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Here's Why 20 States Are Taking Donald Trump To Court Over A Little-Noticed H-1B Visa Fee Change

Benzinga·12/14/2025 15:15:31

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A group of 20 states, with California at the forefront, has initiated a lawsuit against the Trump administration. The legal action is in response to a recent imposition of a $100,000 fee on H-1B visa petitions, which the states argue is not only unlawful but also poses a threat to public sectors that rely on skilled foreign labor.

What Happened: The lawsuit, led by California Attorney General Rob Bonta, alleges that the Department of Homeland Security (DHS) has overstepped its congressional authority by imposing the fee and has bypassed necessary notice-and-comment procedures.

The fee, which is more than tenfold the typical H-1B fees, could put a strain on institutions such as schools, universities, and hospitals that rely on H-1B workers.

As per the report by Insider, the executive order enforcing the new fee was signed by President Donald Trump on September 19. The states involved in the lawsuit argue that the rule could be selectively enforced as the DHS has broad discretion in deciding which applications are subject to it.

Also Read: Trump Backs Immigration Visas, Musk Praises His Stance and Says ‘Rising Tide Lifts All Boats’

While many government and nonprofit employers are exempt from the program’s annual cap, they are not exempt from the new fee. This change, according to California officials, could exacerbate the recruitment of teachers and clinicians amid deepening nationwide shortages.

The lawsuit intensifies the mounting legal pressure on the Trump administration. The U.S. Chamber of Commerce, along with a coalition of unions, nonprofits, and a healthcare staffing firm, has filed separate challenges, calling the fee "draconian," "extortionate," and an unconstitutional overreach into Congress's taxing authority.

The administration defended the rule, with White House spokesperson Taylor Rogers stating that the action on H-1B visas discourages companies from spamming the system and driving down American wages, while providing certainty to employers needing to bring in top talent from overseas.

The new rule has also stirred uncertainty in Silicon Valley, where companies like Amazon (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT), Meta (NASDAQ:FB), and Apple (NASDAQ:AAPL) heavily rely on H-1B hires. Some leaders have expressed concerns that the change could push jobs abroad.