Analysis
What Happened
The Trump administration proposed a new regulation Monday that would charge employers $103,265 for new H-1B visa petitions, The Verge reported, reviving an effort a federal judge blocked in June when the administration first tried to impose a flat $100,000 fee by proclamation rather than through the formal rulemaking process. This time the administration is going through DHS's standard regulatory channel, which gives the rule a stronger legal footing even as it raises the price further.
DHS's own estimate puts the fee's expected revenue at roughly $8.8 billion annually, based on a projected 85,000 cap-subject H-1B petitions each year -- a number the agency frames as recovering the cost of running the broader legal immigration system, including immigration courts. The proposal also reportedly carves out exemptions for visas tied to educational institutions, nonprofits and government research organizations, a distinction the blocked June version did not make, while leaving for-profit employers, including venture-backed startups, fully exposed to the new fee.
“This time the administration is going through DHS's standard regulatory channel, which gives the rule a stronger legal footing even as it raises the price further.”
- DHS / Trump administration -- proposing the $103,265 fee through formal rulemaking after the earlier $100,000 proclamation was struck down
- Universities, nonprofits, government research labs -- reportedly exempted from the new fee under this version of the rule
- For-profit tech employers, including startups -- fully subject to the fee, with no size- or stage-based carve-out disclosed
The administration is pairing the H-1B fee proposal with a related move to revoke non-immigrant visas of people who enter the US claiming to be short-term visitors and then file for asylum to stay permanently -- a separate but simultaneously announced piece of the same immigration-enforcement push, according to the Verge's reporting.
Why It Matters for Startups
The practical effect for the venture ecosystem is concentrated at the earliest and most talent-dependent stage of company building. A $103,265 fee per H-1B hire is a meaningful line item for a Series A company hiring its first handful of specialized ML researchers or hardware engineers from abroad, in a way it simply isn't for a company at Nvidia or Google's scale -- exactly the inversion that critics of the earlier proposal flagged, where the fee's flat structure hits smallest, most talent-constrained companies hardest in dollar terms relative to their burn.
What's Next
The counterweight is that this remains a proposed rule, not a final one -- DHS is going through formal rulemaking specifically because the earlier proclamation-based version got struck down in court, and the administration has said it intends to finalize the rule by the end of 2026. That gives a comment period and a real chance of further legal challenge or modification before any startup actually has to write a $103,265 check for a new hire, and it's worth remembering the original $100,000 version didn't survive its first court test.
For any VC portfolio company currently sponsoring or planning to sponsor H-1B talent, the practical move now is modeling both scenarios -- fee finalized as proposed, and fee blocked or modified again -- into 2027 hiring plans rather than waiting for certainty that may not arrive before the rule's effective date.
