1B fee represents a significant barrier that could influence where international talent chooses to build their careers and where innovative companies choose to establish their operations.