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March 21, 2016

New STEM OPT Regulation To Take Effect in May 2016 Extending Training Period and Increasing Oversight

On March 11, 2016, the Department of Homeland Security (DHS) published a final rule amending its regulations on optional practical training (OPT) to provide an extended period of available employment authorization for certain F-1 students with degrees in science, technology, engineering, or mathematics (STEM) from a U.S. institution of higher education.

While all F-1 graduates can obtain OPT for 12 months, the new rule effectively extends the total available time period of employment authorization for STEM graduates from 29 months to 36 months. The regulation provides for increased oversight over STEM OPT extensions by, among other things, requiring that employers implement formal training, provide wage and other protections, permitting extensions only to those students with degrees from accredited schools, and allowing the possibility of employer site visits. The rule also defines which fields of study may serve as the basis for a STEM OPT extension.

Under the 2008 interim rule, F-1 students who graduated with a STEM degree were eligible for an additional 17-month training period for a total of 29 months of OPT. See 73 FR 18944 (Apr. 8, 2008). On August 12, 2015, the U.S. District Court for the District of Columbia invalidated the 2008 interim rule because it found that the DHS violated the "notice and comment" period required for proper promulgation of regulations as per the Administrative Procedure Act. The Court granted DHS until May 10, 2016 to correct the procedural deficiencies.

Under the new rule, the E-Verify participation and reporting requirements are unchanged, requiring STEM OPT employers to participate in E-Verify and F-1 graduates on OPT to report any name or address changes, as well as any changes to their employer.

Some additional items were clarified in the final rule, including employer and graduate requirements to report any material changes in their training program; and that graduates must work a minimum of 20 hours per week per employer to qualify for the additional extension. In addition, the F-1 graduate may use a prior eligible STEM degree conferred by a U.S. institution of higher education within the prior 10 years to apply for a 24-month STEM OPT extension even if the most recent degree is not a STEM degree. However, the prior degree must not have already been the basis of a STEM OPT extension.

To ensure that a F-1 graduate must not replace a U.S. worker, the rule requires the STEM practical training opportunity to be commensurate with those applicable to similarly situated U.S. workers.

The new rule will take effect on May 10, 2016. Employers should begin to be mindful of the regulation changes, particularly with respect to the increased responsibilities of hiring a STEM OPT graduate, such as devising a formal training plan, complying with the increased reporting requirements and anticipating DHS site visits.


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