Efforts by the Trump administration to increase H-1B visa costs have hit a legal roadblock after a federal judge ruled the policy unlawful, according to a Financial Times report.
On Monday, Judge Leo Sorokin of the United States District Court ruled in a lawsuit filed by 20 Democratic-led states that the administration lacked the authority to impose the $100,000 payment requirement for H-1B visas.
Sorokin said the $100,000 charge amounted to an unauthorised tax, which only Congress has the power to impose. "Here, the substance and application of the $100,000 payment reveal that it is a tax, regardless of what the payment is called," he said, adding that the policy's "obvious purpose" was to raise revenue.
The judge further found that the immigration laws cited by the administration did not give the president the authority to levy such a tax, making the policy a violation of constitutional separation-of-powers principles.
However, the Department of Justice (DOJ) argued that the payment requirement was lawful under the president's broad immigration and commerce powers, a position the court ultimately rejected.
The ruling comes at a time when the Trump administration is pushing to reduce U.S. companies' reliance on foreign workers. In defending the proposal, the administration cited reports alleging that some technology companies had replaced American workers with H-1B visa holders, arguing that stricter rules were needed to protect domestic employment opportunities.
Ogbonda Chivumnovu
According to the Financial Times, H-1B registrations declined 25.3%, falling from 479,953 in fiscal year 2025 to 358,737 in fiscal year 2026 after the fee was introduced. At $100,000 per year, the payment requirement represented a sharp increase from the previous H-1B fee system, under which employers paid $215 to enter the visa lottery and $780 to sponsor applicants.
At $100,000 per year, the proposed fee marks a sharp increase from the previous H-1B fee system, under which employers paid $215 to enter the visa lottery and $780 to sponsor applicants.
Despite the astronomical increase, Techloy previously reported that more than 200,000 H-1B applications were submitted through the $100,000 route, highlighting the programme's continued importance to employers seeking highly skilled foreign workers.
The ruling also adds a new layer to an already long-running debate over how far the executive branch can go in reshaping the H-1B programme without congressional approval. While the administration framed the measure as necessary to protect American workers and raise standards within the visa system, the court's decision highlights the legal limits of using financial barriers to alter immigration policy.
For employers in sectors that depend heavily on foreign talent, the decision could remove immediate uncertainty around the proposed cost structure, even as broader political tensions around skilled immigration remain unresolved.
With the Department of Justice expected to appeal, the dispute over H-1B fees is likely to continue, keeping the future of one of the United States' most closely watched work visa programmes in legal and political contention.
David Adubiina
