Customs and Border Protection (CBP) published a proposed rule that will substantially increase the fees for certain H-1B and L-1 petitions. The agency plans to clarify that the 9-11 Response and Biometric Entry-Exit Fee (9-11 Fee) applies to initial filings and to all extensions for employers with at least 50 employees of whom at least 50% are in H or L status.

Currently, the fee is required only for initial and change-of-employer petitions. Under the proposed rule, for covered employers, all H and L petitions (other than amendments without extensions) will cost an additional $4,000 or $4,500 respectively. DHS believes the proposed changes will clarify ambiguous statutory language while helping to comply with its congressional mandate to implement a biometric entry-exit data system.

When first instituted in 2010, the agencies involved took the position that the additional fee applied only where the USCIS $500 Fraud Fee was required. In other words, it was obligatory only for initial petitions for covered employers. Interpreted in that way, the 9-11 Fee applied only to about 29% of cases for covered employers. With the new interpretation, the 9-11 Fee is estimated to apply to 89% of those cases.

The 9-11 Fee was instituted by Congress to financially support and improve the biometric entry-exit data system to increase national security. The system matches travelers to travel documents and, since 2018, has identified close to 2,000 imposters and more than 300,000 overstays. CBP believes that this sort of security effort helps the travel industry not only be streamlining processes but by restoring consumer confidence in the system. Significantly, the system lacks funding. The CBP’s new interpretation of the 9-11 Fee will add quite a bit of money to the fund supporting the biometric system. CBP forecasts that the 9-11 Fees collected for H-1Bs will increase funding from $68 million to $129 million annually, and that the L-1 9-11 Fees will increase funding from $42 million to $157 million annually. Importantly, the question is whether the fee increase will substantially reduce the number of petitions filed.

CBP accepted comments through July 8, 2024. As of just before the July 4th holiday, about 74 comments had been submitted. Most comments focus on how this new interpretation will burden employers and will lead to a reduction in H-1B and L-1 filings at a time when companies need more highly skilled workers.

The final rule is expected sometime in July. Jackson Lewis attorneys are available to assist employers develop possible strategies to avoid these higher fees – such as possibly using other visa categories – and will provide updates as they become available.