California and a coalition of other states are suing the Trump administration over a policy charging employers $100,000 for each new H-1B visa they request for foreign employees to work in the U.S. — calling it a threat not only to major industry but also to public education and healthcare services.

“As the world’s fourth largest economy, California knows that when skilled talent from around the world joins our workforce, it drives our state forward,” said California Atty. Gen. Rob Bonta, who announced the litigation Friday.

President Trump imposed the fee through a Sept. 19 proclamation, in which he said the H-1B visa program — designed to provide U.S. employers with skilled workers in science, technology, engineering, math and other advanced fields — has been “deliberately exploited to replace, rather than supplement, American workers with lower-paid, lower-skilled labor.”

Trump said the program also created a “national security threat by discouraging Americans from pursuing careers in science and technology, risking American leadership in these fields.”

Bonta said such claims are baseless, and that the imposition of such fees is unlawful because it runs counter to the intent of Congress in creating the program and exceeds the president’s authority. He said Congress has included significant safeguards to prevent abuses, and that the new fee structure undermines the program’s purpose.

“President Trump’s illegal $100,000 H-1B visa fee creates unnecessary — and illegal — financial burdens on California public employers and other providers of vital services, exacerbating labor shortages in key sectors,” Bonta said in a statement. “The Trump Administration thinks it can raise costs on a whim, but the law says otherwise.”

Taylor Rogers, a White House spokeswoman, said Friday that the fee was “a necessary, initial, incremental step towards necessary reforms” that were lawful and in line with the president’s promise to “put American workers first.”

Attorneys for the administration previously defended the fee in response to a separate lawsuit brought by the U.S. Chamber of Commerce and the Assn. of American Universities, arguing earlier this month that the president has “extraordinarily broad discretion to suspend the entry of aliens whenever he finds their admission ‘detrimental to the interests of the United States,’” or to adopt “reasonable rules, regulations, and orders” related to their entry.

“The Supreme Court has repeatedly confirmed that this authority is ‘sweeping,’ subject only to the requirement that the President identify a class of aliens and articulate a facially legitimate reason for their exclusion,” the administration’s attorneys wrote.

They alleged that the H-1B program has been “ruthlessly and shamelessly exploited by bad actors,” and wrote that the plaintiffs were asking the court “to disregard the President’s inherent authority to restrict the entry of aliens into the country and override his judgment,” which they said it cannot legally do.

Trump’s announcement of the new fee alarmed many existing visa holders and badly rattled industries that are heavily reliant on such visas, including tech companies trying to compete for the world’s best talent in the global race to ramp up their AI capabilities. Thousands of companies in California have applied for H-1B visas this year, and tens of thousands have been granted to them.

Trump’s adoption of the fees is seen as part of his much broader effort to restrict immigration into the U.S. in nearly all its forms. However, he is far from alone in criticizing the H-1B program as a problematic pipeline.

Critics of the program have for years documented examples of employers using it to replace American workers with cheaper foreign workers, as Trump has suggested, and questioned whether the country truly has a shortage of certain types of workers — including tech workers.

There have also been allegations of employers, who control the visas, abusing workers and using the threat of deportation to deter complaints — among the reasons some on the political left have also been critical of the program.

“Not only is this program disastrous for American workers, it can be very harmful to guest workers as well, who are often locked into lower-paying jobs and can have their visas taken away from them by their corporate bosses if they complain about dangerous, unfair or illegal working conditions,” Sen. Bernie Sanders (I-Vt.) wrote in a Fox News opinion column in January.

In the Chamber of Commerce case, attorneys for the administration wrote that companies in the U.S. “have at times laid off thousands of American workers while simultaneously hiring thousands of H-1B workers,” sometimes even forcing the American workers “to train their H-1B replacements” before they leave.

They have done so, the attorneys wrote, even as unemployment among recent U.S. college graduates in STEM fields has increased.

“Employing H-1B workers in entry-level positions at discounted rates undercuts American worker wages and opportunities, and is antithetical to the purpose of the H-1B program, which is ‘to fill jobs for which highly skilled and educated American workers are unavailable,’” the administration’s attorneys wrote.

By contrast, the states’ lawsuit stresses the shortfalls in the American workforce in key industries, and defends the program by citing its existing limits. The legal action notes that employers must certify to the government that their hiring of visa workers will not negatively affect American wages or working conditions. Congress also has set a cap on the number of visa holders that any individual employer may hire.

Bonta’s office said educators account for the third-largest occupation group in the program, with nearly 30,000 educators with H-1B visas helping thousands of institutions fill a national teacher shortage that saw nearly three-quarters of U.S. school districts report difficulty filling positions in the 2024-2025 school year.

Schools, universities and colleges — largely public or nonprofit — cannot afford to pay $100,000 per visa, Bonta’s office said.

In addition, some 17,000 healthcare workers with H-1B visas — half of them physicians and surgeons — are helping to backfill a massive shortfall in trained medical staff in the U.S., including by working as doctors and nurses in low-income and rural neighborhoods, Bonta’s office said.

“In California, access to specialists and primary care providers in rural areas is already extremely limited and is projected to worsen as physicians retire and these communities struggle to attract new doctors,” it said. “As a result of the fee, these institutions will be forced to operate with inadequate staffing or divert funding away from other important programs to cover expenses.”

Bonta’s office said that prior to the imposition of the new fee, employers could expect to pay between $960 and $7,595 in “regulatory and statutory fees” per H-1B visa, based on the actual cost to the government of processing the request and document, as intended by Congress.

The Trump administration, Bonta’s office said, issued the new fee without going through legally required processes for collecting outside input first, and “without considering the full range of impacts — especially on the provision of the critical services by government and nonprofit entities.”

The arguments echo findings by a judge in a separate case years ago, after Trump tried to restrict many such visas in his first term. A judge in that case — brought by the U.S. Chamber of Commerce, the National Assn. of Manufacturers and others — found that Congress, not the president, had the authority to change the terms of the visas, and that the Trump administration had not evaluated the potential impacts of such a change before implementing it, as required by law.

The case became moot after President Biden decided not to renew the restrictions in 2021, a move which tech companies considered a win.

Joining in the lawsuit — California’s 49th against the Trump administration in the last year alone — are Arizona, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maryland, Massachusetts, Michigan, Minnesota, North Carolina, New Jersey, New York, Oregon, Rhode Island, Vermont, Washington and Wisconsin.