H-1B $100,000 Fee Lawsuit Signals Labor Disruptions Beyond Tech

The first legal challenge to President Donald Trump’s $100,000 fee for new H-1B workers was launched by a coalition of employers well outside of Silicon Valley, showcasing the effects the steep new costs will have in fields from health care and education to religious ministries.

That mix of plaintiffs, among them a nurse recruiting firm and K-12 charter school, illustrate the broad swath of employers that rely on the program to address critical labor needs. Not represented in that group were the tech firms who make the biggest use of the program.

The fee makes the visa option suddenly cost prohibitive for hospitals recruiting nurses for hard-to-fill specialties like oncology, pediatrics, and nephrology, said Lalit Pattanaik, president and CEO of Global Nurse Force, the lead plaintiff in the Oct. 3 lawsuit.

“It’s truly a patient care issue,” he said. “These hospitals—nonprofits, in rural areas, and inner cities—they don’t have another $100,000 they can pay per nurse. It’s not financially viable.”

The proclamation was the Trump administration’s biggest attack so far on employment of foreign workers amid its broader crackdown on immigration in the US. It’s prompted corporate giants to consider new expansion of overseas offices.

It’s also threatened the services provided by schools and churches. And it will disrupt the pipeline of physician training in the US, the lawsuit argues. The Trump administration violated the Administrative Procedure Act by failing to consider those adverse effects, it claims.

One Global Nurse Force client, a Louisiana health-care system, had begun the process of petitioning for about 200 H-1B workers at multiple hospitals when the the White House proclamation was issued. Those hiring plans have been frozen, a scenario that’s played out with clients in Ohio, Maryland, and the Washington, DC, area, Pattanaik said. Instead of finding long-term US workers, those hospitals will become more reliant on expensive short-term options like travel nurses, he said, or offer fewer services.

“It’s having a ripple effect throughout the health-care system,” Pattanaik said. “Who ends up suffering? It’s these communities.”

Broad Visa Demand

About 64% of the nearly 400,000 approved H-1B recipients in fiscal year 2024—including new approvals and extensions—worked in computer-related fields. But nearly 17,000 workers approved for the status had jobs in medicine and health. And about another 24,000 worked in education jobs.

“We think of this as a Seattle, Bay Area, Boston-dominated program. It’s just not the case,” said Connor O’Brien, a research and policy analyst at Economic Innovation Group who focuses on skilled immigration. “H-1Bs are all over the country, doing all sorts of things.”

The Trump administration clarified after the panic caused by the proclamation’s initial rollout that only new H-1B petitions would be affected. But attorneys—absent other guidance from the White House—have interpreted that to mean that nonprofit and research-based organizations exempt from an annual visa cap, like many hospitals, are immediately subject to the fee.

The lawsuit filed in the Northern District of California aimed to show that the fee will affect “a lot more people across the entire United States—not just in Silicon Valley or the coasts—than people appreciate,” said Esther Sung, legal director at Justice Action Center and counsel for plaintiffs.

Global Village Academy, a Colorado charter school provider that joined the litigation, relies on the program to recruit foreign language teachers from outside the US. The fee may lead its schools to cut back on programs including language instruction, the suit said.

Another plaintiff group, the Committee of Interns and Residents, a Service Employees International Union local representing more than 40,000 medical students, said members training in the US on J-1 exchange visitor visas will be effectively blocked from returning on H-1B visas.

The Fathers of St. Charles, a Catholic missionary group, recruits multilingual religious workers on temporary visas to serve Latin American, Brazilian, and Vietnamese communities. Because religious worker visas are limited to five-year periods, being forced to pay $100,000 for new H-1B petitions would be “devastating” to the congregation, according to the suit.

Exemptions Sought

The Trump administration has said the fee will help to address abuses in the H-1B program, especially by tech employers. Hospital groups and lawmakers have pressed the Trump administration to grant blanket exemptions for the health-care field.

The White House referred to the text of the proclamation, which allows for potential fee exceptions, but didn’t respond to questions about industry-wide waivers.

Hospitals, schools, and small businesses have the fewest alternatives to the H-1B program relative to corporate users, said Zeke Hernandez, a professor at the University of Pennsylvania’s Wharton School of Management.

“The H-1B is sort of the last resort,” he said. “These organizations have already exhausted the local talent pool and they’re turning to these visas out of real need and desperation in many cases.”

Some Wall Street firms are expected to expand some overseas operations in response to the fee. The US Chamber of Commerce surveyed its members on their interest in suing to block the H-1B fee, Bloomberg News reported.

Companies that most heavily use the H-1B program—among them, Amazon.com Inc., Microsoft Corp., and Facebook parent company Meta Platforms Inc.—are likely reluctant to take the Trump administration to court because they have many other business interests in front of the White House, exposing them to potential retaliation, said Gil Guerra, an immigration policy analyst at the Niskanen Center, a Washington, DC, think tank.

For smaller businesses and employers in fields like health care or education, “this is probably your best option,” he said.

Pattanaik said health-care providers in the US are competing against employers in the United Kingdom, Germany, and countries in the Middle East.

“When these doors are shut in the US, the talent will go to other areas where it’s needed,” he said.