Overview

In order to allow U.S. firms to temporarily employ foreign workers in “specialty occupations” — positions that call for the theoretical and practical application of a particular body of knowledge — the H-1B nonimmigrant visa classification was created. In highly skilled fields, the main justification is to fill labor shortages domestically by enabling firms to hire foreign talent in situations where competent American workers are not available.

Although the H-1B program has evolved throughout time, 2025 marks particularly significant turning point. On September 19, 2025, President Donald J. Trump issued Presidential Proclamation (PP) Restriction on Entry of Certain Nonimmigrant Workers, imposing a one-time supplemental payment of $100,000 for “new” H-1B petitions and placing entry restrictions on foreign nationals’ ability to enter the United States under specific conditions. This change represents a significant policy change in the way that H-1B cases will be processed and funded.

Introduction to H-1B

Having access to top talent is essential to keeping a competitive edge in the global economy. When comparable skills are difficult to find in the domestic labor market, U.S. employers can hire qualified foreign experts through the H-1B visa program, which was established to address shortages of highly skilled professionals in key industries. This is often due to the demand for specialized knowledge outpacing the number of U.S. workers trained in those fields.

Historically, the H-1B program has grown to be a pillar of American economic and immigration policy. It strikes an important balance between helping U.S. businesses stay competitive and ensuring that American workers are treated fairly and paid equitably. However, the program has continued to be the focus of several reform efforts aimed at preventing system abuse, promoting equitable compensation, and giving preference to the most qualified candidates.

Annual “Cap” for H-1B Visas

Each fiscal year, the U.S. government limits the number of new H-1B visas that can be issued under the statutory “cap.” Currently, that cap is set at 85,000 visas per fiscal year — 65,000 under the regular category and an additional 20,000 reserved for individuals who hold an advanced degree (U.S. master’s degree or higher) from an accredited institution.

Cap-Exempt Petitions

Importantly, certain employers and positions are considered “cap-exempt,” meaning they can file H-1B petitions at any time of the year without being limited by the 85,000-visa cap. These include:

• Colleges and universities, as well as nonprofit organizations directly affiliated with them;
• Nonprofit research institutions; and
• Governmental research organizations.

For advanced degree holders, there is also a small but meaningful advantage within the regular cap. USCIS runs the lottery in two stages — first for the 65,000 regular slots, and then a second round for an additional 20,000 visas reserved for applicants with a U.S. master’s degree or higher. This gives those candidates an extra chance to be selected each year.

Electronic Registration Process

Since 2020, USCIS has required employers who want to sponsor H-1B workers to begin the process with an electronic (online) registration before submitting a full petition. This electronic system replaced the old paper-based lottery, streamlining the process and cutting down on the flood of unnecessary filings that used to overwhelm the agency each spring.

Each year, during a designated registration window — typically in March — employers must register each prospective H-1B worker online and pay a small registration fee. The registration includes:

• The beneficiary’s identifying information, such as name, date of birth, passport number, and country of citizenship;
• The employer’s business details and attestations confirming the legitimacy of the job offer; and
• A certification that no duplicate registration for the same worker has been submitted by the employer or any related entity.

To choose enough applicants at random to reach the annual cap, USCIS holds an electronic lottery after registration closes. USCIS notifies employers whose registrations are selected, allowing them to proceed with filing a complete Form I-129 petition for the selected employee. These petitions, along with certified Labor Condition Applications (LCAs), supporting documentation, and any necessary filing fees, must then be submitted within the designated time frame.

Major 2025 Update: The $100,000 Proclamation and Entry Restrictions

Text, Effective Date, and Scope of the Proclamation

The Proclamation states, in essence, that:

“. . .[e]ntry into the United States of aliens as nonimmigrants to perform services in a specialty occupation. . .is restricted, except for those aliens whose petitions are accompanied or supplemented by a payment of $100,000 — subject to the exceptions.”

This means that employers sponsoring new H-1B workers, particularly those who are currently outside the United States, must now pay an additional $100,000 as a condition of eligibility. Without that payment, the worker may be denied both visa issuance and entry.

The rule took effect on September 21, 2025, and is designed to last for 12 months 2026, unless the Administration decides to extend it after reviewing its impact.

Importantly, under the Proclamation:

• The Department of Homeland Security (DHS) must withhold decisions on new H-1B petitions for workers outside the U.S. unless the required payment is included.
• The Department of State (DOS) must also refuse to issue H-1B visas until that payment is verified.
• Employers are required to keep records proving the payment was made, as both DHS and DOS may deny approval or entry if the payment cannot be confirmed.

The rule is not retroactive, as subsequent agency guidance from USCIS and Customs and Border Protection (CBP) made clear. That is to say, it does not impact current H-1B visa holders or extensions of existing status under current interpretations, nor does it apply to petitions that were previously filed or approved prior to September 21, 2025.

In sum, the Proclamation adds a major new cost and entry condition for new H-1B petitions involving beneficiaries outside the United States, but it does not affect those already working in H-1B status or those filing for extensions or renewals. It effectively acts as a gatekeeping fee for new entrants, while keeping the existing system intact for those already in it.

National Interest Exceptions

The Proclamation provides for very limited “national interest” exceptions to the $100,000 payment. These may be granted by the Secretary of Homeland Security only in certain cases where the government determines that hiring a specific foreign worker would clearly serve the national interest of the United States.

The national interest exception could apply if:

• The worker’s skills and expertise are critical to the U.S. economy, innovation, or national security;
• No other qualified U.S. worker is available to fill the position; and
• Requiring the $100,000 payment would significantly harm U.S. interests.

Employers who believe their case meets this high threshold will need to provide extensive documentation and justification to DHS, which demonstrates both the unavailability of U.S. workers and the tangible benefits of hiring the foreign professional. These waivers are expected to be extraordinarily rare, reserved for situations where the foreign worker’s contribution to U.S. interests is clear, immediate, and substantial.

Who Is Impacted and Who Must Pay

The $100,000 supplemental payment does not apply uniformly to every H-1B petition. Its impact depends largely on when the petition is filed and whether the worker is inside or outside the United States at the time of filing.

Based on the current reading and subsequent agency guidance, the Proclamation is aimed at new H-1B petitions filed on or after 12:01 a.m. (EDT) on September 21, 2025, that fall into one of the following categories:

• Beneficiaries outside the U.S. who do not hold a valid H-1B visa at the time of filing;
• Petitions requesting consular processing or port-of-entry notification, including pre-flight inspection cases for beneficiaries seeking admission to the U.S.; and
• Petitions requesting a change of status, amendment, or extension where USCIS determines the beneficiary is not eligible for that change or extension—for example, if the individual is not in valid nonimmigrant status, or if they depart the United States before USCIS completes adjudication of a change-of-status request.

In other words, any petition filed after September 21, 2025, that ultimately requires consular visa processing — whether initially or because the status request was denied — will be subject to the $100,000 supplemental payment requirement.

Who Remains Unaffected by the Proclamation

Petitions Filed Before September 21, 2025

Any H-1B petition filed before 12:01 a.m. (EDT) on September 21, 2025, is completely exempt from the Proclamation. The rule is not retroactive, meaning it does not alter the status, validity, or processing of cases already submitted or approved before that time.

Likewise, previously issued and currently valid H-1B visas remain valid. Holders of these visas can continue to work, travel, and reenter the United States without any new payment or restriction. Employers with pending pre-September 21 filings do not need to take any additional action.

Petitions Filed On or After September 21, 2025

Even for petitions filed on or after the effective date, the $100,000 payment does not apply if both of the following conditions are met:

• The petition requests a change of status, amendment, or extension of stay for a worker who is already lawfully present in the United States; and
• USCIS approves that requested change, amendment, or extension.

In these cases, the worker remains in valid H-1B status inside the United States and is not later subject to the $100,000 payment, even if they travel abroad and apply for a visa based on the approved petition, or reenter the United States using an existing, valid H-1B visa.

This clarification confirms that once a petition has been approved from within the United States, the surcharge does not retroactively attach if the worker later leaves and returns. The fee applies only to petitions that ultimately require consular processing or initial entry from outside the United States.

Extensions, Recaptures, and the Six-Year Limit

H-1B status is granted for a maximum of six years (extended beyond the six-year limit under certain circumstances), typically in three-year increments. The allowed duration may be increased by recaptured time spent outside the United States.

There have been no extra entrance requirements or visa issuance requirements for extensions from H-1B to H-1B (same employer) or filed while in the United States. The current interpretation states that submissions for extensions or renewals are exempt from the $100,000 surcharge.

However, if an extension is filed for a beneficiary who is not in the United States and requests entrance, there is a possibility that USCIS will consider it a new petition that is subject to the payment. Because the Proclamation’s entry limitation applies to individuals who are not in the United States, a beneficiary who is already abroad and requests to re-enter on an extension filed after September 21, 2025, may be subject to additional scrutiny or denial in the absence of a waiver or exception.

From a strategic perspective, petitioners and their beneficiaries should:

• Recapture time proactively;
• Whenever feasible, avoid having beneficiaries abroad during transitions or renewals; and
• Maintain detailed records of travel, status, and recapture computations.

Overall, even if the Proclamation appears to have no bearing on onshore transfers and extensions in its current understanding, there is always a chance of reinterpretation and adjudicative divergence, particularly in late adjudications or consular encounters.

Visa Issuance, Entry and Travel Considerations

Consular Processing / Visa Stamping Abroad

For beneficiaries located outside the United States, an approved H-1B petition must still go through consular processing before the individual can enter and begin employment. This step involves scheduling an interview and obtaining a visa stamp at a U.S. embassy or consulate.

Under the Proclamation, consular officers are now required to verify proof of the $100,000 payment before issuing the visa. If the employer cannot provide credible evidence that the payment was made — or that a valid exemption applies — the visa application may be refused or delayed. The Proclamation explicitly directs the DOS to perform this verification as part of the adjudication process.

Consular officers also retain discretion to assess whether a case qualifies for an exemption (i.e., work that is in the “national interest”) or whether payment documentation appears deficient. Because interpretations may differ between consular posts, outcomes and processing times could vary.

Entry and Re-Entry Under the New Rule

For H-1B employees whose petitions do not include the required $100,000 payment, the Proclamation grants DHS and CBP the power to deny entry. Notably, existing H-1B visa holders who travel and then return to the United States are not subject to any new restrictions. With their current visas and authorized petitions, they are free to enter and work.

When an H-1B worker’s visa stamp expires and needs to be renewed overseas, the main risk occurs. In that case, even if the underlying petition has already been granted, the U.S. consulate might ask for evidence of the $100,000 payment before granting a new visa. Recipients should be encouraged to extend or renew their status from within the United States whenever feasible in order to reduce this risk.

Additionally, H-1B workers who depart the U.S. while a change-of-employer or extension petition is pending could face difficulties reentering if DHS determines that the new petition constitutes a “new” filing under the surcharge regime.

In short, the surcharge affects only those seeking initial admission or visa issuance after the effective date. H-1B workers already in valid status within the United States remain protected from the new payment requirement when traveling internationally.

Application Process: Step by Step

typical workflow for a cap-subject H-1B case, bearing in mind that the Proclamation may impose additional burdens at or before various stages.

1.      Electronic Registration Phase

During the registration period, employers submit basic information for each potential H-1B candidate through USCIS’s online portal. This is essentially the lottery entry stage. If the registration is selected, USCIS notifies the employer with a Notice of Selection, giving them the green light to move forward with a full petition for that worker.

2.      Petition Preparation and Filing

Once selected, the employer prepares the full Form I-129 petition and H-1B supplement, along with all required filing fees and supporting documents. This includes the certified LCA, a detailed job description, the beneficiary’s academic and professional credentials, and evidence that the role qualifies as a specialty occupation.

For the 2025–2026 cycle, if the beneficiary is outside the United States, the petition must also include proof of the $100,000 payment (or confirmation of an approved exemption). Employers should keep thorough records of the payment and all supporting documentation for compliance and audit purposes.

If the position might qualify for a national interest exception, it’s wise to include a well-supported request at this stage, explaining why the case meets the criteria.

3.      USCIS Adjudication

After filing, USCIS reviews the petition to ensure it meets all legal and eligibility requirements — confirming that the position qualifies as a specialty occupation, that the employer is legitimate, and that the wage and employment terms are compliant.

If USCIS finds any gaps or inconsistencies, it may issue a Request for Evidence (RFE) asking for clarification or additional documentation, such as details about the worksite, the employer-employee relationship, or the connection between the degree and job duties.

4.      Decision / Appeal or Denial

Once the review is complete, USCIS will issue a decision — either approval, denial, or sometimes a Notice of Intent to Deny (NOID) if major issues remain.

If the petition is denied, the employer or beneficiary may file a motion to reopen or reconsider, or, in certain cases, appeal the decision to the Administrative Appeals Office (AAO). Having strong documentation and a well-structured petition from the start can greatly improve the odds of a successful outcome.

5.      Consular Processing and Entry (If Abroad)

If the H-1B petition is approved and the worker is outside the United States, the next step is consular processing. The beneficiary must schedule an appointment at a U.S. embassy or consulate, attend a visa interview, and receive an H-1B visa stamp in their passport before traveling.

Under the 2025 Proclamation, consular officers are required to verify proof of the $100,000 payment. If the employer cannot provide clear evidence that the payment was made — or that the case qualifies for a national interest exemption — the visa may be delayed or denied.

Once the visa is issued, the beneficiary can travel to the United States and request admission in H-1B status at a port of entry.

6.      Beginning Employment

After approval and lawful entry, the H-1B worker can begin employment on the petition’s start date, which for most cap-subject cases is October 1 of the relevant fiscal year. Employers should confirm that the employee’s arrival, start date, and documentation align with the approved petition and LCA.

7.      Amendments, Extensions, Transfers, and Recaptures

After the initial approval, certain changes may require new or amended filings. For example, switching employers, extending the H-1B period, or changing worksite locations.

Employers should maintain thorough documentation of every change, ensure wage and worksite compliance, and keep records ready for inspection or audit.

8.      Premium Processing (Optional Fast Track)

Employers who need faster results can request premium processing, which guarantees USCIS review within 15 calendar days for an additional fee.

FAQ and Common Edge Cases

Q: Does the $100,000 surcharge apply to renewals or extensions of existing H-1B status?

A: No. Current USCIS guidance confirms that the surcharge applies only to new petitions filed on or after September 21, 2025. Extensions, amendments, and renewals for workers who already hold valid H-1B status are not affected.

Q: Is my petition exempt if filed before September 21, 2025?

A: Yes. The Proclamation is not retroactive. Any petition submitted before 12:01 a.m. (EDT) on that date is fully exempt from the $100,000 payment requirement.

Q: If I am currently in H-1B status but abroad at the time the rule takes effect, do I face reentry issues?

A: No. Holders of a valid H-1B visa are not subject to new travel or entry restrictions. However, if your visa stamp has expired and you must renew it at a consulate, you could be asked to show proof of the $100,000 payment before a new visa is issued. Travelers should plan cautiously.

Q: Are cap-exempt H-1B petitions exempt from the surcharge?

A: No. The Proclamation does not specifically exclude cap-exempt petitions. Until DHS issues clarifying guidance, employers in these categories should assume that new petitions requiring consular processing may still be subject to the fee.

Q: If USCIS denies my petition due to non-payment, can I later argue exemption or refund?

A: Yes. However, courts may be reluctant to issue refunds. In most cases, it is more effective to appeal or refile the petition, especially if the rule is later blocked or modified through litigation.

Q: Can an employer group pay $100,000 once for multiple beneficiaries?

A: No. The payment must accompany each individual petition. Group payments are not permitted unless DHS creates a new mechanism allowing it.

Q: If I’m on H-4 dependent status and seeking change to H-1B, does the surcharge apply?

A: Yes. A change-of-status petition from H-4 to H-1B filed after September 21, 2025, is considered a new H-1B filing, and therefore subject to the surcharge — unless it qualifies for a national interest exception.

Conclusion

The H-1B program has long been a pillar of the American economy, linking  American companies with highly qualified workers in fields like technology, science, medicine, finance, education, and other vital fields. It has served as a catalyst for innovation as well as a means of addressing specialized labor shortages that the domestic labor market is unable to supply.

The 2025 Presidential Proclamation represents one of the most consequential changes to the program in recent years. Beyond the immediate financial implications, it highlights the federal government’s changing stance on employment-based immigration. This entails paying more attention to long-term planning, documentation, and compliance for both companies and foreign professionals.

Navigating these complexities is challenging, especially as the rules continue to evolve through agency interpretation. Expert legal advice is essential to prevent mistakes and delays, whether you are an employer preparing your upcoming fiscal-year files or a professional looking to preserve your legal status and career security. For personalized guidance and assistance, please feel free to reach out to our team at Meng Law Group. You may also contact us via phone at (626) 339-9363 or email us directly at info@menglawgrp.com

_______________

Legal Disclaimer

This article is for informational purposes only and does not constitute legal advice. Reading any content on our website does not create an attorney-client relationship. For legal guidance tailored to your specific situation, consult a qualified immigration attorney.