Proposed $103,265 H-1B Fee: How U.S. Employers Should Reassess International Hiring Costs

The U.S. Department of Homeland Security has proposed an additional $103,265 fee for every cap-subject H-1B petition. If finalized near that amount, the proposal would turn H-1B sponsorship from a manageable immigration expense into a major workforce investment.

The fee is not currently in effect. DHS published a notice of proposed rulemaking on August 25, 2026, and opened a public-comment period through September 24, 2026. The proposal may change before a final rule is issued, and there is no guarantee that it will take effect in its current form.

Employers should therefore avoid two premature reactions: treating the fee as though it is already owed or dismissing H-1B recruitment altogether. The useful response is to identify which planned hires would be affected and compare the complete cost of sponsorship with the available workforce alternatives.

For every difficult-to-fill role, the executive question is the same:

Should we still recruit this role internationally—and, if so, where and under what employment model?

This article examines that workforce decision. It does not assess the proposal’s legal prospects or provide immigration, tax or employment-law advice.

What has DHS proposed?

Under the proposed rule, DHS would impose a $103,265 fee when an employer files a cap-subject H-1B petition. The proposal also covers petitions eligible for the advanced-degree exemption. DHS describes the charge as an additional fee, meaning it would sit on top of other applicable filing fees or payments.

The proposal does not apply to every H-1B petition as currently written. DHS states that the new fee would apply to cap-subject filings rather than cap-exempt H-1B petitions.

The distinction matters. Employers should not assume that every current or future H-1B worker would trigger the proposed fee. The facts of the position, petitioner, candidate and filing would still need to be reviewed by qualified immigration counsel.

Employers can review the full DHS notice of proposed rulemaking in the Federal Register.

Why a $103,265 fee would change the hiring calculation

Visa sponsorship already involves more than a filing fee. Employers must account for recruitment, compensation, legal and filing expenses, internal administration, onboarding, timing and the risk that a planned hire will not proceed as expected.

The proposed fee would add more than $100,000 to that calculation before considering the other costs associated with the hire.

A useful workforce model is:

Total hiring cost = recruitment + compensation + immigration costs + onboarding + vacancy cost + delay and retention risk

The proposed fee would not make international recruitment uneconomic in every case. Its effect would depend on the value of the role, the availability of talent in the United States, the cost of leaving the position vacant and whether the work must be performed inside the country.

Sponsorship may remain commercially defensible when:

• the role requires expertise that a credible domestic search has not found;
• the position directly affects revenue, production, safety or critical operations;
• the candidate holds scarce technical or institutional knowledge;
• the work must be performed in the United States; and
• the expected value of a successful, long-term hire materially exceeds the total sponsorship cost.

The proposed fee would be harder to justify for a junior or broadly available position, a role with high turnover, work that can be performed effectively overseas or a search in which the employer has not tested realistic domestic options.

The correct decision should be based on the economic and operational value of filling the role—not simply the employer’s preference for a particular candidate.

Start with the role, not the visa

Employers often begin an international search by asking whether a candidate can obtain a particular visa. That question comes too early.

Before choosing an immigration or recruitment pathway, the employer should define what the business actually requires:

1. Must the work be performed in the United States?
2. Must the worker be employed directly by the U.S. company?
3. How scarce is the required expertise in the domestic market?
4. How long can the position remain vacant?
5. What revenue, productivity or operational cost does the vacancy create?
6. Is the need permanent, temporary or tied to a defined project?
7. Could the work be divided, relocated or delivered through another operating model?
8. Are other immigration pathways potentially available?

These questions separate a genuine U.S.-based talent requirement from a role that can be filled through domestic recruitment, overseas employment, nearshoring or temporary staffing.

Option 1: Intensify domestic recruitment

A six-figure additional petition fee would justify taking a harder look at the U.S. talent market. That does not mean reposting the same job description and waiting longer.

Employers should test whether their own requirements are restricting the search unnecessarily. A structured recruitment optimisation assessment can identify problems with role definition, compensation, sourcing strategy and hiring workflow before the employer concludes that domestic talent is unavailable. A credible domestic recruitment effort may involve:

• adjusting compensation to reflect the scarcity of the skill;
• expanding the geographic search area;
• offering remote or hybrid work where the job permits it;
• reconsidering degree, industry or years-of-experience requirements that are not essential;
• recruiting from adjacent occupations or industries;
• providing relocation assistance;
• developing qualified internal employees; or
• using recruiters with access to a specialized talent market.

Domestic recruitment is not automatically the cheapest option. A critical position left vacant for another six months can cost more than sponsorship through delayed projects, lost production, missed revenue or pressure on the existing team.

Employers need to measure the cost of the vacancy rather than comparing the proposed H-1B fee with a recruitment fee alone.

Option 2: Continue with H-1B sponsorship

Some roles may still justify H-1B sponsorship even if the proposed fee takes effect.

The strongest cases will be positions that must be based in the United States, require genuinely scarce expertise and produce enough long-term business value to absorb the additional cost. Before proceeding, employers should model:

• all anticipated petition, legal and recruitment costs;
• the business cost of leaving the position vacant;
• the timing and uncertainty associated with the hiring process;
• the candidate’s expected contribution and likely length of employment;
• the cost and difficulty of replacing the employee; and
• whether another immigration pathway may be available.

GRE can help assess the position, sourcing market and recruitment options. Immigration counsel should determine eligibility, filing strategy and the legal implications of the proposed or final rule.

Option 3: Employ the worker outside the United States

If the job does not require the employee to be physically present in the United States, overseas employment may preserve access to international talent without moving the worker into the U.S. labor market.

An employer might hire through an existing overseas entity, establish a local operation or use an appropriately structured employer-of-record arrangement. Each model changes the cost and compliance profile of the hire.

The assessment should include:

• local employment and payroll obligations;
• tax and permanent-establishment exposure;
• data security and access requirements;
• intellectual-property protection;
• time-zone and management demands;
• compensation in the local talent market; and
• the long-term plan for the role and worker.

Overseas employment is not a compliance shortcut. It replaces a U.S. immigration question with a different set of employment, tax and operational requirements. Employers should involve qualified advisers before selecting the country or employment structure.

Option 4: Nearshore the role or function

Nearshoring can work when a company needs access to a broader talent pool while retaining closer time-zone alignment, manageable travel and regular collaboration with U.S. teams.

The employer must decide whether it needs one individual, a dedicated team or an outsourced function. That decision affects recruitment, supervision, intellectual-property controls, worker classification and service continuity.

A nearshore strategy should be evaluated against:

• the depth of the required skills in the target country;
• language and working-hour compatibility;
• direct employment versus contractor or service-provider arrangements;
• local compensation and operating costs;
• quality control and performance management; and
• the company’s capacity to manage a distributed workforce.

Nearshoring should not be treated simply as a lower-cost substitute for U.S. employment. It is an operating-model decision. A poorly managed nearshore team can create more delay and expense than the vacancy it was intended to solve.

Where contract staffing and RPO fit

Contract staffing and recruitment process outsourcing are not direct alternatives to a visa or employment location. They determine how a company obtains and manages talent, not necessarily where the worker is employed.

Contract staffing may suit temporary demand, project work or a role whose long-term headcount has not been approved. It can improve flexibility, but it does not automatically remove immigration, worker-classification or co-employment concerns.

Recruitment process outsourcing can support domestic hiring, an international search, nearshore workforce development or a combination of those approaches. A capable RPO partner can test different sourcing markets, manage pipelines, standardize candidate verification and give the employer evidence about where qualified talent can realistically be found.

The recruitment model should follow the workforce decision. An employer first needs to establish where the work will be performed, how the worker will be employed and which legal pathways may apply.

Comparing the workforce options

No option wins by default. The right choice depends on the position, location requirement, available talent, vacancy cost and the employer’s ability to manage the resulting workforce model.

Calculate the cost of leaving the role vacant

Consider a U.S. employer using an international IT recruitment agency to fill a specialised technology position. The role has already remained vacant for six months, and the employer estimates that the vacancy delays $40,000 in productive work each month. The position has already remained vacant for six months, and the employer estimates that the vacancy delays $40,000 in productive work each month.

If another six-month domestic search produces the same result, the additional vacancy cost could reach $240,000. In that example, a $103,265 fee would still be substantial, but sponsorship might remain economically defensible if it materially improved the employer’s ability to fill a U.S.-based role with a candidate expected to create long-term value.

The calculation changes for a junior position that can be filled domestically, performed from another country or reorganized as project work. The same fee could exceed the business value created by the hiring pathway.

These examples are illustrative. Employers need their own estimates for vacancy cost, productivity, revenue impact, retention and implementation risk.

What employers should do while the fee remains proposed

Employers should prepare without treating the proposal as a final rule.

1. Do not add the fee to current hiring budgets as a settled requirement. Track the rulemaking and clearly label internal estimates as contingent.
2. Identify planned hires that may rely on cap-subject H-1B petitions. This establishes the potential financial exposure.
3. Calculate the business cost of each vacancy. Include delayed work, lost production, missed revenue and pressure on existing employees where those effects can be supported.
4. Determine which roles must be performed in the United States. Do not default to sponsorship when the work can be structured effectively elsewhere.
5. Compare domestic, sponsorship, overseas and nearshore models. Use total workforce cost, not salary or filing fees alone.
6. Separate workforce advice from legal advice. Recruitment specialists can assess talent markets and hiring models; qualified legal and tax advisers should evaluate immigration and employment structures.
7. Reassess the plan if DHS issues a final rule. The scope, amount, timing or implementation requirements may change.

Addressing frequently asked questions

Is the proposed $103,265 H-1B fee currently in effect?

No. DHS published the fee in a notice of proposed rulemaking on August 25, 2026. The proposal is subject to a public-comment and rulemaking process.

Which H-1B petitions would the proposed fee cover?

As currently written, the proposal would cover cap-subject H-1B petitions, including those eligible for the advanced-degree exemption. Employers should confirm the scope of any final rule and obtain advice on individual filings.

Would the proposed fee replace existing H-1B filing costs?

No. DHS describes the $103,265 amount as an additional fee imposed alongside other applicable fees or payments.

Would the fee apply to cap-exempt H-1B petitions?

DHS states that the proposed fee would apply to cap-subject filings rather than all H-1B petitions. The circumstances of a specific employer, position and petition should be reviewed by immigration counsel.

What alternatives should employers compare with H-1B sponsorship?

The main workforce alternatives are a stronger domestic search, overseas employment and nearshoring. Contract staffing may suit temporary or project demand, while RPO can manage recruitment across one or more of those workforce models.

International recruitment will become more selective

If DHS finalizes the proposed fee, international recruitment into the United States will not disappear. Employers will reserve H-1B sponsorship for positions whose location, scarcity and expected business value justify the total cost.

Other roles will move toward stronger domestic recruitment, overseas employment, nearshoring or a different mix of permanent and contract talent. The employers that make these decisions well will start with the work that must be done and then select the country, employment structure and recruitment model.

Global Recruitment Experts helps employers assess talent availability, sourcing markets and recruitment delivery across more than 50 countries.

Unsure whether international recruitment remains viable for a difficult-to-fill role? Request an International Hiring Feasibility Assessment.

^{This article provides general workforce-planning information and does not constitute immigration, tax, employment or other legal advice. Employers should consult qualified advisers about their specific circumstances.}