New STEM Extension Regulations For Foreign Students: A Good Alternative to the H-1B that also Carries a Hefty Burden for U.S. Employers

The H-1B season is over, which means that the more than 100,000 foreign nationals who did not get a chance at one of the coveted professional work visas have to now determine what alternatives may be available. Many foreign students in F-1 status may be eligible for a good alternative with some recently passed regulations. As with everything, however, the good here is accompanied by some bad.

The new regulations are related to F-1 foreign students with STEM (Science, Technology, Engineering, or Mathematics) degrees and set forth the criteria to extend Optional Practical Training (OPT) work authorization. The regulations are set to take effect on May 10, 2016. While this is a positive change implemented by the U.S. Department of Homeland Security (DHS) in that it may help to alleviate the drastic consequences of the annual H-1B cap, the new regulations come with a price and, in this case, that price takes the form of an increased burden on U.S. employers.

The new final regulations, published at 81 Federal Register 13040 (March 11, 2016), expand the STEM extension for OPT work authorization to 24 months. This allows foreign students who have graduated from accredited U.S. colleges or universities with STEM degrees to obtain OPT for the usual 12 month post-graduate period, and to subsequently apply for an additional 24 months of OPT work authorization.

Prior regulations allowed for a 17 month OPT extension for STEM degree students. This 17 month extension carried one major requirement for the students' U.S. employers – to enroll in and be considered an employer in good standing in the E-verify program, an online system that helps verify employees' identity and ability to lawfully accept employment in the United States.

Under the new regulations, the requirement for E-verify enrollment still exists. However, employers also are now subject to several more requirements in exchange for the longer 24 month STEM extension.

For example, employers are now required to collaborate with the students to draft and implement a formal training plan for the extended period of employment, which is prepared and submitted to the school on new DHS Form I-983. The form, which must be presented to the appropriate school officials prior to students being able to file an application for the OPT extension, requires employers to set forth the objectives of the OPT work assignment and to describe the ways in which the students will achieve their goals for learning specific skills, knowledge, and techniques. Form I-983 also requires employers to specify an evaluation process, which includes a description of the oversight and supervision to which the students will be subject during the employment.

Additionally, Form I-983 requires employers to attest to several STEM extension criteria. Employers must attest that they possess enough resources and knowledgeable personnel to properly train the students. The form requires employers to attest that the work assignment is commensurate with similarly situated U.S. employees, including issues related to duties, hours, and compensation. Employers also must attest to the fact that the students will not replace U.S. workers, and that the work assignment is directly related to the students' STEM degree program. Employers are further required to report any materials changes in the students' employment to the school officials within 5 business days. Material changes may include changes to the job duties, location(s) where work is performed, or adjustments to wages.

Since enforcement of U.S. immigration law is always of central concern to the government, the new regulations also allow for worksite visits. United States Immigration and Customs Enforcement officers will be permitted to visit STEM employee worksites to ensure compliance. Advance notification is required, except in the event where a complaint has been lodged or the government possesses other information of non-compliance.

While these new regulations are a positive for the STEM degree students and offer a temporary alternative to the H-1B visa, they also represent major changes with respect to the way in which U.S. employers must now approach the hiring of foreign students who plan to seek STEM extensions. Employers must be well aware of the regulatory requirements and ensure that Human Resource personnel are sufficiently trained in these new rules. The Immigration team at Barclay Damon is prepared to assist our clients with these matters and to help employers become well versed in the new STEM OPT regulations.