If your hiring plan depends on sponsoring a senior engineer who is currently outside the US, here is where things stand in late September 2026. The $100,000 H-1B fee is blocked by a federal court and is not being collected. The administration has also extended the proclamation behind it to September 2027, and DHS has proposed a separate fee of about the same size through regular rulemaking. For a startup the practical answer is not to wait for the courts. Build a plan that works whether the fee comes back or not.
That is the rest of this post: what actually changed, what it means for a seed or Series A company hiring its first senior engineers, and the decision I would make in each of the common situations. This is practical planning, not legal advice. Immigration is an area where you want an immigration attorney on the specific case.
What changed in the last few weeks
There are four separate things moving, and founders tend to blur them together.
The fee itself is blocked
Proclamation 10973, signed in September 2025, added a $100,000 payment to H-1B petitions for workers outside the US who would go through consular processing. On June 8, 2026, the federal district court in Massachusetts vacated the policy, finding the fee was effectively a tax the proclamation could not impose. On July 24, 2026, the First Circuit declined to put that ruling on hold during the appeal. As of this writing, the fee cannot be enforced. Fragomen's summary of the First Circuit decision sets out the timeline.
The proclamation was extended anyway
The original proclamation was a 12-month measure due to lapse on September 20, 2026. On September 18 the White House extended it to September 21, 2027. The extension does not override the court order, so the fee stays blocked for now, but it keeps the policy alive while the appeal runs. DiRaimondo and Schroeder explain the extension and the court order together.
A second fee is on a different track
In August, DHS published a proposed rule, "Fee for Certain H-1B Petitions," that would charge roughly $103,000 on cap-subject H-1B petitions, reportedly including some people already in the US. A proposed rule is not in force. But it is a different legal route from the proclamation the court struck down, which means a ruling against the proclamation does not automatically dispose of it.
The lottery already favors higher wage levels
Separately, H-1B cap selection now weights registrations by offered wage level, which improves the odds for senior salaries and cuts them for junior ones. For a startup paying a first engineer at a mid-level wage, the odds of getting a cap number are lower than they were two years ago, fee or no fee.
Why a startup should plan as if the fee could return
Large companies can model the fee as a line item. A seed-stage company cannot. $100,000 is roughly the fully loaded cost of a mid-level engineer for a year in many markets outside the US, and on a $2 million seed it is five percent of the round for one hire's paperwork.
The litigation could land either way. The government can keep appealing, and the proposed rule could become final. If you build a hire plan on the assumption that the fee is gone for good, you are betting part of your runway on a court outcome you do not control. The plan should work in both worlds.
Four situations, four decisions
Most first-engineer immigration questions I see fall into one of these.
The candidate is already in the US on another status
This is the least affected case. The blocked fee applied to people outside the US going through consular processing, not to change-of-status petitions inside the US. If your candidate is, say, finishing a degree on F-1 with work authorization, or already on H-1B with another employer and transferring, the fee was not the main barrier. Timing, the lottery if they are cap-subject, and cost still matter. Talk to an immigration attorney early, because the order of steps matters.
The candidate is abroad and senior
Here the lottery weighting helps you and the fee risk hurts you. Two options usually beat waiting: hire them now as a contractor or through an employer of record in their own country, then revisit sponsorship once the legal picture settles and you have raised again. I covered the trade-offs of that first step in your first engineer does not have to be an employee. The key is to make the contractor arrangement real, with clean IP assignment and fair pay, not a placeholder you are embarrassed by in diligence.
The candidate is abroad and mid-level
This is the hardest case for sponsorship: lower lottery odds, full exposure to any fee that returns. For most startups the honest answer is to hire them where they are and stop treating relocation as the goal. Remote-first hiring for a first engineer has real costs, mainly time-zone overlap and onboarding, but they are costs you can manage. Whether your first engineer should be remote walks through them.
You planned to build the whole early team through sponsorship
If your plan assumed three or four sponsored hires in the next 18 months, redo it now rather than one hire at a time. A mix that works for many seed-stage companies is one senior hire in the US, either already authorized or on a path that does not depend on the fee, plus a small team abroad hired locally. That structure is also easier to explain to investors, which matters more than founders expect. See the engineering hiring plan investors actually read.
What to change in your hiring plan this month
Concretely, I would do four things now.
- Separate the hire from the visa. Decide whether this is the right person first, then decide how and where to employ them. Founders who combine the two tend to either overpay for sponsorship or lose a strong candidate while waiting on a legal answer.
- Budget the fee as a scenario, not a certainty. Put a line in your model for "sponsorship with fee" and "sponsorship without fee" and see whether the hire still makes sense in the worse case. If it only works without the fee, choose the contractor or local-hire route.
- Write the offer so it survives either outcome. Salary, equity, and start date should not depend on the petition route. If you need to adjust pay for location, adjust salary, not equity. Global equity parity covers why.
- Pad the timeline. Even without the fee, sponsorship adds months. If your product plan needs this engineer shipping by a date, count backwards honestly. How long hiring your first engineer should take has a realistic baseline before any immigration steps.
An illustrative example
A composite case: a seed-stage B2B company with two non-technical founders found a strong senior backend engineer in Toronto, then working for a Canadian bank. The original plan was to sponsor an H-1B and move them to New York within six months.
After the June ruling, the founders were tempted to file quickly while the fee was blocked. Their attorney pointed out the cap timing and the open appeal. They changed course: the engineer joined as a Canadian contractor with a proper IP assignment, at a salary set for Toronto and the same equity grant they would have had in New York. Sponsorship went into the Series A plan as an option, not a requirement. The engineer started six weeks later instead of six months, and the product timeline stopped depending on a court.
The details are illustrative. The pattern is common: once the hire is separate from the visa, most of the pressure goes away.
Where outside technical leadership helps
None of this is really an immigration question for the founder. It is a sequencing question: which role you need first, at what seniority, on what timeline, and what that does to runway. Getting that wrong costs more than any fee. If you are working out your first engineering hires and want a second opinion on the plan, book a call. If you want to see what an ongoing engagement looks like, the pricing page lays it out.
FAQ
Do startups have to pay the $100,000 H-1B fee right now?
Not as of late September 2026. A federal court vacated the fee in June, and the First Circuit declined to reinstate it during the appeal. The proclamation has been extended to September 2027, so the situation can change. Check with an immigration attorney before filing.
Does the fee apply to engineers already in the US?
The blocked proclamation fee applied to petitions for workers outside the US needing consular processing, not to change-of-status petitions inside the US. The separate DHS proposed fee is broader and reportedly would cover some cap-subject petitions for people already in the US if it becomes final.
Should I rush to file an H-1B petition while the fee is blocked?
Only on an attorney's advice. Cap timing, the pending appeal, and your candidate's situation all matter more than the window itself. Rushing a petition for a hire you have not properly evaluated is the more expensive mistake.
Is hiring a first engineer abroad as a contractor a diligence risk?
Not if it is done properly: a written contract, clear IP assignment to the company, fair pay, and local tax compliance. It becomes a risk when it is informal or when the person is an employee in all but name.