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THE NEW H-1B LANDSCAPE: PROJECT FIREWALL & THE $100,000 H-1B
The U.S. government has paired a new $100,000 H-1B petition fee with Project Firewall, authorizing Secretary-certified investigations. Employers now face steep costs, anonymous tips, broad audits, and major penalties. Proactive compliance is essential.
Lawsuit Filed on Oct. 3, 2025
A lawsuit has been filed in the Northern District of California challenging the September 19 presidential proclamation that imposes a $100,000 surcharge on H-1B visas. This substantial fee has raised concerns for H-1B visa holders, their families, and their employers, and media coverage has underscored potential negative effects on sectors such as healthcare, education, manufacturing, and technology. U.S. employers are reassessing growth plans and absorbing the administration’s decree amid widespread uncertainty.
The case represents a diverse group of H-1B beneficiaries and related organizations, with plaintiffs spanning sectors from healthcare to aerospace. A hearing in the coming weeks will examine the scope of INA Section 212(f) and determine whether this sweeping order will stand.
Global Nurse Force, a California-based staffing company that has placed more than 10,000 nurses at over 175 hospitals worldwide, has submitted in court filings that the six-figure H-1B fee will immediately halt nurse recruitment, force the company to shut down its U.S. operations, and worsen hospital staffing shortages—particularly harming ICUs, emergency rooms, and surgical units, with disproportionate impacts on rural and inner-city communities.
IMMPact Litigation - a collaboration of law firms- leads the effort, with support from the Justice Action Center and Democracy Forward. Stay tuned for updates.
PDF: The Filed Lawsuit Challenging the $100,000 Fee
H-1B Under Fire: Project Firewall and the $100,000 Fee
New Era of Cost & Compliance
On September 19, 2025, the federal government announced two major shifts that will redefine the H-1B landscape:
- The $100,000 H-1B Fee Proclamation – employers filing petitions for workers outside the U.S. must now pay a $100,000 fee per petition, unless DHS grants a narrow national-interest exemption.
- Project Firewall – for the first time in history, the Secretary of Labor will personally certify broad H-1B investigations based on “reasonable cause,” ending the complaint-only model. The Department described the effort as an “H-1B enforcement initiative that will safeguard the rights, wages, and job opportunities of highly skilled American workers by ensuring employers prioritize qualified Americans when hiring and holding employers accountable if they abuse the H-1B visa process.”
Together, these measures impose both steep new costs and unprecedented enforcement pressure—a fundamental reset of how employers must approach the H-1B program. Notably, the $100,000 fee and Project Firewall were announced on the same day, signaling a coordinated federal strategy to increase both the cost and compliance pressure on H-1B employers.
The $100,000 Fee Proclamation
On September 19, 2025, the Trump Administration issued a proclamation imposing a $100,000 fee on most new H-1B petitions for workers abroad.
Stated purpose: According to the administration, the fee is intended to deter program abuse and ensure that only the “highest-skilled” workers are hired. Framed as a measure to protect U.S. jobs, it has already sparked lawsuits and widespread criticism for relying on selective economic claims.
Rulemaking directives: The proclamation also directs:
- The Secretary of Labor to initiate rulemaking to revise prevailing wage levels for H-1B workers.
- The Secretary of Homeland Security to propose changes prioritizing higher-paid, higher-skilled workers in the H-1B selection process.
Key Clarifications
- Prospective only: According to CBP and USCIS, the fee applies to petitions filed on or after September 21, 2025.
- Effective date: September 21, 2025, for 12 months (unless extended).
- Scope: Applies to most new H-1B petitions filed for workers abroad.
- Current petitions and visas unaffected: Individuals with approved petitions, pending petitions filed before September 21, or valid H-1B visas are not subject to the fee.
- Travel permitted: Current H-1B employees who did not pay the fee should still be able to travel abroad and re-enter, provided they hold valid documents.
- Change of status cases: F-1 students and others changing to H-1B status from within the U.S. are not expected to trigger the $100,000 fee requirement.
- Cap-exempt organizations at risk: Universities and nonprofits filing new H-1B petitions for workers abroad would need to pay the fee, absent further guidance.
- Exemptions: The proclamation allows DHS to waive the fee for individuals, entire companies, or even industries if hiring is deemed in the national interest and poses no security risk. The scope of this exemption remains undefined, leaving employers uncertain about how it will be applied. Critics warn the fee will push more work offshore to Canada and India, while discouraging highly skilled innovators and entrepreneurs from pursuing opportunities in the U.S.
Related Rulemaking: On September 24, 2025, DHS published a Notice of Proposed Rulemaking to change the H-1B cap lottery. The proposal would weight selection toward higher-wage, higher-skilled positions, aligning with the proclamation’s stated goals.
Legal Challenges and Court Precedent
- Multiple lawsuits are expected, arguing that the proclamation exceeds presidential authority under 8 U.S.C. §1182(f) and unlawfully rewrites provisions of the Immigration and Nationality Act. Courts have struck down similar actions before:
- NAM v. DHS (2020): A federal court blocked a proclamation suspending H-1B and other visas, holding the President cannot rewrite immigration law under the guise of regulating entry.
- Thein v. Trump (2025): A court enjoined part of a travel ban, ruling that §1182(f) allows the President to bar entry, but not to block visa issuance or petition approvals.
- Implication: These precedents suggest courts may again limit presidential authority if the $100,000 fee is found to overstep into areas reserved for Congress.
PROJECT FIREWALL: SECRETARY-CERTIFIED INVESTIGATIONS
From Complaint-Driven to Secretary-Certified
For over 30 years, since the Immigration Act of 1990, LCA enforcement was complaint-driven. An investigation could begin only if an aggrieved worker (or group on their behalf) filed a valid complaint. In Greater Missouri Healthcare (2013), the court further limited DOL, holding that it could not look beyond the “four corners” of the complaint.
Project Firewall ends that model. The Secretary of Labor may now launch broad, wall-to-wall investigations based only on “reasonable cause,” a far lower threshold than before. No complaint is required, and employers will not know who triggered the case.
Key Features
- For the first time, the Secretary of Labor can personally certify ‘wall-to-wall’ investigations of an employer’s entire H-1B program. Secretary Lori Chavez-DeRemer stated the Department will, for the first time, personally certify the initiation of investigations to “maximize H-1B program compliance.”
- Legal standard: Only “reasonable cause” is needed—a very low bar.
- Anonymous complaints: Employers will not know who filed the complaint or what evidence triggered the case.
- Broad referral sources: Tips can come from anonymous sources, DOJ’s Civil Rights Division, EEOC, USCIS, or anti-H-1B campaigns.
- Scope: Once initiated, investigations can examine all aspects of an employer’s H-1B program.
Enforcement Target Areas:
DOL has signaled several areas that will be early targets in investigations:
- Notice posting – Hard copies at third-party sites or postings on a host employer’s intranet accessible to affected workers are required. Reliance on the sponsoring employer’s own website is not sufficient.
- Prevailing wage “leveling” – DOL may reclassify jobs upward if actual duties and experience exceed the wage level filed, creating substantial back-pay liability.
- U.S. worker displacement – Layoffs combined with H-1B hiring are high-risk triggers for investigation.
- Handling applicant inquiries – Employers increasingly receive emails from U.S. workers citing jobs listed in LCAs. Best practice is to accept the resume and confirm the worker will be considered for future opportunities. Ignoring inquiries can strengthen claims that U.S. workers were denied fair notice.
- Wage theft: Underpayment or withholding of wages owed to H-1B workers will be a top enforcement priority.
- Misrepresented worksites/job duties: DOL is scrutinizing discrepancies between LCAs and actual assignments.
Who Is At Risk
- Indian IT outsourcing companies filing large volumes of H-1B petitions and placing workers across industries.
- Major U.S. tech firms such as Amazon, Google, Intel, and Microsoft.
- Retailers and non-tech employers using H-1Bs directly or via staffing agencies.
- Any company with recent layoffs while continuing H-1B hiring, especially in the tech sector.
Penalties
Violations are assessed per worker, per violation:
- Up to $18,111 for non-willful violations (e.g., improper postings, misclassifications).
- Up to $307,370 for willful or repeat violations.
- Back wages may be owed to both H-1B workers (for underpayment) and U.S. workers (for displacement).
- Employers risk temporary debarment from the H-1B program.
Preparing for an Investigation: Employer Action Plan
With Project Firewall, investigations can start without notice and cover the entire H-1B program.
Key Immediate Steps for Employers Relying on H-1B (with Kennedy Law support):
- Commission a privileged LCA compliance audit – review postings, wages, SOC codes, and attestations. Kennedy Law conducts attorney–client privileged reviews of LCAs, petitions, and filings to identify risks before DOL scrutiny.
- Document postings correctly– use hard copies or host-site intranets; capture dated screenshots, notices, or intranet records. We show you what evidence counts to show compliance.
- Anticipate prevailing wage challenges – we position your filings and defenses if DOL attempts to reclassify jobs at higher wage levels, ensuring duties and credentials align with the wage level filed. We prepare legal defenses if DOL attempts to “re-level” positions.
- Prepare for U.S. worker inquiries – we draft compliant language for acknowledging resumes and demonstrating fair consideration.Review recruitment and hiring practices – confirm U.S. workers are not disadvantaged. Kennedy Law helps frame lawful responses when layoffs or job postings overlap with H-1B hiring.
- Train HR/legal staff – set a protocol for handling U.S. worker inquiries by accepting resumes and noting future consideration. We draft the compliant language to use in acknowledgments.
- Prepare for interagency inquiries – audits may involve DOL, DOJ, EEOC, USCIS, or OIG. Kennedy Law coordinates responses so nothing conflicts across agencies.
- Review vendor and client contracts – confirm job descriptions and locations match certified LCAs. We flag risks where contracts misalign with what was filed.
- Expect increased data-sharing — discrepancies may trigger penalties. Kennedy Law tracks enforcement patterns and prepares employers for multi-agency reviews.
- Evaluate exposure to the $100,000 fee – DHS may grant exemptions where hiring is deemed in the national interest, but criteria remain unclear. We advise on applicability, exemptions, and ongoing litigation.
Bottom line: The $100,000 fee creates immediate cost exposure and uncertainty. Kennedy Law helps employers preserve defensible records, anticipate risks, and prepare before an agency audit begins.
WORKER GUIDANCE
- H-1B employees can contact the DOL Wage and Hour Division at 1-866-4-US-WAGE for confidential guidance if they suspect wage theft or misrepresentation.
BOTTOM LINE
The combination of Project Firewall and the $100,000 H-1B fee is a turning point. Together, the Fee Proclamation and Project Firewall represent the most sweeping reset of the H-1B system in decades. Employers must expect more investigations, bigger penalties, and higher costs. Investigations are broader, penalties steeper, and costs higher. Employers with large or growing H-1B programs should expect increased scrutiny, potential audits, and heavier compliance burdens. Proactive compliance and early planning are essential to safeguard business operations. Now is the time to audit, document, and prepare.
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