DHS Announces Major Changes for Student Optional Practical Training

On April 4, 2008, the Department of Homeland Security (DHS) released the text of an "interim final" rule which is expected to be published in the Federal Register on April 7, 2008. The rule will be effective on the date of publication and comments are invited for up to 60 days. The DHS press release on the publication addressed a welcome 17 month extension of Optional Practical Training (OPT) for certain students. However, many employers and foreign nationals may be more interested in the solution for the H-1B "cap gap."

Solution for H-1B Cap Gap

Buried in the 48 page advance copy of the regulations is a development of great significance for those employers who have recently filed H-1B petitions for individuals subject to the annual H-1B quota: a fix for the "cap gap" for some of those foreign students who are the beneficiaries of an H-1B petition but whose EAD cards will expire prior to October 1, 2008. Under the new regulation, F-1 students who have maintained their status and have a valid EAD card will receive an automatic extension of both their "duration of status" and employment authorization until October 1 of the next fiscal year if:

-an H-1B petition and an application for change of status on their behalf was timely filed, and
-the requested start date in the petition is October 1 of the following fiscal year

F-2 dependents are included in the extension of status. The automatic extension of status and employment authorization terminates if the H-1B petition is rejected under the lottery, denied or otherwise revoked.

When an EAD card expires, F-1 students are granted a 60 day grace period to remain in the US. If the student’s EAD card expires on or before August 1, they would be ineligible to apply for a change of status in conjunction with an H-1B petition filed on April 1, 2008. In that event, they have to stop working when their EAD card expires and must also leave the US within 60 days. If their H-1B petition is selected in the lottery and approved, they can apply for an H-1B visa stamp at the US consulate designated in the petition on or after September 20.

Students whose EAD cards expire on or after August 2 but before October 1 would have to stop working on the date the EAD card expires but could remain in the US and start work on October 1 assuming their employer requested a change of status on the H-1B petition filed on April 1.

Had this interim regulation been published prior to April 1, 2008, employers and their F-1 student employees could have planned accordingly and requested a change of status. Based on existing DHS policy as of April 1, 2008, H-1B petitions for those who had the cap gap problem this summer requested consular notification of approval. Under the new regulation, these individuals will not benefit from the liberalized policy and will have to stop work when their EAD expires and leave the US when their grace period expires because they did not (and could not as of April 1) also request a change of status. Hopefully, DHS will recognize the fundamental unfairness of this result and issue amended policy guidance to cover this group of affected workers. The American Immigration Lawyers Association will be in communication with DHS about this and several other technical defects and omissions in the newly published regulation.


17 Month Extension of OPT for Certain Highly Skilled Foreign Students

The new rule also extends the period of OPT from 12 to 29 months for certain F-1 students who meet the following requirements:

-Currently participating in a 12 month period of OPT
-Properly maintaining student status
-Have successfully completed a degree in science, technology, engineering or mathematics (STEM) included in the DHS STEM Designated Degree Program List from a certified college or university program
-Be working for a US employer in a job directly related to the student’s major area of study
-Be working for or have accepted employment with an employer enrolled in the USCIS E-Verify employment verification system.

STEM degrees include the following: Actuarial Science, Computer Science, Engineering, Engineering Technologies, Biological and Biomedical Sciences, Mathematics and Statistics, Military Technologies, Physical Sciences, Science Technologies, and Medical Scientist.

Please note that this will be a two-stage process. Graduating students will obtain their 12 month OPT and thereafter will be eligible to apply for the 17 month extension of status assuming the criteria listed above are satisfied. The new rule contains detailed reporting and application requirements for F-1 students as well as an automatic 180 day extension of employment authorization while the EAD application for the 17 month extension is pending. Employers are required to notify the Designated School Official (DSO) at the college or university where the employee graduated within 48 hours of the employee’s termination of employment. No F-1 student will be able to apply for this 17 month extension until the I-765 EAD application form is revised, the SEVIS computer tracking system for students is updated, and instructions are published for use by DSOs.

The most disturbing aspect of an otherwise enlightened policy change is the requirement that employers who seek this benefit must enroll in the DHS E-Verify employment verification system. This program, formerly known as "Basic Pilot," is an online system used by less than 1% of all US employers. It interfaces with highly flawed Social Security databases. Approximately 1/3 of the employers currently enrolled in the system are located in Arizona where participation has been mandated by a state law currently being challenged in federal court.

Whether or not to participate in E-Verify is a major policy decision by most corporations that would require participation and sign-off by senior management, legal and human resource personnel. The E-Verify system requires completion of a paper I-9 and then entry of all required data online, thereby adding to the workload of human resources personnel responsible for this function. The system’s interface is not considered to be user friendly and has been plagued by instability during periods of peak use. Many participating employers have elected to use an authorized Designated Agent to be the electronic interface with E-Verify. The online systems offered by the Designated Agents offer a more efficient and friendlier user experience but do come with a cost. Either choice has budgetary and policy implications for employers.

Given the time frame for a corporate decision on, and enrollment in, E-Verify, it is unlikely that many of the F-1 students will qualify for this 17 month extension by June or July of 2008 when many EAD cards will expire.

PLEASE NOTE: Illinois state law prohibits employers from participating in E-Verify until that system attains certain performance benchmarks. DHS has filed a lawsuit against the State of Illinois concerning the legislation and the case is currently pending in federal district court. The prohibition only applies to employees working in the State of Illinois. Therefore, an employer could enroll in E-Verify and participate in the system for all worksites outside Illinois or even for a designated list of worksites if it does not want to participate on a company wide basis.

Employers who would like a detailed consultation on the pros and cons of enrolling in E-Verify should contact either Paul Zulkie or Susan MacLean to schedule a time to speak.

We will provide our clients with updates on this important subject as they occur.