As of September 2026, the $100K H-1B fee is an on-again, off-again saga, not a settled price. The original $100,000 payment took effect, then courts blocked it, and now the administration is pushing a new six-figure fee through rulemaking while the first one hangs in appeal. If your team relies on H-1B talent, the question in front of you isn't just "which visa now?" It's a bigger one: does this job need to sit in the U.S. at all? For a growing number of companies, the smartest answer is to stop betting on relocation and start employing people where they already live.
Let's walk through where things actually stand, when U.S. sponsorship still makes sense, and the option most of the immigration-law coverage skips entirely.
Key Takeaways
- The original $100,000 fee is currently blocked by the courts and not being collected, but the administration is trying to reinstate a six-figure fee through rulemaking, so the uncertainty is far from over.
- For most companies, betting on U.S. sponsorship only pencils out for a handful of truly exceptional roles.
- The bigger shift isn't which visa to use, it's whether the job needs to be in the U.S. at all.
- An Employer of Record lets you hire the same person compliantly in the country where they already live, usually in days, with no entity and no six-figure petition.
- The winners will treat "where we employ people" as a strategic choice, not a default.
Where the $100K H-1B fee actually stands
Here's the short version: a one-time $100,000 payment on each new cap-subject H-1B petition took effect on September 21, 2025, but as of September 2026 the courts have blocked it and it isn't being collected. According to the American Immigration Council, President Trump signed Presidential Proclamation 10973 on September 19, 2025, adding that six-figure charge to new petitions. It was always a payment per new cap-subject petition, not an annual tax on your existing workforce.
The block is why you're not paying it right now. The Cato Institute reports that the courts have stayed the proclamation as an unconstitutional tax, with the First Circuit Court of Appeals upholding that block while the government's appeal proceeds. The proclamation itself is set to expire around September 20, 2026 unless it's extended. So the original fee could come back on appeal, or lapse, before your next filing window.
And DHS is trying a second route. On August 25, 2026, DHS published a proposed rule for a new fee of roughly $103,265 on all cap-subject petitions, including the 20,000 master's-cap slots. It isn't in effect yet; the comment period runs through late September 2026, and if the original $100,000 fee is revived, the two could stack. When the original fee was briefly live, Cato notes it drove roughly an 87% drop in fee-subject petitions, so the stakes of the h1b visa cost to employer are real even while the number is unsettled.
Who's exempt matters as much as who pays. When it was in effect, the fee targeted new, cap-subject petitions, while renewals, workers already holding an H-1B, and in-U.S. change-of-status cases were exempt. In the chaotic first days, plenty of teams assumed current employees were suddenly on the hook. They weren't. If your H-1B population is stable and you're mostly renewing, your exposure to any revived fee is limited to net-new sponsorships.
The scale of the jump is what stings. The American Immigration Council notes employers previously paid roughly $2,000 to $5,000 per petition, and Gray, Gray & Gray LLP puts the all-in cost, including legal and filing fees, closer to $5,000 to $10,000. Against a six-figure fee, that's a 10x to 20x increase per hire.
Who's most exposed? High-volume sponsors in tech, SaaS, biotech, and financial services, the same companies that built entire hiring pipelines around H-1B talent. If your recruiting engine assumed a steady flow of cap-subject petitions at a few thousand dollars each, this whiplash didn't just raise a cost, it broke a core planning assumption. That's why this is a strategy question, not a paperwork one.
Should you pay it? A quick cost-and-risk gut check
Sometimes U.S. sponsorship is still the right call. If you're sponsoring a singular, hard-to-replace expert, a senior AI researcher, a specialized biotech lead, someone whose contribution dwarfs a six-figure line item, even a revived fee can be a rounding error against the value they create. For a small number of roles, you absorb the risk and move on.
But at volume, the math turns brutal fast. If a six-figure fee snaps back, a team bringing on 25 to 50 people would stack up $2.5M to $5M in fees alone, before salaries, before benefits, before you've shipped a single thing. Very few hiring plans survive that.
Then there's the bigger problem: you're betting on a moving target. Right now the $100,000 fee is blocked but could return on appeal, DHS has proposed a new ~$103,265 fee that isn't yet in effect, and every petition still runs through the annual lottery and months of lead time. That's a hard thing to put in a budget: a large, potentially non-refundable outlay tied to an outcome you don't control. Finance teams that once treated sponsorship as a predictable cost of hiring are now staring at a line item that behaves more like a wager.
There are other visas, and they're worth knowing. Gray, Gray & Gray LLP points to alternatives like the O-1, L-1, F-1 to H-1B change of status, and EB-1 or EB-2 green cards. These are genuinely useful for the right candidate. But they share a blind spot: each one still routes the person toward working on U.S. soil. They solve "which visa," not "do we need a visa at all."
That's the option the h1b alternatives conversation keeps underweighting. The most overlooked move isn't another visa. It's not requiring relocation in the first place.
The real shift: hire people where they already live
Here's the reframe that changes everything: talent is global, but the job doesn't have to sit on U.S. soil. If moving someone to America now means gambling on a six-figure fee that could snap back at any time, employ them in their home country instead. Same person, same work, no petition.
This isn't hypothetical. Economists cited by the American Immigration Council, and the Cato Institute directly, have warned that the fee will push hiring, investment, and innovation offshore, the classic "brain drain" effect. Companies aren't going to stop wanting this talent. They're going to build teams where the talent already is.
The candidate you'd have sponsored can usually keep doing the exact same job. On your team, reporting to your managers, from the city where they live today, as a full, legal employee. Not a contractor workaround, not a gray-area arrangement. A properly employed member of your team.
For a lot of roles, this is genuinely better, not just cheaper. Your engineer in Bangalore, your data scientist in São Paulo, your product lead in Berlin keeps their home, their network, and their timezone overlap with regional customers. You skip the visa lottery, the relocation package, and the months of limbo where a great hire sits in immigration purgatory instead of shipping work. The talent that was hard to access suddenly isn't.
We've long believed talent is everywhere, but opportunity is not. The fee fight just made that belief operationally obvious. The mechanism that makes it work without opening a foreign office is the Employer of Record model.
How an Employer of Record makes in-country hiring work
If you know the fee but not the EOR model, this is the part worth slowing down for. An Employer of Record is how you hire international employees without an entity, compliantly and quickly.
What an EOR is (in one paragraph)
An Employer of Record becomes the legal employer of your worker in their country, while you keep directing the day-to-day work. The EOR runs payroll, taxes, benefits, and local compliance under its own registered entity, so you don't have to stand up your own. You get the working relationship and the output; the EOR carries the legal and administrative load. That's the whole idea: full employment in another country, without you incorporating there.
EOR vs. contractor vs. opening your own entity
You have three real paths to employ someone abroad, and they're not equal for a role you'd otherwise sponsor.
- Contractor: Fast and cheap upfront, but for an ongoing, full-time role it carries genuine misclassification and IP-ownership risk. Papering a core team member as a freelancer is exactly the shortcut that triggers penalties later.
- Your own entity: Full control, but expensive and often months to stand up. Impractical when you're hiring one person or a small handful in a country.
- Employer of Record: Compliant full employment, onboarding in days to weeks, and it scales across countries as you grow. It's the practical middle path for replacing a would-be H-1B hire, which is why it's worth comparing directly against setting up a foreign entity.
The math: one $100K petition vs. an EOR seat
Compare a possible six-figure bet against a predictable monthly line item, and the choice gets clear. The H-1B route could cost six figures per new petition if a fee is revived, and it still runs through a lottery and multi-month processing cycle with an uncertain outcome. An Employer of Record replaces that with a transparent flat monthly fee per employee, no salary deposit and no pre-funding, and gets your hire productive far sooner.
Speed is the part finance teams underestimate. Borderless AI onboards employees in 5 to 7 business days and runs payroll in 3 to 5 days, versus the H-1B path where you're waiting on a lottery result before anyone starts. Predictability matters just as much: an EOR seat is a known number you can budget, while U.S. sponsorship is exposed to denial, a fee that could snap back, and a proposed new one.
The table is directional, not a quote, but the shape holds: one path is a large, uncertain bet; the other is a small, knowable cost. And unlike the petition, the EOR fee buys you flexibility. If the role changes, the market shifts, or the person moves, you adjust a subscription instead of writing off a six-figure payment. For a team hiring across several countries, that predictability compounds fast.
Don't trade one risk for another: compliance guardrails
Hiring abroad has real legal edges, and pretending otherwise would be exactly the kind of smoke-and-mirrors we can't stand. The good news: every one of these risks is manageable with the right partner.
- Permanent establishment. An in-country hire can create a taxable corporate presence for you if roles and contracts aren't structured carefully. A proper EOR employs the worker under its own entity, which is what keeps that permanent establishment exposure off your books.
- Worker misclassification. Don't paper over a full-time role with a contractor agreement to move faster. That's the classic misclassification trap; compliant local employment through an EOR closes it.
- IP ownership. Some jurisdictions don't automatically assign a worker's IP to the employer. Your contracts need valid, locally enforceable IP clauses, not U.S. boilerplate.
- Data privacy. Moving HR data across borders puts you under GDPR and its equivalents, so employee data has to be handled to local standard.
Here's how we take that load off your plate. Borderless AI runs on 100% owned in-country entities across 170+ countries, not third-party partners dressed up as global coverage. Built-in compliance tooling and AI alerts flag changing labor laws before they bite, and our AI agents, HRGPT and the Contract Generator, produce compliant local contracts fast. When you have a hard question, our 24/7 in-house North American support team, rated 4.9 out of 5 on G2, actually knows the answer.
What to do this quarter
You don't need a reorg to act on this. You need a short, honest audit.
- Price your real H-1B exposure. List your current and planned petitions and model their all-in cost under both the blocked $100,000 fee and the proposed ~$103,265 rule. The number is usually bigger than anyone expects.
- Sort the roles. Flag which jobs genuinely require U.S. presence and which don't. Most engineering, product, data, and research roles don't.
- Find where your candidates already live. For every "doesn't need to be here" role, identify the country and price an EOR seat against the petition.
- Move fast on the offers you'd otherwise lose. Speed is now a competitive advantage. While competitors debate whether to pay six figures, you can have someone employed and working in days. If you want the fuller playbook, our Global Hiring 101 guide covers the build-out.
Frequently asked questions
Who pays the $100K H-1B fee, and who is exempt?
Right now, no one: the original $100,000 proclamation fee is blocked by the courts and not being collected. When it was in effect, it applied to new, cap-subject petitions, with renewals and existing H-1B holders exempt. DHS has separately proposed a new ~$103,265 fee that is not yet in effect.
Should we pay the fee or find an alternative?
Banking on U.S. sponsorship means betting on a moving target: a blocked fee that could snap back, a proposed new ~$103,265 fee, plus the lottery and months of lead time. Absorb that risk only for singular, hard-to-replace roles. For most hiring, an in-country employment option is faster, cheaper, and far more predictable.
Can a U.S. company hire a foreign employee without setting up an entity?
Yes, through an Employer of Record, which becomes the legal employer in the worker's country on your behalf. You keep directing the work while the EOR handles payroll, taxes, and compliance.
What's the difference between an EOR and a PEO?
An EOR is the legal employer in a country where you have no entity. A PEO co-employs staff in a country where you already have one.
How fast can we onboard someone through an EOR?
Typically days to a couple of weeks. That's far quicker than the multi-month H-1B lottery and processing cycle.
Does hiring someone abroad create permanent-establishment risk?
It can if roles and contracts aren't structured carefully. That's exactly what a compliant EOR is built to prevent.
See it for yourself
The fee changed where the smart money hires. See how Borderless AI hires and pays talent compliantly in 170+ countries, with no entity and no six-figure petition. Experience Borderless AI with a live demo.
