F-1 Student Visa Optional Practical Training Cap-Gap/STEM Extension Rule Announced by Department of Homeland Security

On April 4, 2008, the U.S. Department of Homeland Security (DHS) announced its intent to release an interim final rule that would affect F-1 students’ Optional Practical Training (OPT) in two significant ways:

• Addresses the “cap-gap” problem where an F-1 student’s status and employment authorization expire before he or she can obtain H-1B authorization (i.e., on October 1.)  The interim final rule addresses this issue by automatically extending the period of stay and employment authorization of F-1 students with pending H-1B petitions (see below for more information).
• Extends the OPT period from 12 to 29 months for certain F-1 non-immigrant students. The extension will be available to F-1 students with a degree in science, technology, engineering, or mathematics who are employed by businesses enrolled in the E-Verify program.

The rule will become effective upon publication in the Federal Register, which is expected to occur within the next few days.  The rule appears to be a positive development for employers as it provides methods which reduce the odds of gaps in employment authorization for F-1 students.  However, as discussed below, there are still unanswered questions that may affect the ability to immediately take advantage of these provisions.

What Employers Need to Know

• If you filed an H-1B cap-gap petition for an F-1 student during the first week of April 2008, there may be an opportunity to avoid a gap in employment authorization between the end of the F-1 student’s OPT employment authorization and the expected October 1 H-1B start date.  F-1 students may also be able to avoid a trip outside the U.S. to apply for an H-1B visa before October 1.
• If you filed a cap-subject H-1B petition and that petition is not accepted for processing or you missed the filing deadline for this year’s H-1B cap, F-1 students who hold OPT authorization based upon their recent graduation with STEM degrees (science, technology, engineering, and mathematics) may be able to receive an extension of OPT for an additional 17 months.
• If you are considering hiring a graduating F-1, you will have a better chance of avoiding future gaps in employment caused by the H-1B cap.
• It will likely take a few days or weeks and potentially require additional action by U.S. Citizenship and Immigration Services (USCIS) or additional regulations to determine exactly how this rule can be implemented to help current F-1 students and employers that have filed  H-1B petitions on their behalf.

Addressing the Cap-Gap

Defining the “cap-gap” problem.  F-1 students commonly obtain OPT for 12 months following completion of studies.  As most students graduate in May, OPT commonly runs from May to May or June to June.  Employers that wish to continue the employment of F-1 OPT students typically seek to change their status to H-1B.  Because of the Congressionally-mandated annual cap on new H-1Bs (65,000 generally, not including 20,000 H-1Bs available to those with advanced degrees from U.S. universities) and the timing of the annual allocation, the earliest date the F-1 student can commence H-1B employment is October 1.  As a result, F-1 students who are the beneficiaries of approved H-1B petitions, but whose periods of authorized stay (including authorized periods of post-completion OPT and the subsequent 60-day departure preparation period) expire before October 1, must leave the United States, apply for an H-1B visa at a consular post abroad, and then seek readmission to the United States in H-1B status.

The new solution.  The DHS’ interim rule purports to address the cap-gap by extending the authorized period of stay and work authorization of any F-1 student who is the beneficiary of a timely-filed H-1B petition (with an October 1 start date) that has been granted by, or remains pending with, USCIS.  This automatic extension will terminate upon rejection, denial or revocation of the H-1B petition. 

One point of confusion is created by the new rule: the regulation indicates that the automatic extension applies to “an F-1 student who is the beneficiary of an H-1B petition and request for a change of status . . . .”   H-1B cap-gap petitions filed during the first week of April 2008 for an effective date of October 1 likely did not request a change of status to H-1B.  Instead such petitions probably indicated that the F-1 student would depart the U.S., apply for an H-1B visa at a U.S. Consulate abroad, and then seek readmission on or about October 1.  While there has been no specific guidance from DHS, one would hope that DHS will apply the automatic extension to ALL H-1B cap-gap petitions, without regard to whether a change of status was requested in the H-1B petition.  To do otherwise (employing a technical and mechanical reading of the regulation) would seemingly defeat the ameliorative goals of this regulation and punish employers that acted appropriately.  The DHS press release and the preamble to the interim rule refer to the extension as applying to ALL cap-gap petitions, suggesting DHS intended the more generous interpretation.  Hopefully, DHS will provide a clarification soon.
 
17-Month STEM Extension

Overview of the new rule.  Certain F-1 students participating in approved post-completion OPT can now apply for a 17-month extension for a maximum of 29 months of post-completion OPT.  To qualify for the 17-month extension, an F-1 student must:

• Have completed a designated STEM degree (science, technology, engineering, and mathematics) from a U.S. college or university;
• Be working for a U.S. employer in a job directly related to the student’s field of study; and
• Be working for, or accepted employment with, an employer enrolled in the E-Verify program. (E-Verify is USCIS’ internet-based employment eligibility verification system.)

For the most part, eligibility for the 17-month STEM extension is relatively straightforward.  Perhaps the biggest hurdle will be whether an employer is a registered participant in E-Verify. 

What are the eligible STEM degrees?  To be eligible for the 17-month OPT extension, a student must have received a degree in one of the following fields:  Computer Science Applications, Life Sciences, Actuarial Science, Mathematics, Engineering, Military Technologies, Engineering Technologies, and Physical Sciences.  USCIS has indicated that the STEM degree list will be maintained at http://www.ice.gov/sevis.

Mechanics of the STEM extension.  The basic process will be:

• An F-1 student must seek a recommendation and receive a signed Form I-20 from his or her designated school official (DSO) before submitting Form I-765, Application for Employment Authorization, with fee to USCIS.  (Note: USCIS will be revising Form I-765 to accommodate processing of STEM OPT extension requests.)
• If filed before expiration of the F-1’s 12-month OPT period, the F-1 student’s employment authorization will be extended for up to 180 days while the I-765 remains pending.  (Note: In an FAQ posted to the USCIS website, it was indicated that the extension request must be made 90 days prior to the expiration of the existing post-completion OPT.  However, this requirement was not listed in the interim rule itself.)
• Upon receipt of the I-765, USCIS will verify the F-1 student’s overall eligibility, including confirming the employer’s participation in E-Verify.

Some additional nuances of the rule:

• Employers must agree to report the departure or termination of an OPT employee to the DSO within 48 hours of the event;

• F-1 students must report any change of name, address, and any employment interruptions during the usual 12-month, post-completion OPT; and
• During the 17-month STEM extensions, F-1 students must make a validation report every six months and report changes in name, residential or mailing address, employer name, employer address, and/or loss of employment within 10 days of the change.

Conclusion

Overall, this new regulation is a positive for employers.  It provides a greater opportunity for employers to recruit and retain talented graduates for a longer period of time and also reduces the odds of disruptions in employment authorization caused by the H-1B cap – the so-called “cap-gap” problem. 

However, there are some issues and uncertainties that remain.  For example, the 17-month extension of OPT only applies to STEM graduates, leaving MBAs and other talented graduates limited to the traditional 12-month period of OPT.  In addition, employers must agree to participate in E-Verify to be able to employ STEM graduates for the additional 17 months of OPT.  As for the automatic extension of employment authorization for “cap-gap” cases, one important limitation is that the H-1B petition must be accepted for processing under the H-1B cap. 

There will be a great amount of uncertainty over the next few weeks as USCIS attempts to implement these new benefits.  The I-765 form still needs to be revised and USCIS must clarify how pending beneficiaries of H-1B cap-gap petitions will be able to take advantage of the automatic extension, even if a request for change of status was not made on the previously filed H-1B petition.  Employers will need to “stay tuned” over the next several weeks as these issues are clarified.

Additional Information 

Visit http://www.dhs.gov/xnews/releases/pr_1207334008610.shtm for the DHS press release and the Interim Final Rule and visit http://www.uscis.gov/files/article/OPT_FAQ_4apr08.pdf for the USCIS FAQ.  For more specific assistance with this or other immigration issues, please contact any attorney in our Immigration Practice Group or contact our Client Services Department at 866-287-2576 or via e-mail at clientservices@ogletreedeakins.com.

Note: This article was published in the April 10, 2008 issue of the Immigration eAuthority.