A coalition of unions, nonprofits, religious organizations, and a healthcare staffing firm, among others, is suing the Trump administration over its $100,000 H-1B visa fee, marking what appears to be the first major legal challenge against the proclamation to land in federal court.
In a lawsuit filed on Friday in the US District Court in Northern California, plaintiffs said President Donald Trump doesn’t have the authority to “unilaterally impose fees,” calling it “extortionate,” “draconian,” and an impediment to innovation.
“Most fundamentally, the President has no authority to unilaterally impose fees, taxes or other mechanisms to generate revenue for the United States, nor to dictate how those funds are spent,” the lawsuit said. “The Constitution assigns the ‘power of the purse’ to Congress, as one of its most fundamental premises.”
The lawsuit further argued that Trump framed the fee as a tax, considering what he said he’d do with the funds raised from the $100,000 requirement.
On September 19, Trump told reporters, “We’re going to take that money and we’re going to reduce taxes, we’re going to reduce debt.”
The suit, led by a California-based healthcare recruiting firm called Global Nurse Force, is asking a federal court to declare Trump’s proclamation unlawful and to prevent the government from enforcing the fee.
The H-1B visa program has long served as a pipeline for skilled foreign workers to enter the United States legally. Over the years, the tech and research fields have become among the top industries that utilize H-1B visa workers.
However, the program has also been critical for manufacturing, health care, and education, among other industries. The lawsuit said that while many H-1B workers are in tech, “more than a third of all H-1B workers are in other fields.” Notably, the coalition of plaintiffs does not appear to include any tech-related organizations or representatives.
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In implementing a $100,000 fee, Trump said the move seeks to discourage employers and companies from exploiting the program to replace American workers.
White House spokesperson Abigail Jackson told Business Insider in an email that the administration’s actions “are lawful” and that the new requirement will stop companies from “spamming the system and driving down American wages, while providing certainty to employers who need to bring the best talent from overseas.”
The introduction of the fee nearly two weeks ago initially sowed chaos and confusion in Silicon Valley, as employers rushed to warn any of their H-1B workers who were overseas at the time to return to the US immediately.
As more details trickled in, some major tech CEOs, including Nvidia CEO Jensen Huang, appeared to warm to the idea.
“Immigration is really important to our company and is really important to our nation’s future, and I’m glad to see President Trump making the moves he’s making,” Huang said in an interview with CNBC.
Attorneys for the plaintiffs did not immediately respond to a request for comment.