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Warner Norcross + Judd LLP is a corporate law firm with over 230 attorneys serving clients in nine offices throughout Michigan. Among the largest law firms in Michigan, Warner works in virtually all areas of business law.

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As employers prepare for the FY 2027 H-1B cap registration period, which runs from March 4 through March 19, 2026, litigation continues to unfold challenging the Sept. 19, 2025, presidential proclamation imposing a $100,000 payment tied to certain H-1B petitions. With registration opening imminently and cap petitions for selected beneficiaries due by late June, understanding who is actually subject to the payment — and how the pending court cases may affect filing obligations — is critical for workforce planning and budgeting decisions.

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Who Is Actually Subject to the $100,000 Payment?

It is important to emphasize that the $100,000 payment does not apply to most H-1B filings. The payment is tied to a subset of cap-subject H-1B hires — specifically, those beneficiaries who are outside the United States and will seek consular processing for an H-1B visa or those already in the U.S. who cannot obtain a change of status or extension of stay. The payment does not apply to:

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Change-of-employer petitions (H-1B transfers).

Visa issuance for beneficiaries with a previously approved H-1B petition.

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As a practical matter, many employers sponsor candidates who are already in the U.S. (for example, international students on F-1 status transitioning to H-1B) through a change of status process with USCIS. In the context of the H-1B cap, change of status is frequently used for individuals inside the United States, allowing them to transition to H-1B status without leaving the country and avoiding consular processing — and therefore the payment requirement entirely. Change of status is generally the preferred route for those already in the U.S. and remains unaffected by the $100,000 payment requirement.

H-1B Cap Lottery Statistics and Context

USCIS released data for last year’s cap season showing approximately 336,153 unique beneficiaries were registered in the H-1B electronic lottery, with about 118,660 selected — a selection rate of roughly 35%. These figures reflect unique individuals across all employers.

While USCIS does not publish a breakdown showing how many registrants are inside versus outside the U.S., historical practice and industry reporting indicate a substantial majority of cap registrants are already located in the U.S. (for example, students on F-1 status seeking change of status rather than consular processing abroad). For many employers, that dynamic means most cap candidates are not subject to the consular-processing payment requirement even if the $100,000 obligation remains in place.

Although much of the attention has focused on the H-1B cap lottery, the $100,000 payment is not limited to cap-subject petitions. Cap-exempt H-1B filings — including those filed by universities, research institutions, teaching hospitals, and nonprofit health care systems — are also subject to the payment requirement if the beneficiary is outside the U.S. and requires visa issuance to enter.

As a result, nonprofit employers may be disproportionately affected in certain sectors, particularly health care and higher education. Many hospitals and health care systems regularly sponsor foreign medical residents, fellows, physicians and specialized nurses who are completing training abroad or transitioning from international programs and must enter the United States through consular processing. Those cases would fall squarely within the category potentially subject to the $100,000 payment.

Unlike many private-sector technology and corporate employers — whose cap filings frequently involve F-1 students already in the United States seeking change of status — health care and academic institutions often recruit internationally for highly specialized roles where the candidate is not already present in the U.S. workforce. In those circumstances, the payment requirement could significantly alter hiring economics.

This distinction helps explain why several of the pending lawsuits include health care providers, medical training programs, and nonprofit institutions as plaintiffs. For these employers, the issue is not lottery uncertainty, but the direct financial barrier imposed on bringing essential medical and academic professionals into the country.

Chamber of Commerce v. DHS (D.C. Circuit – Fast-Tracked Appeal)

The lead case challenging the proclamation is Chamber of Commerce v. DHS, now pending before the U.S. Court of Appeals for the D.C. Circuit. After the federal district court upheld the proclamation, the Chamber of Commerce appealed, and the D.C. Circuit agreed to fast-track the case. Oral argument is scheduled for March 9.

The district court concluded that the President acted within his authority under Section 1182(f) of the Immigration and Nationality Act, which permits the President to impose “any” restrictions on the entry of foreign nationals deemed detrimental to U.S. interests. The court characterized the $100,000 requirement not as a user fee imposed by USCIS, but as a condition on entry. Because Congress’s existing H-1B fee framework governs agency-imposed filing fees, the district court reasoned that the proclamation did not conflict with those statutes but instead supplemented them. The court also rejected procedural challenges, finding the agencies were implementing a presidential directive and that any failure to conduct notice-and-comment rulemaking was harmless. The opinion further suggested judicial review of this type of presidential action may be limited.

On appeal, the Chamber’s central argument is structural and separation-of-powers based. Congress created a detailed H-1B statutory framework, including specific filing fees designed to cover adjudication costs.

According to the Chamber, the President cannot use a broad delegation under Section 1182(f) to effectively rewrite that framework by imposing a $100,000 payment on domestic petitioners. The Chamber argues this is not a traditional entry restriction, but rather a massive financial obligation that transforms the H-1B program into a pay-to-play system. It also raises concerns about the absence of limiting principles: if $100,000 is permitted, what prevents significantly higher amounts?

The government’s response focuses on the breadth of the statutory text. Section 1182(f) authorizes the President to impose “any” restrictions he deems necessary. Framed as a condition on entry rather than a user fee, the government argues the payment fits comfortably within Supreme Court precedent granting the Executive broad authority over immigration matters. The government also contends that any financial harm could be remedied later through refunds if the policy were ultimately invalidated.

The D.C. Circuit is likely to focus on two central questions. First, whether the payment is properly characterized as an entry restriction or as a domestic fee that conflicts with Congress’s detailed statutory scheme. Second, whether there are meaningful limits to the President’s authority when Congress has already legislated extensively in the area.

Although there is no deadline for a decision after oral argument, the expedited briefing schedule suggests the court understands the time sensitivity created by the H-1B filing window. Unless the D.C. Circuit blocks the proclamation before late June — when most FY 2027 cap petitions must be filed — the $100,000 requirement will apply to covered cases.

Global Nurse Force v. Trump (California Federal Court)

A separate coalition of labor unions, health care providers, schools, religious organizations and individual workers filed suit in California federal court in Oct. 2025. The plaintiffs include medical residents, fellows, interns and nurses serving rural and medically underserved communities, educational institutions relying on H-1B educators, religious organizations employing pastors and religious professionals and unions representing academic professionals.

In Dec., the coalition moved for a preliminary injunction seeking to pause enforcement of the $100,000 payment. The court is scheduled to hear argument on Feb. 26. The government has asked the California court to pause its case pending the D.C. Circuit’s decision in Chamber of Commerce v. DHS, and that request will also be addressed at the Feb. 26 hearing.

If the California court grants a preliminary injunction, enforcement of the payment could be paused nationwide, at least temporarily. However, the court could instead defer to the D.C. Circuit’s fast-tracked appeal.

Multistate Attorneys General Lawsuit (Massachusetts Federal Court)

In Dec. 2025, attorneys general from 20 states filed suit in Massachusetts federal court challenging the proclamation as unconstitutional and beyond executive authority. In early Feb., the states moved for summary judgment, asking the court to invalidate the $100,000 requirement without a trial.

The government’s response is due March 9 — the same day the D.C. Circuit hears oral argument in the Chamber case. Briefing will conclude in mid-April, and oral argument will be scheduled thereafter. While this case is advancing, it is unlikely to produce immediate relief before the H-1B filing deadline.

What Employers Should Do Now

Employers should continue to register eligible candidates for the H-1B lottery without paying the $100,000 payment at the registration stage. Because the payment only applies to a narrow segment of beneficiaries — those requiring consular processing or unable to obtain change of status — workforce planning should prioritize identifying those scenarios early.

Given the timing of litigation milestones, plan as though the payment requirement could apply to affected cases if the courts do not block it prior to the end of June (when most selected petitions must be filed).

From an operational perspective, employers should evaluate:

Whether key hires are likely to qualify for change of status rather than consular processing (thus avoiding the payment),

Whether alternative visa pathways (such as cap-exempt hiring for nonprofit/research employers or other temporary work visas) make sense for certain roles, and

How budgeting and internal approvals should reflect the uncertainty of the litigation timeline.

The $100,000 payment requirement remains uncertain pending decisions across multiple courts. Most H-1B cap-subject beneficiaries are likely to be inside the U.S. and pursuing change of status — scenarios not subject to the payment. Employers should assess their potential exposure, plan conservatively and monitor the Feb. 26 and March 9 court events closely, as they will provide critical cues on how the litigation may unfold. Our immigration team is tracking all three cases and is available to support strategic planning and case-specific analysis.

Talent Without Borders

Partner

Sarah R. Bileti

Associate

Ashley Yuill

Immigration

UPDATE: Status of Litigation Challenging the $100,000 H-1B Cap Entry Payment

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