US states challenge proposed USD 103,265 H-1B fee over impact on workers and employers

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A coalition of 22 US attorneys general has opposed the Trump administration's proposal to impose a fee exceeding $100,000 on certain H-1B visa petitions, arguing that the measure is unlawful and would worsen shortages of teachers, doctors and nurses.

The challenge is significant for Indian professionals and American companies that rely heavily on the H-1B programme to recruit highly skilled workers. Virginia Attorney General Jay Jones joined the coalition in filing a formal comment letter asking US Citizenship and Immigration Services, or USCIS, to withdraw the proposed rule.

The agency issued the notice of proposed rulemaking on August 25. It would impose a charge of $103,265 on petitions filed by employers that are not exempt from the annual H-1B visa cap. The attorneys general characterised the proposed charge as a tax. They argued that the executive branch cannot impose such a tax without authorisation from Congress.

The coalition also said the rule would exceed USCIS' authority under the Immigration and Nationality Act and violate the Administrative Procedure Act. According to the attorneys general, the administration has failed to justify the burden that the proposed charge would impose on states. They also said USCIS had not adequately considered less damaging alternatives.

The coalition objected to the 30-day public comment period, describing it as unusually short and insufficiently justified. The proposed charge could make it more difficult for state and local institutions to recruit skilled foreign professionals, the attorneys general said. They cited shortages in primary and secondary education, healthcare and other essential services.

"Individuals in this class are more than just names on papers - they are our teachers, doctors, nurses, caretakers, and more. They are our neighbors and friends and family," Jones said. "They have filled out every form and met every government demand to come here and be part of the American Dream," he said.

Jones accused the administration of stretching its executive authority without adequately considering the effect on communities and public services. "Donald Trump is trying to close the door by pushing the boundaries of executive power, indifferent to the burden this proposed rule will put on Virginians," he said.

"Here in Virginia, we fight for our communities, and my office will use every legal tool to make sure this proposal doesn't go any further." The coalition said a previous administration attempt to impose a similar charge had been struck down. It argued that the new proposal again seeks to impose a tax through administrative action instead of seeking approval from Congress.

Besides Virginia, the coalition includes the attorneys general of California, Massachusetts, Arizona, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Michigan and Minnesota. It also includes Nevada, New Jersey, New Mexico, New York, North Carolina, Oregon, Washington, Wisconsin and the District of Columbia.

The H-1B programme allows US employers to hire foreign workers in specialty occupations that generally require specialised knowledge and at least a bachelor's degree or its equivalent. Technology companies are among its largest users, but hospitals, schools, universities and research institutions also employ H-1B professionals.

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