President Donald Trump speaks before signing executive orders in the Oval Office at the White House on September 19, 2025 in Washington, DC.

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A federal judge on Monday vacated President Donald Trump's policy imposing a $100,000 fee for employers' H-1B visa applications.

The visa payment policy violated the federal Administrative Procedure Act and the Constitution, Judge Leo Sorokin declared in the ruling in U.S. District Court in Massachusetts.

Sorokin agreed with the 20 states that brought the suit in finding "the substance and application of the $100,000 payment reveal that it is a tax" and that Congress had not delegated that power to the executive branch.

The Trump administration said it would appeal the ruling.

The H-1B policy was created in 1990 and is heavily used by U.S. tech giants to bring in high-skilled workers from overseas. The program allows U.S. employers to seek government permission to hire nonimmigrant workers in specialty occupations for up to six years.

Trump implemented the $100,000 fee in a presidential proclamation last September in order to restrict the program, arguing that misuse of the policy has undermined American economic and national security through the "large-scale replacement of American workers."

Prior to the change, H-1B visa fees had ranged from $2,000 to $5,000 per application, CNBC previously reported.

White House spokeswoman Taylor Rogers told CNBC in a statement after Monday's ruling, "President Trump has clear legal authority to restrict entry of any class of aliens he determines is not in America's best interests, and that is exactly what he did."

"The H-1B program has been abused for decades, and President Trump finally took action to fix it. A federal judge in Washington already upheld a nearly identical order, and the Administration is confident this order will be reversed on appeal," Rogers said.

The lawsuit was filed in December against the Trump administration and a number of top officials. The U.S. Chamber of Commerce in October filed its own lawsuit challenging the $100,000 H-1B visa policy.