Boston, July 24: In a significant legal setback for the Donald Trump administration, a federal appeals court on Friday refused to suspend a lower court ruling that blocked the imposition of a $100,000 fee on new H-1B visas, allowing the earlier decision to remain in effect while the legal battle continues.
The 1st U.S. Circuit Court of Appeals in Boston declined the administration’s request to stay a June ruling that invalidated the steep visa fee. The judges found that the government had failed to demonstrate it was likely to succeed in overturning the decision on appeal, indicating that the administration may have acted beyond the authority granted by Congress.
The dispute stems from a lawsuit filed by 20 Democratic state attorneys general, who argued that the massive fee effectively amounted to a new tax imposed without congressional approval. A federal district judge agreed with that argument in June, ruling that the administration lacked the legal authority to introduce such a charge through executive action.
In its latest order, the three-judge appellate panel upheld the lower court’s reasoning for now, concluding that the administration had not provided sufficient grounds to justify suspending the ruling while the appeal proceeds.
The controversial fee was introduced through a presidential proclamation issued in September, dramatically increasing the cost of hiring foreign professionals under the H-1B visa program. Before the policy change, employers generally paid between $2,000 and $5,000 in government filing fees, depending on the type of application and other requirements. The new proposal would have increased the cost to $100,000 for certain new H-1B petitions.
The H-1B visa program is widely used by U.S. technology companies and other employers to recruit highly skilled foreign professionals in fields such as software engineering, healthcare, finance, research, and engineering. Federal law currently allocates 65,000 regular H-1B visas each year, along with an additional 20,000 visas reserved for applicants holding advanced degrees from U.S. universities. Successful applicants are generally authorized to work in the United States for three to six years.
While announcing the policy, President Trump argued that some employers had exploited the H-1B system by replacing American workers with lower-paid foreign employees. According to the administration, the higher fee was intended to discourage misuse of the program and encourage companies to prioritize domestic hiring.
However, critics contended that the proposal would have imposed an excessive financial burden on businesses, particularly those that rely on international talent to fill specialized positions where qualified American workers are in short supply. State officials also argued that the fee could negatively affect innovation, research institutions, healthcare providers, and industries dependent on skilled immigrant workers.
Notably, the proposed fee was designed to apply only to new H-1B visas issued abroad and did not cover foreign nationals already present in the United States on student visas who later transition to H-1B status. Since the policy was introduced, relatively few employers have chosen to pay the elevated fee, limiting its practical impact.
The latest appellate decision keeps the lower court’s injunction in place while the broader legal challenge continues. The White House did not immediately issue a response following the ruling.
The outcome of the case could have significant implications for the future of U.S. immigration policy and the extent of executive authority to alter visa-related fees without explicit approval from Congress. Until a final decision is reached, employers seeking to hire skilled foreign workers under the H-1B program will continue operating under the existing fee structure.