OAKLAND, Calif. — President Donald Trump lacks Congressional authority to levy new taxes and fees, claimed attorneys who are seeking to reverse a $100,000 fee on employers of new H-1B visa holders from abroad.
The White House announced the new fee as part of a Sep. 19 executive order claiming the H-1B program had been “deliberatively exploited” to harm American workers.
Tech workers and physicians, primarily from India and China, receive roughly 75% of the 85,000 new H-1B visas issued each year. An additional 20,000 H-1B visas are allotted to foreign students who earn advanced technical degrees in the US. Currently, Cognizant and Tata Consultancy Services gobble up the lion’s share of H-1Bs, and then contract their workers out to other companies.
But the plaintiffs in a new lawsuit — Global Nurse Force et al vs. Trump et al — are primarily foreign nurses and teachers who comprise 10% of the H-1B workforce.
Unions Lead the Fight
Four California-based unions serve as plaintiffs in the suit: the UAW International, along with its local union, the UAW 4811; the Service Employees International Union-AFL-CIO, which includes the Committee of Interns and Residents; and the American Association of University Professors.
In an earlier interview, Kalpana Peddibhotla, founder of the South Asian American Justice Collaborative, told American Community Media that unions joined the fight because they realized the impact of the higher fee on their workers.
“Many of their members include people who would benefit from the H-1B program. Their careers would be at jeopardy and the institutions that rely upon them would have experienced significant harm. Ultimately, we as America would lose,” said Peddibhotla.
”These are people who have agreed to go to our medically underserved areas or health practitioner shortage areas where there’s a real significant need for doctors,” she said.
Several medical associations have urged the president to create an exemption for physicians. They note that H-1B doctors fill critical staffing shortages, but rural hospitals cannot afford the $100,000 fee to hire them. An exemption has not yet been granted.
Hundreds of rural hospitals and clinics across the country are already grappling with severe funding shortages stemming from cuts to Medicaid as part of the Republican’s 2025 spending package.
The lawsuit was filed by several civil rights organizations including the Justice Action Center, Democracy Now, IMMPACT, and SAAJCO. It notes that nurses and teachers from abroad are filling critical employment gaps. Employers cannot pay $100,000 to hire a teacher, notes the lawsuit. That amount is equivalent to 2 years of a teacher’s salary.
Trump’s Overreach
At a Feb. 26 hearing at the US District Court for the Northern District of California, attorneys for the plaintiffs argued that Trump had overreached his authority in issuing his Sept. 19 executive order.
”Only Congress has the power to reach into the pocketbooks of Americans,” said Justice Action Center attorney Esther Sung. “Congress has defined the contours of the H-1B program several times. It has made several attempts to recalibrate the program. This new $100,000 fee sweeps all of that away,” she said.
“The Supreme Court has reiterated that when Congress is going to delegate discretionary authority to the executive to impose monetary assessments of any kind, it has to do so clearly,” said Sung.
Tariffs
The Supreme Court’s recent ruling striking down Trump’s new tariffs plan set the limits of presidential executive authority, said Sung. In its Feb. 20 6-3 ruling on the Learning Resources via Trump case, the majority opinion stated that the Constitution gives taxing powers solely to Congress.
In a separate ruling, a federal judge on March 4 cleared the way for US businesses to collect refunds on previous Trump tariffs, totaling some $130 to $175 billion.
In an interview after the Feb. 26 court hearing, Sung told American Community Media: “In the tariffs case, the Supreme Court considered whether the president does have the unilateral power to impose tariffs on any amount at will.”
“The justices found that the president does not in fact have that power because Congress had not given him that power. And so similarly here we’re arguing that the president does not have the power to unilaterally impose any kind of payment requirement in connection with H-1B visa or any other kind of visa or entry to the United States because Congress didn’t give him that power in the statute,” said Sung.
Few Have Paid
Justice Department attorney Tiberius Davis challenged Sung in court, saying Trump’s Sept. 19 executive order has raised no significant revenue thus far. Therefore, it is not a new tax or fee, he said.
In the 5 months since Trump issued his executive order, only 70 employers have paid the $100,000 fee for new H-1B workers from abroad. The fee does not apply to H-1B renewals, nor does it apply to H-1B workers who are already in the US.
The two attorneys discussed whether Trump’s actions imposed a tax or a fee. Sung said it did not matter, as Trump does not have the authority to impose a new tax or fee.
US District Court Judge Haywood Gilliam Jr asked for a separate hearing on how the Supreme Court’s ruling on tariffs applies to this case. He did not grant a preliminary injunction requested by the plaintiffs. But he also did not grant a stay requested by the Justice Department.
Gilliam said he wanted to hear the outcome of a separate case, the Chamber of Commerce’s lawsuit against the Department of Homeland Security. A lower court in that case upheld Trump’s new $100,000 fee. But the Chamber of Commerce has appealed. The case is scheduled to be heard in the District Court of Columbia on March 9.
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