- Employers cut H-1B lottery entries sharply after the Trump administration imposed a $100,000 fee in September 2025.
- DHS data showed hardest-hit firms saw 85% to 100% fewer registrations, especially IT staffing and tech companies.
- A federal court blocked the fee in June 2026, while DHS later proposed a $103,265 replacement charge.
Employers most reliant on overseas H-1B hiring sharply reduced their participation after the Trump administration introduced a $100,000 fee in September 2025. Department of Homeland Security data showed lottery entries at the hardest-hit firms fell 85% to 100% this year.
The latest cycle produced about 344,000 registrations, a decline of more than 25% from 2024. The total also fell below half of the 759,000 registrations recorded in 2023.
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The drop was concentrated among companies that use the program to recruit abroad. IT staffing businesses and technology firms recorded the steepest effects.
The H-1B system is capped at 85,000 new visas annually. That total includes 65,000 regular-cap visas and 20,000 reserved for workers with U.S. advanced degrees.
Demand normally exceeds the cap, forcing U.S. Citizenship and Immigration Services to select registrations through a lottery. The new charge changed the calculation for companies hiring workers outside the United States.
The surcharge disrupted hiring before courts blocked it
The administration applied the charge to certain H-1B workers entering from abroad. Hospitals, universities, and technology employers reported hiring disruptions after the September 2025 policy took effect.
A separate analysis of USCIS figures found that initial consular H-1B petitions dropped 91.2% between September 21, 2025 and May 24, 2026, compared with the same period a year earlier.
A federal court halted the policy in June 2026. U.S. District Judge Leo Sorokin in Massachusetts ruled that the charge functioned as an unlawful tax requiring congressional approval. The First Circuit later declined to restore it, leaving the government’s appeal pending in late summer 2026.
U.S. District Judge Leo Sorokin wrote:
“The President had no power or delegated authority to impose a tax on H-1B petitions.”
The ruling came after the fee had already altered employer behavior. Its effect appeared most clearly in registrations tied to overseas hiring and in petitions requiring consular processing.
The registration figures show where demand fell
The available figures trace the decline across the program and among employers identified by DHS:
| Measure | Figure | Period or comparison |
|---|---|---|
| Latest H-1B registrations | 344,000 | Latest cycle |
| Registrations in 2023 | 759,000 | Earlier cycle |
| Decline among companies identified by DHS | 68% | FY 2026 to FY 2027 |
| Applicants from abroad | 85 | First five months |
| Government collections | $8.5 million | First five months |
| Decline in applications | 87% | First five months |
| Reduction in agency revenue | $28 million | First five months |
The companies identified by DHS filed 68% fewer cap registrations between FY 2026 and FY 2027, according to one analysis. The figure points to a sharper contraction among particular users than the overall registration count suggests.
The government collected $8.5 million from 85 applicants abroad during the first five months of the charge. Applications fell 87% during that period, reducing agency revenue by $28 million.
Critics argued the policy could restrict access to a program already limited by statute. DHS defended the payment as a way to recover federal administrative costs and discourage employers from selecting H-1B workers when qualified U.S. workers are available.
DHS proposed a larger replacement charge after losing in court
The legal defeat did not end the administration’s effort to raise the cost of new cap-subject petitions. On August 24, 2026, DHS proposed a $103,265 fee for those petitions.
The new proposal followed the court’s rejection of the earlier charge. It would apply through a different regulatory approach, while preserving the administration’s stated goal of raising funds for immigration administration.
U.S. Citizenship and Immigration Services spokesperson Zach Kahler said the proposal would support “immigration programs that otherwise must be funded by taxpayers.”
DHS said the measure would “generate additional revenue to support the costs of administering the lawful immigration system.” The agency also acknowledged that the higher price could reduce participation.
“some employers, including small entities, may file fewer petitions as a result of this proposed rule”
DHS nevertheless concluded that the fee was “appropriate.” The proposed amount is higher than the charge that produced the steepest registration decline in the latest cycle.
President Donald Trump introduced the first payment in September 2025 as part of an effort to “prioritize American workers” and overhaul the H-1B program. The government’s appeal of the court ruling remained pending as of late summer 2026.
DHS released the latest demand figures on September 8, 2026, as employers faced a new proposal and an unresolved legal fight over how far the executive branch can raise H-1B costs.
