California leads the legal charge as the new levy threatens tech, healthcare, and education sectors across America
A coalition of 20 US states has launched a major legal challenge against the Trump administration. Led by California and Massachusetts, these states filed a lawsuit on Friday to block the new H-1B visa fees. This controversial policy, introduced via a presidential proclamation in September, imposes a staggering $100,000 charge on fresh petitions. Critics argue that this levy effectively shuts the door on skilled foreign workers. Consequently, the lawsuit claims the administration has overstepped its legal authority by bypassing Congress to implement such a drastic financial barrier.
Also Read: Trump’s gold card programme launches, opening a new route to U.S. residency for wealthy applicants
A Blow to Essential Services
The states argue that the new H-1B visa fees will devastate critical public sectors. While the policy aims to prioritise American workers, it inadvertently targets industries facing severe labour shortages. For instance, rural hospitals rely heavily on foreign doctors, and public schools frequently recruit bilingual teachers through this programme. Therefore, an additional $100,000 cost per hire is budgetarily impossible for non-profit and state-funded institutions. Officials warn that this could lead to immediate staffing crises in emergency rooms and special education classrooms across the country.
Legal Battle Over Executive Power
At the heart of the complaint is a constitutional argument regarding the “power of the purse”. The attorneys general contend that only Congress has the right to set fees that generate revenue rather than merely covering administrative costs. The lawsuit asserts that the new H-1B visa fees violate the Administrative Procedure Act (APA) because they were rolled out without the mandatory notice-and-comment period. Moreover, the fee amount bears no relation to the actual cost of processing a visa application. Thus, the states claim this is an illegal tariff disguised as an administrative fee.
Global and Corporate Fallout
The ripple effects of this policy are already visible in the corporate world. Major technology firms, which historically utilise the largest share of these visas, have paused their hiring plans for international talent. Furthermore, this move has caused anxiety among Indian IT professionals, who receive nearly 70 per cent of these visas annually. If the courts do not issue an injunction, companies may shift their expansion plans to countries with more welcoming immigration policies, such as Canada. Hence, the new H-1B visa fees could paradoxically harm US competitiveness in the long run.
The Hinge Point
While headlines focus on the six-figure sum, the deeper implication is the weaponisation of administrative procedure. This move shifts the H-1B debate from “immigration quotas” to “financial exclusion”. By imposing the new H-1B visa fees, the executive branch is effectively rewriting immigration law without changing a single statute. It sets a dangerous precedent where a President can functionally ban a legal visa category simply by making it unaffordable. This strategy bypasses legislative gridlock but creates a volatile environment where visa costs become a tool of executive whim rather than stable economic policy.