H-1B Fee Challenge Faces Tough Questions as Litigation Expands

(MASSACHUSETTS) A coalition of 20 Democratic-led states filed suit in federal court here on December 12, 2025, seeking to block President Trump’s new H-1B fee, a $100,000 supplemental fee that the states say would price public employers and many private businesses out of the specialty-worker program.

The case, State of California, et al. v. Kristi Noem, et al. (1:25-cv-13829, D. Mass.), names Department of Homeland Security Secretary Kristi Noem as a defendant and attacks a September 19, 2025 proclamation ordering DHS to collect the extra charge on certain new H-1B petitions.

Who is bringing the challenge

California Attorney General Rob Bonta and Massachusetts Attorney General Andrea Joy Campbell are leading the multistate challenge. The suit is joined by the following states:

• Arizona
• California
• Colorado
• Connecticut
• Delaware
• Hawaii
• Illinois
• Maryland
• Massachusetts
• Michigan
• Minnesota
• Nevada
• New Jersey
• New York
• North Carolina
• Oregon
• Rhode Island
• Vermont
• Washington
• Wisconsin

Court schedule and related litigation

Despite early online talk about “tough questioning” from a judge, no court hearing featuring such questioning on the H-1B fee challenge had occurred as of December 19, 2025, according to the provided case updates.

A nearby court date on the calendar is December 19 in a separate business-backed lawsuit, U.S. Chamber of Commerce v. DHS, in federal court in Northern California. In that case the Chamber seeks a preliminary injunction to stop U.S. Citizenship and Immigration Services (USCIS) from enforcing the fee while litigation proceeds.

Core legal arguments by the states

The states make multiple legal and financial claims in the complaint:

• The White House and DHS attempted to remake the H-1B program via a fee that Congress never approved.
• The proclamation allegedly sidesteps the Administrative Procedure Act (APA), which normally requires agencies to publish proposed rules and accept public comments before major changes take effect.
• The new charge is described as “arbitrary and capricious,” meaning the government failed to provide a reasoned explanation tied to facts and law.

“Arbitrary and capricious” is a legal term the states use to argue that the government did not provide a reasoned factual and legal basis for the fee.

Financial and separation-of-powers claims

• The states note current government fees tied to an H-1B filing generally range from $1,000 to $7,600.
• They argue a leap to $100,000 cannot be justified as a cost-based user fee and effectively turns a visa processing fee into a revenue tool.
• This, they say, raises separation-of-powers concerns, because the Constitution gives Congress — not the executive branch — authority over revenue and immigration fees.
• DHS has not provided, in the supplied material, a public breakdown showing how an extra $100,000 reflects the actual cost of adjudicating a petition.

Administration’s stated rationale and counterarguments

The proclamation asserts the new fee is meant to respond to “systemic abuse” of the H-1B program and to protect economic and national security, arguing that the visa can disadvantage U.S. workers. Supporters say cheaper access to foreign professionals can depress wages in some sectors.

The states counter that the H-1B category is often used for hard-to-fill roles in public services, and they emphasize longstanding labor rules requiring employers to pay required costs for the petition and barring passing certain fees to workers (citing 20 C.F.R. § 655.731(c)(9)(iii)(C)).

Practical impacts highlighted in the complaint

The complaint highlights public employers and high-need sectors as early casualties:

• Schools: Chicago Public Schools uses H-1B for bilingual education and special education positions; Baltimore City Public Schools relies on it to staff classrooms amid local shortages.
  • A $100,000 supplemental fee on top of existing charges could mean fewer teachers, larger class sizes, or canceled programs, the states argue — even though workers themselves would not pay the fee.
• Hospitals and universities: Public hospitals and research institutions depend on specialty workers for key roles; the states warn budgets for services and research could be hit.
• The overall concern: even if employers must pay, many employers are public agencies funded by taxpayers, so the fee effectively shifts costs to the public.

Employers file H-1B requests with USCIS using Form I-129; the form and instructions are posted at USCIS’s Form I-129 page.

Broader policy and economic effects

• Analysis by VisaVerge.com suggests the sudden size of the H-1B fee could force employers to choose between staffing needs and other core services, making the dispute more than a Washington policy debate.
• Immigration attorney Hiba Anver of Erickson Immigration Group said the states’ pushback shows how quickly immigration costs can become a local issue. She also questioned whether the lawsuit will gain traction based on her reading of the legal claims and court tendencies.
• For employers, workers, and families, the uncertainty itself is a cost: recruiters may pause, job offers may be delayed, and families may hesitate to move or change schooling when they do not know whether a petition will be priced out by a fee that dwarfs past charges.

Other lawsuits and the central legal question

• Washington state filed a separate challenge on December 15, 2025, led by Attorney General Nick Brown.
• The business community’s suit in California (U.S. Chamber of Commerce v. DHS) was filed earlier, on October 3, 2025.

All three cases center on the same fundamental question:

1. Can the executive branch impose a fee of this size by proclamation and agency action?
2. Or does such a move require Congressional approval and the usual APA rulemaking process?

Until a judge issues an order, the policy’s immediate effect may depend on:
– How quickly employers must submit new filings, and
– Whether USCIS treats the added payment as a hard condition of entry for certain workers.

What to expect next

• State lawyers argue the proclamation functions as a gate: if an employer cannot or will not pay, the worker cannot start the job in H-1B status — a major change announced without the usual public record.
• The court docket to date reflects filings, not findings, and the states have not pointed to any judge endorsing the policy.
• A first legal test could come quickly if courts entertain emergency requests to pause enforcement in the coming weeks.

The states are asking the federal court in Massachusetts to stop the proclamation and DHS’s implementation before it reshapes hiring plans across the United States 🇺🇸.