A federal judge on Tuesday rejected a challenge by the nation's largest business lobby to President Donald Trump's $100,000 fee on new H-1B visas for highly skilled foreign workers, ruling that the charge falls within the president's broad authority to regulate immigration.

U.S. District Judge Beryl Howell in Washington, D.C., denied a request from the U.S. Chamber of Commerce and Association of American Universities to block the fee and granted summary judgment to the Trump administration. The 56-page decision marks the first judicial test of the policy, which has faced criticism from employers since Trump signed the proclamation in September.

"The lawfulness of the Proclamation and its implementation rests on a straightforward reading of congressional statutes giving the President broad authority to regulate entry into the United States for immigrants and nonimmigrants alike," Howell, an appointee of former President Barack Obama, wrote in her opinion.

Howell said she was compelled to rule in the administration's favor due to how Congress had written two sections of the Immigration and Nationality Act.

"Congress could have, but did not, impose the limit on presidential authority that plaintiffs urge," the judge wrote.

The legal arguments

The Chamber of Commerce and Association of American Universities argued that the $100,000 fee conflicts with federal immigration law, which they said allows the executive branch only to charge fees that offset the cost of administering visa programs. They also contended that any new charges should go through public notice-and-comment rulemaking.

The business groups argued the fee would lead many companies, hospitals and other employers to cut jobs and reduce services they provide to the public.

Howell rejected these arguments, writing that the debate over the policy's wisdom is not for the courts to decide.

"The parties' vigorous debate over the ultimate wisdom of this political judgment is not within the province of the courts," Howell wrote. "So long as the actions dictated by the policy decision and articulated in the Proclamation fit within the confines of the law, the Proclamation must be upheld."

Daryl Joseffer, executive vice president and chief counsel of the Chamber of Commerce, said in a statement that the organization is disappointed and considering further legal options.

"The $100,000 fee makes H-1B visas cost prohibitive for businesses, especially small- and medium-sized businesses that can least afford it," Joseffer said. "We are disappointed in the court's decision and are considering further legal options to ensure that the H-1B visa program can operate as Congress intended: to enable American businesses of all sizes to access the global talent they need to grow their operations."

The White House did not immediately respond to requests for comment.

Administration's rationale

The Trump administration has said the new fee is necessary to deter abuse of the H-1B system and to encourage employers to fill positions with American workers rather than hiring immigrants for entry-level positions.

Officials claim the $100,000 charge will ensure employers consider who is worth the cost and target visas toward high-skilled workers, as the program intended.

"The existing random selection process of H-1B registrations was exploited and abused by U.S. employers who were primarily seeking to import foreign workers at lower wages than they would pay American workers," said U.S. Citizenship and Immigration Services spokesman Matthew Tragesser.

Vice President JD Vance said Sunday that the administration has worked "to restrict H-1B visas" because it believes it is wrong for companies "to bypass American labor just to go for cheaper options in the third world."

The fee proclamation was issued with so little warning that federal immigration agencies were largely left to fill in the details in subsequent weeks. The Department of Homeland Security later clarified that only new petitions for H-1B workers would be affected, not current employees. Foreign students approved for H-1B status within the United States are also exempt from the charge.

Ongoing legal challenges

The ruling represents a victory for the White House, but the administration faces additional legal challenges in at least two other courts.

A coalition of states led by California and Massachusetts has filed a separate lawsuit seeking to block the fee. Attorneys general from 20 states, including California and New York, have sued the Trump administration over the charge, according to the New York Times.

The Chamber of Commerce is represented by the U.S. Chamber Litigation Center and McDermott Will & Schulte. The government is represented by the Department of Justice.

The case is U.S. Chamber of Commerce v. DHS, No. 1:25-cv-03675, in the U.S. District Court for the District of Columbia.

Broader changes to H-1B program

The ruling came the same day that the Department of Homeland Security announced it was replacing its longstanding lottery system for H-1B work visas with a new approach that prioritizes skilled, higher-paid foreign workers.

The new system will "implement a weighted selection process that will increase the probability that H-1B visas are allocated to higher-skilled and higher-paid" foreign workers, according to a DHS press release. The change will go into effect February 27, 2026, and will apply to the upcoming H-1B cap registration season.

A DHS press release said the new rule is "in line with other key changes the administration has made, such as the Presidential Proclamation that requires employers to pay an additional $100,000 per visa as a condition of eligibility."

The H-1B system is capped annually at 85,000 visas per fiscal year, with 20,000 of those set aside for applicants with advanced degrees. Certain types of employers are also exempt from the cap.

This year, Amazon was by far the top recipient of H-1B visas, with more than 10,000 approved, followed by Tata Consultancy Services, Microsoft, Apple and Google. California has the highest concentration of H-1B workers.

Supporters of the H-1B program say it is an important pathway to hiring healthcare workers and educators and that it drives innovation and economic growth in the United States.

Critics argue that the visas often go to entry-level positions rather than senior roles requiring specialized skills. While the program is intended to prevent wage suppression or the displacement of U.S. workers, critics say companies can pay lower wages by classifying jobs at the lowest skill levels, even when the workers hired have more experience.

Indians make up more than 70 percent of H-1B recipients in recent years, meaning any changes to the program will disproportionately affect workers from that country.