Judge blocks Trump’s $100k fee on H-1B visas

(CN) — A $100,000 fee on H-1B visas imposed by the Trump administration is unlawful and cannot be enforced, a federal judge ruled Monday.

In a 42-page ruling, U.S. District Judge Leo Sorokin sided with a group of Democratic states that sued to stop the fee, claiming the administration overstepped Congress to enact it from the executive branch.

The Trump administration countered in court papers that the fee was a “regulatory payment,” which is “not the same as a tax.” Sorokin disagreed.

“Here, the substance and application of the $100,000 payment revealed that it is a tax, regardless of what the payment is called,” the Barack Obama appointee wrote.

Established by Congress through the Immigration Act of 1990, the H-1B visa program allows employers to hire highly skilled foreign workers, often with advanced degrees, to fill specialized roles in fields with labor shortages like medicine, research and education.

But in September, President Donald Trump announced via proclamation that the Department of Homeland Security was to require employers to pay a $100,000 fee for new H-1B visa applications to disincentivize the hiring of foreign workers — one of the president’s numerous policies designed to curb all forms of immigration.

A coalition of 20 Democratic states sued in response, arguing the new restriction would kneecap their ability to fill key positions. Court documents show that the fee has reduced the number of H-1B visas sought.

“California needs more teachers, more nurses, more doctors. There is a shortage,” California Attorney General Rob Bonta said when announcing the lawsuit in December. “These workers fill essential roles that keep the community running.”

Sorokin wrote in his Monday ruling that the states sufficiently demonstrated that the fee was arbitrary and capricious and “negatively impacts their ability to staff publicly run colleges and universities, primary and secondary schools and healthcare systems.”

“They contend that these hiring challenges will, in turn, exacerbate staffing shortages in these sectors and endanger plaintiffs’ ability to provide important medical and educational services,” the judge added.

On the other hand, Sorokin found that the government failed to prove that Trump had the power to impose this fee at all. DHS claimed it was merely following the president’s September proclamation, but that doesn’t give the agency “free rein to ignore the requirements” of the Administrative Procedure Act,” the judge ruled.

“None of these cursory policy rationales offer a reasoned explanation for enacting a heavy tax on the H-1B program,” Sorokin wrote.

In a statement to Courthouse News, a spokesperson for DHS called the ruling “blatant judicial activism.”

“The recent changes to the H-1B visa program, including the increased fee, are intended to address concerns about program integrity and the impact on the U.S. workforce,” the spokesperson said. “The policy aims to ensure that employers prioritize hiring U.S. workers, particularly in high-skilled fields. The Trump administration remains committed to safeguarding opportunities for American workers and maintaining the integrity of employment-based visa programs.”

It’s the latest legal blow to Trump’s economic agenda. In fact, guiding Sorokin’s Monday ruling was another one of the administration’s defeats: a Supreme Court decision deeming Trump’s effort to impose global tariffs unlawful since it lacked approval from Congress.

Sorokin also looked to a 2012 ruling from the high court that deemed Obamacare’s mandate for people to obtain health insurance a “tax” in the same way the H-1B visa is.

The government had argued that the fee was a punishment enforced by DHS to curb immigration, while a tax is collected by the Internal Revenue Service to raise revenue. Again, Sorokin was unconvinced.

“The government may impose a tax with the purpose of curbing the purchase of undesirable goods (e.g., a tobacco tax),” the judge noted. “Such a tax does not lose its identity as a tax.”

It’s becoming a familiar problem for Trump, who continues to test the limits of the executive branch with his aggressive immigration and economic agendas — often to get blocked by a federal court.

Just last week, a federal judge in Rhode Island lambasted the administration’s freeze on work permits, green cards, citizenship applications and other immigration benefits for immigrants from 39 countries affected by the government’s travel bans.

That initiative, too, was arbitrary and capricious, the judge ruled, as the government failed to consider the hundreds of thousands of people “stuck in limbo” because of the policy change.

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