Setback for Trump as US judge strikes down $100,000 fee: How it impacts H-1B visa aspirants

What triggered the case?

The controversy began when Trump imposed a $100,000 charge through a presidential proclamation requiring employers to pay the fee for certain new H-1B workers recruited from abroad.The move immediately drew legal challenges from a coalition of 20 Democratic state attorneys general. They argued that the president had effectively created a new tax without congressional approval and had exceeded his authority under the Immigration and Nationality Act.The states also warned that the steep increase would discourage companies from sponsoring skilled foreign workers and would harm state economies, universities, hospitals and technology industries that rely heavily on H-1B talent.In his ruling, Judge Sorokin agreed with the states’ argument and held that the structure of the payment made it a tax in substance.“Here, the substance and application of the $100,000 payment reveal that it is a tax, regardless of what the payment is called,” the judge wrote, adding that only Congress has the power to impose such a levy.

What exactly changed in 2025?

In September 2025, Trump signed a proclamation titled Restriction on Entry of Certain Nonimmigrant Workers, which introduced the $100,000 fee on new H-1B petitions filed on or after September 21, 2025.The administration said the measure was intended to reform the programme, curb abuse and protect American workers.Subsequent guidance from US Citizenship and Immigration Services clarified that the fee would not apply to existing visa holders, renewals, or petitions filed before the effective date. Certain exemptions were also outlined in “extraordinarily rare circumstances”, including cases involving national interest or lack of qualified US workers.The Trump administration defended the policy as part of its “America First” approach to immigration.Officials said the fee was designed to protect US workers, discourage companies from hiring cheaper foreign labour, and generate revenue for immigration enforcement and border security.The White House also cited cases where companies had reduced domestic hiring while increasing H-1B sponsorships, arguing that the system was being misused.

Why the court struck it down

In detailed findings, the court said the policy would create widespread disruption across essential sectors such as education and healthcare.Plaintiffs argued that the fee would block recruitment of teachers, strain public universities and reduce access to specialised medical professionals.They warned that the policy would “cause cascading harm throughout the Plaintiff States” by weakening healthcare systems, increasing costs for state insurance programmes and reducing the availability of qualified professionals.Judge Sorokin agreed that these impacts reinforced concerns that the policy exceeded executive authority.

What is the H-1B programme?

The H-1B visa allows US employers to hire foreign professionals in specialty occupations that require at least a bachelor’s degree or equivalent expertise.These roles include software engineering, medicine, finance, biotechnology and academic research. The programme is widely used by technology companies to recruit engineers and coders, particularly from India and China.Before the Trump administration’s proposal, employers typically paid between $2,000 and $5,000 in filing-related costs depending on the petition type.The new rule increased that burden dramatically to $100,000 for certain new H-1B applications, making it one of the steepest immigration-related costs ever introduced. Because demand far exceeds supply, the programme operates through a lottery system.

Why it matters to Indian workers

Indian professionals dominate the H-1B system, accounting for roughly three-quarters of approvals in recent years. According to USCIS data, median salaries for H-1B professionals in technology and engineering frequently range from $110,000 to well above $140,000 annually. Because of these earnings levels, H-1B workers contribute substantial tax revenues to federal, state and local governments.Data cited by Pew Research shows that India is the top country of birth for H-1B workers. Roughly 73% of H-1B workers whose applications were approved in fiscal 2023 were born in India, with a majority of approvals every year since 2010 going to Indian-born professionals. China is the second-largest source, accounting for about 12% of approvals in 2023.Gil Guerra, an immigration policy analyst at the Niskanen Center, told the BBC in 2025 that because the fee would only apply to new H-1B recipients, it was more likely to cause medium- and long-term labour shortages rather than immediate disruption.

The ruling could also benefit Indian professionals by making it easier for US employers to continue hiring specialised foreign talent.Kuldip Kumar, Partner at Mainstay Tax Advisors, which specialises in global mobility and cross-border taxation matters, said the judgment may encourage employers who had become hesitant because of the steep additional cost.“This is a favourable development and may encourage many US employers requiring specialised foreign talent to access the global labour market, which they may have been reluctant to do because of the significant cost implications of the fee,” Kumar told TOI.

At the same time, Rajiv Dabhadkar, founder of the National Organisation for Software and Technology Professionals (NOSTOPS) said that the ruling carries a broader lesson for India.He said that the decision should also serve as a reminder that India cannot depend indefinitely on a single country as the primary destination for its skilled workforce.

What experts said

Dabhadkar said the ruling preserves the H-1B programme’s role as an important channel for global talent.“A $100,000 fee would not have been a routine cost increase, it would have fundamentally changed the business case for hiring foreign professionals, particularly Indians who form the backbone of the H-1B workforce. Had it remained in place, many employers would likely have shifted work offshore rather than import talent onshore,” he told TOI.He argued that the measure was far more than a routine immigration policy change.“The $100,000 fee was not immigration policy, it was economic exclusion dressed in legal language. The court has correctly identified it as an unauthorized tax,” he said.Dabhadkar also said the episode highlights the need for India to strengthen opportunities at home.“The deeper message to India’s knowledge workforce must be clear: the era of depending on a single geopolitical pathway for professional growth is over. India must now invest as seriously in building world-class opportunities at home as its professionals have invested in building them abroad,” he added.Kumar, however, cautioned that the legal battle may not be over.“However, it is important to note that the Federal Court’s ruling was based on the finding that the fee was, in substance, a tax. Under the US Constitution, the power to levy taxes rests with Congress and not with the President,” he said.“The ruling is therefore likely to be challenged on appeal. If a stay of the judgment is granted by the appellate court, the fee could remain in force until the litigation is finally resolved,” he added.

How did the Trump administration respond?

The Department of Homeland Security criticised the ruling, calling it judicial overreach and accusing the court of interfering in immigration reforms.A DHS statement said it disagreed with “this blatant judicial activism dismantling President Trump’s historic efforts for immigration reform.”Trump also reacted sharply, saying: “These federal judges are really giving us a hard time. It’s really crazy what’s going on with the court system… They’re hurting our country very badly.”White House spokeswoman Taylor Rogers said the administration was confident the ruling would be overturned on appeal.“President Trump has clear legal authority to restrict entry of any class of aliens he determines is not in America’s best interests, and that is exactly what he did,” she said.

What happens next?

The Massachusetts federal court’s decision means the $100,000 fee cannot currently be enforced and must be set aside. However, the legal battle is far from over. The Trump administration has already indicated its intention to appeal.The decision also highlights a growing legal split. In a separate case, a federal judge in Washington previously upheld the fee, agreeing that the administration had broad authority under immigration law to restrict entry of foreign nationals. That ruling is now under appeal.What happens next will depend on higher courts, including the US Court of Appeals for the First Circuit. The Trump administration may also seek a stay to keep the fee in effect while litigation continues.For now, though, the ruling effectively blocks the fee nationwide, offering relief to employers, universities and thousands of foreign professionals who rely on the H-1B programme to work in the United States.“Further, other restrictive measures relating to the H-1B selection process continue to remain in place. The longer-term implications will depend on the outcome of the appellate proceedings and any subsequent policy changes,” Kumar added.