A federal court in Massachusetts has delivered a major ruling against the Trump Administration’s $100,000 H-1B fee proclamation. This case was brought by twenty states challenging the government’s attempt to require employers to pay $100,000 for certain new H-1B petitions. The court ruled that the policy was unlawful and vacated the agency action implementing it.

As I see it, this ruling sends one clear message: the H-1B program can be debated, changed, or reformed — but it cannot be financially strangled by executive action.

The most important part of the judgment is that the court did not treat the $100,000 charge as a normal immigration filing fee. The court said, “the $100,000 payment requirement amounts to a tax, not a penalty.” That distinction matters because taxes are controlled by Congress, not the President.

The government argued that the President had broad authority under INA Section 212(f) and Section 215(a) to restrict the entry of foreign nationals. The court did not accept that argument. It stated that “INA §§ 212(f) and 215(a) do not delegate Congress’s taxing power.” In simple terms, the President may have broad authority to restrict entry in certain circumstances, but that does not mean he can impose a $100,000 tax on H-1B employers.

The court also made an important point about the H-1B program itself. It said, “Hiring workers pursuant to the H-1B program is plainly lawful.” This is a powerful statement because the H-1B program was created by Congress and remains part of U.S. immigration law. A President cannot practically destroy a congressionally created program by adding an unauthorized financial barrier.

Let me say it directly: if the government wants to kill or reshape the H-1B program, it must go to Congress — not sneak in a six-figure wall through a proclamation.

The court rejected the argument that the charge was not really a tax because it was collected by DHS rather than the IRS. The court stated, “An obvious purpose of the Policy is to raise revenue.” It went even further, saying, “every $100,000 payment made pursuant to the Policy does raise revenue. That is indisputable.”

The separation-of-powers issue was central to the judgment. The court explained that “the President has no authority to levy a tax unless such a power is delegated by Congress through statute.” Because Congress did not delegate that power here, the court concluded that “the Policy imposes a tax on H-1B petitions without the requisite delegation by Congress.”

The court also found violations of the Administrative Procedure Act. The agencies did not go through proper notice-and-comment rulemaking before implementing this major new requirement. The court also held that the agencies exceeded their authority, stating that “Defendants’ actions in issuing the Policy exceeded their statutory authority in violation of the APA.”

Another major point was that USCIS could not justify this as an adjudication fee. The court said, “The $100,000 payment requirement plainly does not constitute an adjudication fee.” That is important because USCIS fee authority is generally tied to recovering the cost of processing applications, not creating a massive revenue-raising charge.

On the scope of relief, the court rejected the government’s request to limit relief only to the plaintiff states. The court explained that APA vacatur “operates upon the agency action itself.” This means the ruling is not just a benefit for the twenty states that sued; it affects the agency policy itself.

The bottom line is clear: the court vacated the policy implementing the proclamation. The strongest closing line from the judgment is that “the Court hereby vacates the Policy implementing the Proclamation.”

For employers and H-1B workers, this is a major relief. However, this may not be the final word. The government can appeal and may request an emergency stay. If a stay is granted, the fee could temporarily come back while the appeal is pending.

My final word is this: today this is a victory for employers and H-1B workers, but tomorrow the battle may move to the Court of Appeals. Celebrate the ruling, but do not sleep on the litigation.

By: Rahul Reddy

Rahul Reddy is the founding partner of Reddy Neumann Brown PC. He founded our firm in 1997 and has over 28 years of experience practicing employment-based immigration. Rahul‘s vast knowledge of the complex immigration system makes him an invaluable resource and an expert in the field. His personal experience with the immigration system has made him empathetic to each of his clients’ cases and empowered him to help others achieve the American Dream.

Rahul‘s dedication to serving the immigrant community is evident, from his daily free conference calls to his weekly immigration Q&As on Facebook and YouTube Live. He is an active member of the immigrant community and one of the founders of ITServe Alliance. He has been a member of American Immigration Lawyers Association since 1995.