The First Circuit refused yesterday to reinstate a $100,000-per-petition H-1B fee, keeping hiring costs down for tech startups while a direct conflict between two federal courts sets up a possible Supreme Court showdown.
On July 24, 2026, the Boston-based First U.S. Circuit Court of Appeals rejected the Trump administration's bid to pause a lower court order that had wiped out its $100,000 H-1B visa fee. The three-judge panel found the government unlikely to succeed on appeal and declined to reinstate the charge while the case proceeds. For the U.S. tech industry, it's the second consecutive court win on a policy that would have made each new foreign engineering hire cost roughly 25 times more than it did a year ago.
The backstory runs to September 2025, when President Trump issued Proclamation 10973 imposing the fee on new H-1B petitions for beneficiaries located outside the United States. The standard filing fee at the time was roughly $4,000 all in. Twenty Democratic state attorneys general, led by California, sued in Massachusetts. On June 8, 2026, U.S. District Judge Leo Sorokin vacated the policy entirely. His reasoning was pointed: the $100,000 payment is a tax, and the Constitution gives Congress, not the president, the power to levy taxes. The executive branch had exceeded its authority and violated the Administrative Procedure Act. The administration appealed immediately and asked the First Circuit to pause the ruling while it fought back.
That request died on Friday. The panel said the government had not demonstrated a likelihood of success on the merits. The fee stays blocked.
The legal problem is that a federal court in Washington reached the opposite conclusion. In December 2025, the U.S. District Court for the District of Columbia upheld the proclamation, finding the fee a legitimate exercise of presidential immigration powers rather than an unlawful tax. The U.S. Chamber of Commerce appealed that ruling to the D.C. Circuit, which heard oral arguments in March 2026. That appeal is still pending. You now have two district courts reading the same proclamation and landing in different places, with the First Circuit having weighed in against the fee. When two federal circuits disagree on the same federal question, the Supreme Court typically steps in to resolve it. Bloomberg Law reported on the First Circuit's decision Friday, framing it as exactly that kind of conflict in the making.
For startups, the circuit split is live uncertainty dressed up as temporary relief. The fee is off the table today. It may not be tomorrow.
What $100,000 per hire actually means
The practical stakes are not abstract. H-1B is the primary legal path for U.S. employers to hire engineers and specialized technical workers from abroad. At the standard fee structure, a startup sponsoring a software engineer pays somewhere in the range of $4,000 to $6,000 in government and legal fees for the petition. Under the proclamation, that number jumped to over $100,000 before salary, relocation, or any other cost. As Northeastern University noted in September 2025, startups bear this disproportionately: a Series A company running a 40-person team cannot absorb a six-figure surcharge per engineer the way Microsoft or Google can. TechCrunch quoted founders at the time calling it a "talent tariff."
The chilling effect was real. Multiple employers paused new H-1B sponsorships entirely after the fee took effect in late 2025. Some shifted toward building offshore teams rather than bringing workers stateside. The court rulings have created exactly the kind of legal whiplash Bloomberg Law described in a piece this week: employers have had the fee turned on, turned off by a stay, turned back on again during procedural rounds, and now turned off once more by the First Circuit. Planning a hiring pipeline in that environment is close to impossible.
Frankly, that instability is at least as damaging as the fee itself. A company that paused H-1B sponsorships through six months of litigation has already lost candidates to competitors or to other countries. The visa has a fixed annual cap of 65,000 regular slots plus 20,000 for U.S. master's degree holders. Employers who sat out the April 2026 lottery cannot simply re-enter mid-year. The cost is not just financial.
With the stay denied, USCIS cannot collect the $100,000 fee on new petitions while the First Circuit case continues. But the D.C. Circuit could rule the other way in its Chamber of Commerce case, deepening the split and accelerating a Supreme Court petition. The administration has consistently argued the proclamation falls within broad presidential authority over immigration under 8 U.S.C. § 1182(f), the same provision used to justify various travel restrictions in the first Trump term. The Massachusetts court rejected that framing entirely, calling the payment a revenue-raising measure with no meaningful connection to immigration restriction. Those two readings are not reconcilable, and the justices will almost certainly have to pick one.
Until they do, the H-1B fee is off. Startups that paused hiring can restart. But anyone treating this as a permanent win is reading the wrong docket.
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