Judge Strikes Down H-1B $100,000 Fee

One of the cornerstones of the president’s efforts to reduce legal immigration was to charge employers $100,000 a piece for any foreign nationals they bring in with an H-1B visa. Although the president asserted that many of the employers who would be affected “love it,” few CEOs in the tech sector that relies heavily on H-1B talent seemed excited by the idea. 

Many of the higher education institutions and health care facilities were upset by it, particularly those in rural areas. Skilled workers in needed occupations often don’t want to relocate to rural areas, so facilities have to rely on H-1B workers for needed teachers, nurses and doctors. The $100,000 fee makes it hard if not impossible for many to bring in needed staff through the H-1B program.

On Monday, June 8, U.S. District Court Judge Leo Sorokin struck down the $100,000 fee for employees who come in on an H-1B visa. "The Court finds that the Policy imposes a tax on H-1B petitions without the requisite delegation by Congress," Sorokin wrote.

The administration contended that the $100,000 was a "regulatory payment" not a tax, but Sorokin wasn't convinced. "Defendants offer no definition for what constitutes ‘a regulatory payment,’ cite no cases or statutes employing the term, and advance no reasoned argument explaining how this term encompasses something different than a tax or a penalty,” he wrote. 

Sorokin ruled that the fee violated the Administrative Procedure Act.He saw no evidence that the policy went through any deliberate process or request for public comment, both of which are not only required by law but would seem particularly important in a decision that would have the impact this one does.

While the focus of H-1B conversations is on the tech sector, which uses between 50 and 70 percent of the H-1Bs available in a year (depending on the study), higher education and health care are a more meaningful part of the story in terms of community well-being. The case in Boston was argued on those grounds, that states would receive diminished health care and declining higher education institutes because the $100,000 barrier made it harder to staffing shortfalls with foreign nationals.

“Today's victory protects the integrity of the H-1B visa program as a tool to address severe labor shortages in vital industries like education, healthcare, and medical research," Massachusetts Attorney General Andrea Joy Campbell said in a statement. "In Massachusetts, this win will ensure we can fill critical vacancies and hire world-class faculty and researchers at colleges and universities across the Commonwealth."

Not surprisingly, the administration plans to appeal the ruling. Employers that use or want to use H-1B visas to bring in talented foreign nationals should consult with an experienced immigration attorney to see how this decision could affect their plans and goals.

Photo by Hush Naidoo Jade Photography on Unsplash.