A coalition of 19 US state attorneys general has launched a legal challenge against the Trump Administration over a controversial new policy imposing a USD 1,00,000 fee on fresh H-1B visa petitions.

Led by Oregon Attorney General Dan Rayfield, the lawsuit contends that this measure is unlawful and detrimental to employers grappling with acute labour shortages in specialised fields.

The policy stems from a proclamation issued by President Donald Trump on 19 September 2025. It mandates the hefty fee for all new H-1B applications submitted after 21 September, including those for the 2026 visa lottery. Existing visa holders and petitions filed prior to this date face no changes.

The attorneys general argue that the US Department of Homeland Security (DHS) has overstepped its authority by introducing a fee not authorised by Congress. They claim it violates the Administrative Procedure Act (APA) through the absence of required rulemaking, such as notice-and-comment procedures.

Critics highlight that the fee dwarfs standard H-1B filing costs, which typically range from USD 960 to USD 7,595 (£750 to £5,950). Unlike lawful fees, this one bears no relation to actual processing expenses, rendering it arbitrary and excessive.

The coalition also objects to the policy's grant of broad discretion to the Homeland Security Secretary. This could lead to inconsistent enforcement, with selective exemptions for certain petitions.

Oregon Attorney General Rayfield emphasised the policy's crippling effect on public institutions. Universities, research labs, and healthcare providers depend on H-1B workers—such as physicians, nurses, researchers, and educators—to sustain operations.

In Oregon alone, Oregon State University sponsors over 150 H-1B staff, while the University of Oregon supports more than 50. The fee, Rayfield noted, would erect "an insurmountable financial barrier," halting innovation, education, and essential services.

Broader repercussions loom for the US economy. The H-1B programme enables employers to hire foreign experts in roles demanding at least a bachelor's degree, filling gaps in tech, academia, and healthcare amid domestic shortages.

Established by Congress, the H-1B visa allows temporary employment of highly skilled foreigners in "speciality occupations." Annual caps limit private-sector visas to 65,000, plus 20,000 for those with advanced degrees (master's or higher).

The programme underpins US competitiveness in innovation-driven industries. However, critics of the new fee warn it will exacerbate talent shortages, driving away global expertise and undermining institutions reliant on international hires.

The lawsuit spotlights the Trump Administration's failure to follow APA mandates. No public consultation occurred, nor was there analysis of impacts on nonprofits and government entities providing critical services.

"Fees must reflect agency costs, not whims," the Oregon Department of Justice stated in its press release. By sidestepping these steps, the policy invites judicial scrutiny and potential invalidation.

Attorney General Rayfield is supported by counterparts from 18 other states: Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maryland, Massachusetts, Michigan, Minnesota, North Carolina, New Jersey, New York, Rhode Island, Vermont, Washington, and Wisconsin. This broad alliance underscores nationwide concerns over the policy's fallout.

Should the lawsuit succeed, it could overturn the fee, preserving access to H-1B talent. A defeat might embolden further executive actions on immigration, reshaping US labour markets.

For employers, especially in education and research, the uncertainty disrupts hiring plans. Universities like those in Oregon face vacant posts, stalling labs and curricula.

The case also signals escalating tensions between federal immigration policies and state economic needs. As litigation unfolds, businesses and institutions monitor closely for resolutions.

Based On ANI Report