(MENAFN- Live Mint)

BENGALURU : US President Donald Trump's decision to raise the H-1B visa fee for new applicants has hit a legal hurdle, and it is not from the information technology sector, which accounts for most of these visas.

At least nine complainants, including employee unions from sectors such as healthcare, education, agriculture, automobile, and aerospace, have filed a complaint through seven law firms in a California court against Trump's order, requesting that the court deem the proclamation unlawful and process H-1B visas in accordance with existing laws.

The law firms are Justice Action Centre, Democracy Forward Foundation, Kuck Baxter Llc, South Asian American Justice Collaborative, Joseph & Hall, P.C., Bless Litigation Llc, and Siskind Susser.

On 19 September, Trump issued a presidential proclamation, Restriction on Entry of Certain Nonimmigrant Workers, mandating a $100,000 fee for new H-1B visa petitions-part of his administration's effort to address alleged misuse of the programme. The measure does not apply to existing H-1B holders or renewals.

The complainants, led by Global Nurse Force, a California-based healthcare business that provides nurses to hospitals across the US, called the move illegal.

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“Defendants' abrupt imposition of the $100,000 requirement is unlawful. The President has no authority to unilaterally alter the comprehensive statutory scheme created by Congress. Most fundamentally, the President has no authority to unilaterally impose fees, taxes, or other mechanisms to generate revenue for the US, nor to dictate how those funds are spent," read the complaint.

The complaint said Trump exercised power he does not have.“The Constitution assigns the 'power of the purse' to Congress, as one of its most fundamental premises. Here, the President disregarded those limitations, asserted power he does not have, and displaced a complex, Congressionally specified system for evaluating petitions and granting H-1B visas," added the complaint.

The complainants said the proclamation opens the floodgates to corruption.

“The proclamation transforms the H-1B programme into one where employers must either 'pay to play' or seek a 'national interest' exemption, which will be doled out at the discretion of the secretary of homeland security, a system that opens the door to selective enforcement and corruption," said the complaint.

They also said the government failed to consider the economic harm that the visa curbs would cause.

“The government failed to consider how extorting exorbitant fees will stifle innovation. The government failed to consider the harm to hospitals, churches, schools, universities, small businesses, and non-profits, or how the fee would harm communities across the nation. Indeed, economic data and studies confirm that the new $100,000 requirement will harm, not help, the US economy and workers and their families in the US," read the complaint.

Questions were also raised on the order's claims of threats to national security.

“The proclamation claims, without evidence or explication, that abuses of the H-1B programme are so serious as to be a threat to national security. But the government's own enforcement reflects otherwise," said the complaint, stating that the US department of labour is charged with investigating fraud and abuse when an employer applies for the H-1B visa.

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They added that the labour department maintains a database of companies that abused the H-1B programme and are banned from it. For now,“there are just eight companies on this list and only two were added in 2025, while tens of thousands of employers have used this programme in recent years".

Sectors that benefit from H-1B

Most H-1B visas are snapped up by IT companies. Seven of the 10 largest users of these visas are technology firms, including Tata Consultancy Services Ltd and Cognizant Technology Solutions Corp., according to data from US Citizenship and Immigration Services.

The top 10 users accounted for 36,737 visas, more than half of the total number of H-1B visas issued in 2024-25, as of June 30. The US government follows a fiscal calendar from October to September.

Other sectors, including education and healthcare, also benefit from the visa, which allows foreigners to take on specialised roles in the US on a temporary basis. However, a profession-wise breakdown is not available for H-1B visa use.

“The H-1B visa programme is a critical pathway to hiring educators and healthcare workers-two categories in high demand in the US-who comprise 10% of all H-1B workers," the complaint claimed.

Even religious organisations are using the H-1B visa, as it allows them to retain priests and pastors who possess the“language skills, cultural competency, and religious training needed to minister to underserved populations, including poor refugee and migrant communities and economically distressed Appalachian communities".

The unions said these visas are beneficial for the economy in the long run, as the programme“drives innovation and economic growth in the US. It allows employers to fill labour shortages in specialized fields and encourages workers to invest additional dollars in the US economy. It supports immigrants in creating new businesses that expand the US labour market".

Unlawful use

The lawsuit stated that the Immigration and Nationality Law acts as a watchdog in preventing unlawful use of H-1B visas.

The Congress sets numerical limits on the annual number of H-1B workers, except for those employed by higher education or research institutions, who are exempt from the statutory“cap" on the number of visas available per fiscal year, according to the complaint.

Currently, 65,000 H-1B visas are allowed, with an additional 20,000 available for individuals who have earned a master's or higher degree from a US institution of higher learning.

H-1B employees also tend to receive higher salaries than those in similar roles.“This prevailing wage requirement is designed to ensure that employers cannot undercut the US labour market by hiring H-1B workers and paying them lower wages than those typical for their job in the US labour market," said the lawsuit.

While filing for an H-1B application, employers must state that placing an H-1B worker will not result in the displacement of an American worker. Any employer misusing the visa programme will face orders and might have to“pay back wages, civil monetary fines, and debarment, among other penalties. A debarred employer is prohibited from receiving approval for future H-1B petitions and other employment-based visa petitions".

Application process

To apply for an H-1B status for a worker, employers must first register the prospective employees in an annual lottery that is generally held in March of each year. The employer must petition for an H-1B employee by first submitting a Labour Condition Application to the labour department, which reviews and certifies it within a week.

Also Read | The curious divergence in tech stocks' H-1B respons

After the close of the registration period, the US Citizenship and Immigration Services (USCIS) performs a computer-generated lottery selection and then notifies those petitioners whose registrations were selected.

On the other hand, cap-exempt employers are not required to register or participate in the annual lottery; however, they must establish, to the satisfaction of USCIS, their cap-exempt status. They can file petitions directly and are not limited to filing on a particular cycle.

On average, employers would have to pay $7,595 for the visa, according to the complaint.

Political campaign against H-1B

On 30 September, Tom Cotton, a Republican senator from Arkansas, introduced the Visa Cap Enforcement Bill in the US Senate, aiming to strip colleges, non-profits and research institutes of their long-standing exemption from annual H-1B visa limits.

Almost a week prior, on 24 September, Republican senator Charles E. Grassley and Democratic senator Richard J. Durbin targeted several companies, including TCS and Cognizant, over their hiring practices.

Both senators wrote a joint letter to K. Krithivasan and S. Ravi Kumar, chief executives of TCS and Cognizant, respectively, seeking responses on the claims of race-based discrimination and substituting American workers with low-cost H-1B employees.

Earlier in September, Ohio senator Bernie Moreno proposed the Halting International Relocation of Employees (HIRE) Act to increase taxes on companies that hire offshore employees from their IT vendors.

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