Trump’s New H-1B Measures Raise Fresh Questions for Employers and Workers

For workers, immigration outcomes now depend more heavily on employer decisions they do not control.

The administration reports that H-1B registrations from the largest IT outsourcing firms fell 92 percent, from 24,946 to 2,055.

(Photo: Kamran Akhter/The Quint)

The White House issued two documents on 18 September 2026 that can have a significant affect on the H-1B program: a proclamation extending last year's $100,000 fee requirement, and an executive order directing federal agencies to weigh employer layoffs when reviewing H-1B filings.

Both arrive against a backdrop of ongoing litigation, a separate pending fee rule, and a year of measurable change in how the program is used.

So what is confirmed, what is being argued, and what could happen next?

Recapping Last Year's Developments

On 19 September, 2025, a presidential proclamation imposed a $100,000 payment requirement on certain H-1B petitions. Two days after it was issued, the administration narrowed its scope to beneficiaries outside the US who would need consular processing to begin work.

Petitions for changes of status, extensions of stay, and workers already holding valid H-1B visas were exempted. The policy was set to expire on 21 September, 2026.

That proclamation was one of several measures introduced over the same period. In December 2025, the Department of Homeland Security (DHS) finalised a rule replacing the random H-1B lottery with a wage-weighted selection system, used for the first time in the fiscal year 2027 cap season. The State Department expanded social media screening for visa applicants, and interview requirements were tightened.

DHS also finalised a rule to replace "duration of status" for students with fixed admission periods, though a federal court postponed that rule before it took effect.

Among confirmed effects, the administration reports that H-1B registrations from the largest IT outsourcing firms fell 92 percent, from 24,946 to 2,055, and that cap registrations overall dropped by roughly 40 percent under the wage-weighted system.

A court filing this spring showed how DHS collected the $100,000 fee on only 85 petitions between September 2025 and mid-February 2026, processed 87 percent fewer petitions in the affected category, and took in about $28 million less in H-1B revenue than the prior year. Universities reported a 20 percent decline in international undergraduate enrollment and a 24 percent decline at the master's level as of March.

The Fee Litigation

The $100,000 fee has been in court since December 2025. In June 2026, a federal district court in Massachusetts vacated the policy, holding that the charge functioned as a tax the executive branch lacked authority to impose and that the proclamation violated the Administrative Procedure Act.

A brief stay allowed collection to resume temporarily, but in July the First Circuit Court of Appeals declined to disturb the lower court's ruling. The government's appeal, along with a related challenge by the U.S. Chamber of Commerce, remains pending.

What this means in practice is, the 18 September proclamation extends the fee through 21 September 2027, but it extends a policy that is currently vacated. Unless a court rules otherwise, USCIS remains barred from collecting it.

In my view, employers should not budget for the fee on the basis of the extension alone, while recognising that the posture could change quickly on appeal.

A Second Fee Moving Separately

On 25 August 2026, DHS published a proposed rule that would impose a fee of approximately $103,265 on cap-subject H-1B petitions.

This is a regulatory fee, distinct from the proclamation, and it differs in a critical respect: it would apply to beneficiaries already in the United States, not only those abroad. Because it proceeds through a notice-and-comment process of rule-making, it is not yet in effect. The public comment period closes September 24 2026.

Supporters of restrictions argue the program has suppressed wages and displaced US workers, and the administration frames the rule as necessary to prioritise higher-skilled, higher-paid workers.

Critics, including economists and employers who have submitted comments, argue the rule exceeds DHS's statutory authority and functions as a tax that bypasses Congress.

Some have characterised it as an effort to achieve through regulation what a court found unlawful by proclamation. Both positions will be tested once the rule is finalised.

The New Executive Order

The order, titled "Enhancing Program Integrity and Interagency Coordination in the Administration of the H-1B Nonimmigrant Visa Program," does three things:

1. First, it directs the Departments of State, Labor, and Homeland Security to consider whether a sponsoring employer has, directly or indirectly, laid off similarly situated US workers within the prior year, or plans layoffs that would negatively affect such workers. This applies at every stage: the labour condition application, the USCIS petition, the consular visa, and admission at the port of entry.

2. Second, it directs those agencies to consult the Departments of Commerce and Education and the Small Business Administration for wage, employment, academic, and industry data.

3. Third, it requires the Labor Department's Wage and Hour Division to begin reviewing previously filed labour condition applications within 30 days to determine whether enforcement action is warranted.

How it Differs From Existing Law

This is where the legal debate centres. Under the American Competitiveness and Workforce Improvement Act of 1998, Congress required only "H-1B-dependent" employers and those found to have committed wilful violations to attest that they had not displaced a US worker in an essentially equivalent job during the 90 days before or after filing. All other employers were not subject to a non-displacement attestation.

The executive order reaches further on three dimensions: it looks back a full year and forward to planned layoffs rather than a 90-day window; it appears to apply to all H-1B employers rather than the dependent and wilful-violator categories; and it introduces layoff scrutiny at four adjudication points rather than one attestation.

The order has its own limits. The text states that implementation must be consistent with existing law and depends on available appropriations. It does not amend the Immigration and Nationality Act or the H-1B regulations, and it sets no deadline for broader implementing rules beyond the 30-day DOL review. It does not prohibit employers with layoffs from sponsoring H-1B workers; it directs agencies to consider layoffs as a factor.

Among the legal arguments, the central question is one of authority. Congress deliberately confined non-displacement obligations to dependent employers and wilful violators in 1998, and applying a broader standard without a statute, rule making, or defined terms invites inconsistent adjudication and, in turn, litigation. Agencies have not yet said how they will implement the provisions or use economic data.

As of this writing, no lawsuit has been reported specifically challenging the layoff order, though the fee litigation continues and statutory-authority questions are the likely ground for any future challenge. The administration's position is that the order simply directs agencies to use information already within their reach, consistent with existing law.

Layoff Scenarios Employers May Face

Because the order leaves key terms undefined, the following are illustrative rather than settled.

An employer lays off US workers, then files H-1B petitions. If the laid-off positions resemble the sponsored roles in duties, qualifications, and location, agencies may treat the layoffs as weighing against the filing. "Similarly situated" is likely to be interpreted through the existing regulatory concept of "essentially equivalent" jobs, which compares those three factors. Layoffs in unrelated departments or locations may carry less weight, but that is not yet confirmed.

A consulting or staffing firm places H-1B workers at a client that recently conducted layoffs: Third-party placement models can expect the most scrutiny, because the displacement question arises at the client worksite rather than at the petitioning employer. The order's "directly or indirectly" language is generally read to reach these arrangements.

An employer lays off H-1B workers: Under current regulations, an H-1B worker whose employment ends has a grace period of up to 60 days to find a new sponsor, change status, or depart. Employers remain responsible for the reasonable cost of return transportation and for notifying USCIS of the termination. DHS has separately proposed eliminating that grace period, though that proposal is not final.

An employer plans a future reduction in force: The order reaches planned layoffs, meaning a pending restructuring could become relevant to an H-1B filing before it occurs. How agencies would learn of, or evaluate, planned layoffs is not addressed in the order.

Effects on Different Stakeholders

Employers: the immediate considerations are documentation and timing. Employers with recent or planned reductions may face requests for evidence, delays, or denials tied to wage levels, job duties, and staffing history. The 30-day DOL review means past filings, not only future ones, may be examined, and DOL's existing Project Firewall initiative allows investigations to open on internally identified concerns without an outside complaint.

Financially, the two fee tracks create planning uncertainty: the $100,000 proclamation fee is extended but enjoined, while the $103,265 rule could apply broadly if finalised. Operationally, some companies have already shifted hiring abroad, used L-1 or O-1 categories, or focused on moving existing employees toward permanent residence.

H-1B employees: Workers should understand that a petition can be delayed or denied for reasons unrelated to their own conduct, including their employer's or a client's workforce decisions.

Those with pending extensions after I-94 expiry remain in a period of authorised stay under the 240-day rule, but should carry documentation of their filings. Those laid off should know the 60-day grace period and the portability rules that allow work to begin for a new employer once a transfer petition is filed. International travel carries added risk while a case is pending, given that admission is one of the four review points.

US workers: The order's stated purpose is to protect US workers from displacement. Whether it produces more domestic hiring or accelerates offshoring is contested. The administration cites reduced outsourcing-firm registrations as evidence of effect; some economists and industry analysts report that affected roles are being relocated abroad rather than filled domestically.

Prospective immigrants and students: The $100,000 fee, if reinstated, primarily affects those abroad. The proposed $103,265 fee would affect cap-subject petitions regardless of location, including students transitioning from F-1 status. Combined with the enrolment declines already recorded, the changes shape the pipeline future workers as much as current ones.

The Broader Picture

Two things are true at once. The administration has produced measurable declines in the use of the H-1B program by the outsourcing sector, which it describes as the intended result. And the legal foundation for several of its measures remains unsettled: the primary fee is vacated, the replacement fee is a proposal, and the layoff order relies on agency discretion that may exceed what Congress authorised in 1998.

For companies that rely on foreign talent, the practical reality is heightened compliance risk and reduced predictability regardless of how the litigation resolves. For workers, the reality is that immigration outcomes now depend more heavily on employer decisions they do not control. Both groups will be watching the same three things: the appellate ruling on the $100,000 fee, the final version of the DHS fee rule after the 24 September comment deadline, and the agency guidance that will determine how the layoff order is actually applied.

This article is for general information only and does not constitute legal advice. Readers with specific questions should consult a licensed immigration attorney.

(Sai Srinivas Reddy Bhumireddy is an Attorney at Law, licensed in the State of Indiana, US, practicing in Immigration Law, Family Law, and Personal Injury. This is an opinion piece and the views expressed are the author's own. The Quint does not endorse or is responsible for them.)