Homeland Security wants $103,265 on every H-1B cap petition, and the figure is an $8.8bn interagency cost total divided by the statutory ceiling of 85,000

One hundred and three thousand, two hundred and sixty five dollars.

That is what the Department of Homeland Security proposed on Monday to charge for every H-1B cap-subject petition, payable when the petition is filed and on top of every other fee an employer already pays. The notice of proposed rulemaking reached the Federal Register's public inspection desk at 8.45 in the morning and publishes on Tuesday. Comments close 30 days later.

The interesting part is how the number was reached.

The denominator is the legal ceiling, not a forecast

Footnote 5 does the arithmetic in the open. DHS added up what it says the federal government spends administering the lawful immigration system across six agencies, arrived at $8,777,488,035, and divided that by 85,000. The quotient is $103,264.57. Rounded to the nearest $5, it is the fee.

Eighty five thousand is not an estimate of how many petitions will be filed. It is the statutory maximum number of workers who may be granted initial H-1B status in a fiscal year, and DHS says so in the same passage where it adopts the figure as its volume assumption. The department then states, later in the same document, that it expects filings to fall to 85,000 from a five year average of 96,750.

So the projection and the ceiling converge because the department has assumed they will.

Two thirds of the money leaves the agency that reads the petition

Table 11 sets out where the $8,777,525,000 would go. US Citizenship and Immigration Services, which adjudicates the petitions, keeps 34.2 percent, or $3,000.0m. The Executive Office for Immigration Review, the immigration courts inside the Justice Department, takes 33.7 percent, or $2,956.9m. Immigration and Customs Enforcement takes 11.9 percent, the Labor Department 13.8 percent, the State Department 5.5 percent and Customs and Border Protection 0.9 percent.

An employer sponsoring a software engineer would be funding immigration court dockets at very nearly the rate it funds the adjudication of its own petition. DHS describes this as an interagency cost recovery framework and says agreements to reimburse the other departments will be written before any final rule takes effect. None of those agreements exists yet.

The small entity finding is in the document

DHS ran the required small business analysis and did not soften the result. Of 28,649 unique cap-subject petitioners in fiscal 2025, it classified 14,541 as small entities, 8,758 as not small, and 5,350 as lacking the data to say either way. Dividing $103,265 by each small entity's revenue, it found that 76 percent of them, 11,051 employers, would face a cost increase larger than 1 percent of revenue. That is the threshold DHS itself uses for a significant impact.

It proposes no relief. The rule says an exemption or a discount for small entities would create a sizable perverse incentive for employers to avoid the fee, and that no alternative achieving the stated objective with less burden was found. The fee would apply uniformly regardless of size or nonprofit status.

What sits underneath it

The proposed fee is not the $100,000 payment from Proclamation 10973. It is separate, rests on different authority, and DHS says a petitioner caught by both would pay both.

The proclamation payment is not currently being collected. On 8 June the District of Massachusetts vacated the agency guidance implementing it, in California et al v. Mullin. The government appealed on 11 June and the First Circuit has not ruled. DHS notes that the proclamation, unless extended, expires before this fee could take effect.

For the demand argument the department leans on one paper, a February working paper by George Borjas for the National Bureau of Economic Research, which it says found employers pay H-1B workers 16.1 percent less than statistically comparable native workers, and which it says simulated demand holding at 85,000 for fees above $100,000. DHS's own regression work concludes separately that demand for these petitions is inelastic to fees.

That is the case for the number. A fee set by dividing a cost total by a cap, justified by a finding that employers are capturing enough of a wage gap to absorb it.