Arizona AG Mayes challenges new H-1B visa fee in federal suit

(ARIZONA) Arizona Attorney General Kristin K. Mayes on December 12, 2025, joined 19 other Democratic attorneys general in a federal lawsuit seeking to block President Donald Trump’s new H-1B visa surcharge, a move the states say would price employers out of hiring needed specialists.
The complaint, filed as Case 1:25-cv-13829, challenges a September 19, 2025 order described by the plaintiffs as a proclamation imposing a $100,000 supplemental fee on certain new H-1B petitions. Mayes said the added cost threatens “a devastating effect on our rural school districts, our growing semiconductor industry, and Arizona’s entire economy” if the policy stays in place.

Who is leading the challenge and the legal basis

• California Attorney General Rob Bonta is leading the coalition, with Mayes listed as a co-plaintiff.
• The filing argues the White House bypassed Congress and the normal rulemaking process.

The states assert multiple legal claims:
– The fee violates the Administrative Procedure Act (APA) by skipping required public notice and comment.
– It exceeds fee authority under the Immigration and Nationality Act.
– The government acted “arbitrarily and capriciously,” disrupting the H-1B system Congress built and shifting a major cost onto employers.

The lawsuit requests that the court:
1. Vacate The surcharge, and
2. Enjoin enforcement of the surcharge while the case proceeds.

The proclamation and effective mechanics

• Trump signed the measure on September 19, 2025, titled “Restriction on Entry of Certain Nonimmigrant Workers” (listed as Proclamation 10,973).
• It was published on September 24, 2025 at 90 Fed. Reg. 46,027 and set an effective date of September 21, 2025.
• The proclamation applies only to petitions filed after September 21, 2025. Petitions submitted without the $100,000 payment are not processed, per administration guidance.
• The fee must be paid via pay.gov as part of filing requirements.

“A devastating effect on our rural school districts, our growing semiconductor industry, and Arizona’s entire economy.” — Kristin K. Mayes

How the surcharge departs from past practice

• The states emphasize the dramatic departure from previous fee levels: most H-1B-related fees ranged from $2,000 to $5,000.
• The proclamation’s $100,000 surcharge targets employers who:
  • Sponsor workers outside the United States 🇺🇸, and
  • Do not have a valid H-1B visa stamp for the beneficiary at the time the petition is filed.

The surcharge is tied to consular processing — meaning the worker would obtain the H-1B visa at a U.S. consulate abroad. Employers must submit proof of payment; USCIS will not process petitions missing it, the states say in court papers, a point they call unlawful.

USCIS guidance and carve-outs

• USCIS issued initial guidance on September 20, 2025, then updated it on October 20 and October 21, 2025, to clarify who must pay the surcharge.
• The agency stated the surcharge applies when:
  • The beneficiary is abroad without a valid H-1B visa at filing, or
  • The petition seeks consular processing, or
  • USCIS determines the case is ineligible for change, extension, or amendment inside the U.S.

USCIS also carved out exemptions, including:
– H-1B holders seeking renewal
– Petitions filed before September 21, 2025
– Changes or extensions for people already in the United States 🇺🇸 (including F-1 to H-1B moves)
– Change-of-employer filings

USCIS further said exceptions would be granted only in “extraordinarily rare” cases — and only if an employer requests one and supplies supporting evidence.

Practical consequences and concerns

• Lawyers and employers are watching USCIS’s frequently asked questions closely because a single filing mistake can create delays that ripple through start dates and project deadlines.
• USCIS points petitioners to its public H-1B materials, including the USCIS H-1B questions and answers page, as it applies the proclamation.
• The states argue that agency guidance cannot cure what they call a defective process that should have been subject to APA notice-and-comment rules.

Arizona-specific impacts highlighted in the complaint

• Mayes’ office said the six-figure surcharge hits hardest employers who rely on hard-to-find talent but cannot absorb sudden, large charges.
• Specific affected groups mentioned:
  • Rural school districts recruiting teachers — budgets and hiring calendars can be disrupted, and the fee could block offers already in motion.
  • Arizona’s growing semiconductor industry, which often needs engineers and specialized workers on short notice.

Economic analyses cited in the filing predict:
– Reduced H-1B inflows that could harm IT firms, universities, and some industries shifting work offshore, with increased costs passed to clients.

Additional policy changes and timing concerns

• The proclamation also directs the Department of Labor to revise how it sets prevailing wages, aiming to prioritize high-skilled, high-paid applicants.
• The states argue these instructions show the administration reshaped the H-1B program via a presidential proclamation rather than through Congress’s prescribed agency processes.

Important timing notes:
– The order’s restrictions are set to expire after 12 months unless extended.
– Employers and universities say they must plan far earlier because recruiting cycles and grant budgets often span multiple years.

Constitutional and separation-of-powers claims

• The lawsuit frames the surcharge as effectively a revenue measure that belongs to Congress, arguing the president cannot impose a fee of this scale without lawmakers’ approval.
• Plaintiffs say the administration’s approach upends Congress’s balance between attracting talent and protecting domestic workers — and does so without accounting for how the money will be used.

Current status and practical effect for employers

• As of December 15, 2025, no court has ruled on the challenge; plaintiffs seek an order vacating the policy.
• Analysis by VisaVerge.com notes the dispute may test the limits of presidential power over the H-1B program.

Practical filing implications until a judge acts:
– Employers must assess filings based on:
– Where the worker is located and
– Whether the worker already holds an H-1B visa stamp, and
– How USCIS interprets the rules.

Example of uneven impact:
– A candidate graduating in the United States 🇺🇸 may only require standard fees.
– A candidate waiting abroad could trigger the $100,000 add-on.

The attorneys general argue the uneven impact demonstrates why notice-and-comment matters — allowing schools, companies, and workers to flag harms before they hit. For now, teams are vigilantly checking USCIS updates and avoiding errors that could stall start dates.