New US rule raises recurring H-1B costs for visa-dependent employers

The United States has expanded the application of existing H-1B and L-1 visa fees to include extension petitions filed by certain employers, even when foreign professionals continue working for the same company.

Under a final rule issued by the Department of Homeland Security (DHS), covered employers will have to pay $4,000 for each qualifying H-1B petition and $4,500 for each qualifying L-1 petition. The rule will take effect on 9 September.

The move does not raise the value of the fees but significantly widens the range of petitions to which they apply. It could increase the recurring immigration costs of companies that depend heavily on foreign professionals.

The rule applies only to employers with at least 50 employees in the US where more than half of the domestic workforce collectively holds H-1B, L-1A or L-1B status.

These employers will now be required to pay the 9/11 Response and Biometric Entry-Exit Fee whenever they apply to extend a covered employee’s authorised stay.

Previously, the levy generally applied to petitions for initial employment or a change of employer. Extensions submitted by the same company for an existing employee usually did not attract the charge when the separate fraud prevention and detection fee was not applicable.

“The regulatory changes correct DHS's interpretation of statutory language to require that covered employers submit the 9-11 Biometric Fee for all extension of status petitions, regardless of whether the related fraud prevention and detection fee applies,” DHS said.

Amended petitions that do not seek to extend a worker’s authorised status will remain exempt.

The financial responsibility will rest entirely with employers. DHS rejected proposals to allow employees to pay the charge when their companies were unwilling to do so.

“The statutes and existing regulations specify that the fee is required to be paid by the employer,” the department said.

The change could indirectly affect Indian technology professionals and other skilled workers if employers reconsider the cost of repeatedly extending their visas. During the consultation process, concerns were raised that the additional expense could discourage companies from retaining H-1B workers and disadvantage employees already facing lengthy waits for employment-based green cards.

DHS dismissed those concerns, arguing that the levy applies to a limited category of companies and remains modest compared with salaries, relocation expenses and other costs involved in employing foreign professionals.

The department also said demand for H-1B visas had exceeded annual availability for more than a decade and predicted that the rule would not materially reduce the overall number of workers hired under the programme.

DHS estimates that the wider application of the charges will generate an additional $37.9 million for the US government in fiscal 2026 and $40 million in fiscal 2027.

The expansion is expected to substantially increase the share of petitions attracting the levy. Between fiscal 2018 and 2025, around 27 per cent of H-1B petitions submitted by covered employers were subject to the fee. That proportion would have been approximately 75 per cent had the revised interpretation applied during that period.

DHS acknowledged that its earlier interpretation of the legislation was incorrect. Congress had included extension applications when creating the fee in 2015, but the department had tied its collection to cases in which the fraud prevention fee was also payable.

“The best interpretation of that statute is that the 9-11 Biometric Fee applies to all extension of status petitions even when the Fraud Fee is not applicable,” DHS said.

The proceeds support the biometric entry-exit programme, which verifies the identities of foreign nationals arriving in and departing from the US. Half the collections, up to a statutory ceiling, are deposited in a dedicated biometric account, while the remainder goes into the Treasury’s general fund.

According to DHS, annual collections under the fee fell from $158 million in fiscal 2016 to $25.6 million in fiscal 2025. The department said the wider collection was necessary to support facial comparison technology and other biometric systems at US land borders, seaports and airports.

With IANS inputs