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Large technology employers appear pleased as punch with the new DHS final rule published in the Federal Register of March 11, 2016 authorizing an extension of up to 24 months of optional practical training for F-1 student visa holders with STEM degrees.  As finalized, the new rule provides insurance  against the loss of an F-1 STEM student’s services should his or her  employer’s H-1B sponsorship petition fail to be drawn in the annual H-1B lottery.   The availability of the STEM OPT 24-month extension buys not only continuing employment authorization but the opportunity to participate in two more future H-1B lottery drawings.  It may also provide sufficient time, depending on the circumstances, to sponsor the worker for permanent resident status.  

Given the benefits, large technology employers are not so concerned with the new conditions contained in the STEM OPT extension rule.   Small and mid-size employers who previously offered employment to F-1 STEM students may take a different view when they review the requirements and discover that they are required to sign a DHS form under penalty of perjury committing themselves to provide the student with a formal, structured job training opportunity and to provide higher wages and greater benefits than they had prior to the new rule — subject to oversight and enforcement by  the U.S. Immigration and Custom Enforcement Branch.  

The following provides an executive summary of the Employer eligibility and attestation requirements under the new OPT STEM extension rule:

1. An employer must be signatory to the E-Verify Memorandum of Understanding (MOU) and must be an active participant in good standing in the E-Verify employment verification program.  The failure to actively participate in E-Verify notwithstanding enrollment may render the Employer ineligible to begin or to continue to employ an F-1 worker in extended STEM OPT status.

2. An employer must have agreed to provide an F-1 STEM OPT extension worker with job training training opportunity directly related to the worker’s qualifying STEM degree.  The F-1 worker and the employer must agree to the terms of a formalized training plan that specifies the training goals and objectives to be achieved over the term of the STEM OPT extension period, including the knowledge, skills or techniques to be imparted to the worker and the methods by which such learning will be imparted on the job  The training plan must also describe the performance evaluation process to be utilized in evaluating the F-1 worker’s progress toward the stated goals and  the methods of oversight and supervision that will be provided by the employer.   The training must take place at a work location controlled by the employer.  For that and other reasons, DHS has indicated that staffing industry employers would not qualify to employ F-1 STEM graduates during the 24-month OPT extension.  

3. An employer must attest that its F-1 STEM extension worker(s) will not replace a full- or part time, temporary or permanent U.S. worker.

4. An employer must agree to offer its F-1 STEM worker(s) terms and conditions of employment — including duties, hours, and compensation — commensurate with the terms and conditions applicable to the employer’s similarly situated U.S. workers.  If an employer does not employ and has not recently employed more than two similarly situated U.S. workers in the area of employment where the F-1 worker will be employed, then such an employer must offer F-1 STEM extension worker(s) the terms and conditions applicable to other similarly situated U.S. workers in the area of employment.  DHS has defined the term “similarly situated U.S. workers” to mean workers with similar job duties, educational backgrounds, employment responsibilities and skill sets.  The U.S. Department of Labor (DOL) maintains an on-line wage library reporting the area prevailing wages and working conditions in all standardized occupational classifications.   Based on reported DOL wage data for FY 2014-2015, DHS calculated the weighted average hourly rate for STEM workers to be $26.06 as of March 2016.  An employer must report the wages and benefits offered to an F-1 STEM worker in DHS Form I-893, Employer Employee Training and Monitoring Plan, and must guarantee that the worker will be paid for at least 20 hours per week.

5. The training conducted by the employer pursuant to the plan must be in compliance with all applicable Federal and State requirements relating to employment — including but not limited to overtime and equal employment opportunity laws.  As such, Employer must make the same job training opportunities offered to F-1 STEM workers to similarly situated U.S. workers and failure to do so could expose the employer to discrimination claims based on citizenship and national origin status, investigation by the U.S. Department of Justice Office of Immigration Related Discrimination or the U.S. Equal Employment Opportunity Commission, and liability for economic and compensatory damages, attorneys fees, and injunctive relief.

6.  An employer must agree to notify the Designated Student Official at the F-1 STEM worker’s college or university of any material change in terms of the approved Form I-893 Training and Monitoring Plan within 48 hours of such change.

7. An employer must agree to grant ICE access to its place of business for the purpose of conducting a compliance audit within 48 hours of an ICE notice of inspection, and immediate access if it is the target of a complaint alleging a violation of the F-1 STEM OPT extension regulations.

If the foregoing conditions strike you as extremely broad and burdensome, you are not alone.  Indeed small and mid-size employers may find themselves squeezed out of the competition for F-1 STEM graduates because they cannot afford to comply with the new requirements.  On the other hand, H-1B sponsorship does not come cheap. On balance, after considering all the risks and benefits, smaller employers may conclude that the required investment to keep employing an F-1 STEM student in OPT status is worth the cost and risk involved.

The new extension rule takes effect May 10, 2016. If you currently employ F-1 STEM OPT workers, undoubtedly you will be approached about signing Form I-893.   Before agreeing to do so, consult your own employment and immigration compliance counsel about the risks and benefits to ensure that your rights and interests as an employer are adequately protected and that you are prepared to make necessary adjustments in your training, compensation, and benefit plans.

Pivec & Associates, PLLC, offers a full range of employment-related immigration compliance services for Employers and can assist you with questions about the new STEM OPT extension rule and related compliance requirements.