NEW YORK, July 25: In a significant setback for the Trump administration, a US federal appeals court has refused to suspend a lower court ruling that invalidated the proposed $100,000 fee on H-1B visas, concluding that the administration lacked congressional authority to introduce such a charge.
A three-judge panel of the First Circuit Court of Appeals in Boston rejected the federal government’s request to stay the June 8 decision delivered by US District Judge Leo T. Sorokin. The earlier judgment had declared the fee an unlawful tax, stating that the executive branch cannot impose such a financial burden without explicit approval from Congress.
In its order issued on Friday, the appeals court ruled that the administration had not demonstrated sufficient legal grounds to overturn the lower court’s decision while the appeal remains pending.
Congressional Approval at the Heart of the Dispute
The legal challenge was brought by 20 Democrat-led states, which argued that the administration had exceeded its executive authority by introducing the unprecedented visa fee.
The appeals court agreed with the plaintiffs, emphasizing that the central issue was not whether Congress could delegate such authority, but whether it had actually done so.
Quoting long-established legal principles, the judges observed that the administration failed to identify any statute clearly empowering the executive to impose such a substantial financial obligation on visa applicants.
Supreme Court Precedent Strengthens the Ruling
The court relied on a 1989 US Supreme Court precedent, which requires Congress to speak clearly before granting the executive branch authority to impose significant financial burdens described as either taxes or fees.
According to the ruling, the Trump administration did not adequately explain why that legal standard should not apply in this case, weakening its request for a stay.
The judges also found the government’s arguments regarding potential harm to be insufficient. They noted that the administration merely claimed the plaintiff states would face minimal injury without offering meaningful legal or factual support for that position.
Background of the Controversial Visa Fee
President Donald Trump announced the $100,000 H-1B visa fee through a presidential proclamation in September last year, describing it as part of broader efforts to reform the US immigration system and prioritise domestic employment.
The proposal would have represented one of the most dramatic increases ever imposed on the H-1B visa programme. Existing H-1B processing fees generally range between $2,000 and $5,000, making the proposed amount many times higher than current costs.
Critics argued that the move would discourage companies from hiring highly skilled foreign professionals and significantly raise recruitment costs across industries dependent on international talent.
Importance of the H-1B Visa Programme
The H-1B visa remains one of the most important pathways for skilled foreign professionals seeking employment in the United States. It enables American employers to recruit experts in fields requiring specialised knowledge, including software engineering, artificial intelligence, healthcare, finance, scientific research and engineering.
Technology companies, in particular, rely heavily on the programme to address shortages of highly qualified workers. Professionals from India and China account for the majority of H-1B visa recipients each year.
Under the current system, the United States grants 65,000 regular H-1B visas annually, along with an additional 20,000 visas reserved for applicants holding advanced degrees from US educational institutions.
Implications for Employers and Skilled Workers
The appeals court’s decision provides temporary relief for both employers and foreign professionals while the broader legal challenge continues.
If implemented, the proposed fee would have substantially increased hiring costs for businesses dependent on international talent and could have discouraged many skilled workers from applying for positions in the United States.
For now, the existing H-1B fee structure remains unchanged, allowing employers to continue sponsoring qualified foreign workers under the current regulations as the legal proceedings move forward.
The ruling also reinforces the principle that major financial obligations affecting immigration policy must receive clear authorisation from Congress rather than being introduced solely through executive action.