As a leading expert in diversity, equity, and inclusion, Sofia Khaira specializes in helping organizations navigate the complex intersection of talent management and public policy. With a new presidential proclamation imposing a staggering $100,000 fee on H-1B visas facing a trio of federal lawsuits, we sat down with her to understand the legal battles and the real-world stakes. In our conversation, we explore the core legal arguments against the administration’s new H-1B visa fee, delve into the real-world consequences for public institutions like schools and hospitals, unpack the government’s rationale for the change, and discuss how these multiple, parallel lawsuits might ultimately shape the future of skilled immigration in the United States.
The lawsuit by 20 state AGs argues the $100,000 H-1B fee is “arbitrary and capricious.” Can you walk us through the step-by-step legal basis for that claim and explain what specific metrics they might use to prove the fee is disconnected from actual agency costs?
Absolutely. The “arbitrary and capricious” standard comes from the Administrative Procedure Act, and it’s essentially a check on executive power. It means the government can’t just make a decision on a whim; there has to be a rational connection between the facts and the choice made. In this case, the states argue that the Department of Homeland Security’s authority to set visa fees is strictly limited to recouping the costs of processing the applications. To prove the $100,000 figure is arbitrary, the attorneys general will likely use the discovery process to demand the administration’s cost-benefit analysis. They will show that the actual administrative cost to U.S. Citizenship and Immigration Services for processing an H-1B petition is a tiny fraction of that amount. The plaintiffs will argue this fee “bears no connection to any costs,” and is therefore not a fee at all, but an illegal tax meant to raise revenue, a power the Constitution reserves solely for Congress.
The complaint highlights severe impacts on public schools in Chicago and Baltimore. Beyond staffing, what are some less obvious, downstream effects this $100,000 fee could have on university-level research and healthcare systems? Please share a few detailed examples or potential data points.
The immediate crisis in public schools is just the tip of the iceberg. Think about a university research lab on the cusp of a breakthrough in Alzheimer’s research. They often rely on H-1B visas to bring in post-doctoral fellows with incredibly niche expertise. A $100,000 fee doesn’t just make that difficult; it makes it impossible for a grant-funded institution. The downstream effect isn’t just one less researcher; it’s a potential delay in life-saving discoveries and a loss of our country’s competitive edge in science and technology. Similarly, in healthcare, this isn’t just about staffing a large urban hospital. It’s about the rural clinics and community health centers that depend on H-1B physicians to remain open. When a school district like Baltimore City’s faces a “grave risk” to classroom staffing, you can imagine the devastating impact on a small town’s only medical clinic when they can no longer afford to bring in a much-needed specialist.
President Trump justified the proclamation by citing “systemic abuse” of the H-1B program. What specific types of abuse does the administration typically refer to, and in your experience, how effectively does a flat $100,000 fee address those issues compared to other potential reforms?
The “systemic abuse” argument generally targets large IT consulting and outsourcing firms that are accused of flooding the H-1B lottery system to secure a high volume of visas. The allegation is that these firms then contract out the workers, sometimes at lower wages, to the disadvantage of American citizens. The problem is that a flat $100,000 fee is an incredibly blunt instrument that fails to address this specific issue. In fact, it does the opposite. A massive multinational corporation might be able to absorb that cost, but the Chicago Public Schools needing a bilingual educator cannot. This fee doesn’t distinguish between a bad actor and a public institution serving a critical need. It punishes the very organizations that use the program exactly as intended—to fill highly specialized, hard-to-fill roles. A much more effective reform would be targeted enforcement, wage level adjustments, or changes to the lottery system itself, not a prohibitive barrier that hurts everyone.
With parallel lawsuits from the U.S. Chamber of Commerce and other groups, how do these multiple legal challenges typically interact? Could you detail the process by which a ruling in the D.C. case, for example, might influence the outcome of the California v. Noem lawsuit?
Having multiple lawsuits on parallel tracks creates a fascinating dynamic. You have the states’ case in Massachusetts, the U.S. Chamber of Commerce’s challenge in Washington, D.C., and another from unions and industry groups in California. While they are separate cases, they are deeply interconnected. If the D.C. court, hearing the Chamber of Commerce’s case, were to issue a nationwide preliminary injunction, it would halt the fee’s implementation everywhere. This would immediately influence the Massachusetts case because the urgent need for a similar injunction there would be reduced. The legal reasoning in one court’s ruling becomes powerful persuasive authority for the other judges. The plaintiffs’ lawyers will be sharing strategies and evidence, and a victory in one court emboldens the arguments in another. Ultimately, if different federal courts issue conflicting rulings, it significantly increases the likelihood that the Supreme Court will have to step in to provide a final, nationwide resolution.
What is your forecast for the H-1B program’s future if this $100,000 fee for new visas, which the administration clarified in October, is ultimately upheld by the courts?
If this fee is upheld, it will fundamentally shatter the H-1B program as we know it. For public sector and non-profit employers, it would be an extinction-level event. The program would “effectively be eliminated” for entities like the Chicago Public Schools. Universities, smaller tech startups, and non-profit healthcare systems would be completely priced out of accessing global talent. The program would transform from a tool for fostering innovation and filling critical skills gaps across our economy into a luxury good accessible only to the wealthiest corporations. We would see a devastating brain drain, as the world’s brightest minds, including those we educate in our own universities, choose to take their talents to countries with more welcoming policies. In the long run, this wouldn’t protect American jobs; it would stifle the innovation that creates them, diminishing our economic and national security far more than the “abuses” the proclamation claims to target.
