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January 5, 2017
Akshat Tewary, Esq.

Many students in the final year of university studies spend a great deal of time in planning their post-graduate lives. For some, this involves applying for admission at a post-graduate program. For many others, securing a job is foremost on the mind. Given that the typical open job receives six applications, [1] this can be a stressful time for final-year students and recent graduates. However, job-seekers who are U.S. Citizens or Legal Permanent Residents should consider themselves lucky because they do not have the additional headache of securing their continued status in the United States. International students in the United States in F-1 or some other nonimmigrant status have the unenviable task of not only finding an employer in a tough economy, but also finding one that will sponsor their continued stay in the United States.

The typical path for a graduating student in F-1 status who seeks to work in the United States is the following:

  1. Find an employer in a field relating to the student's education.
  2. If available, apply for post-completion Optional Practical Training (OPT) for a period of 12 months post-graduation.
  3. Towards the end of the OPT period, again find a willing sponsor/employer and either file a 24 month OPT STEM extension or file for a change of status to that of H-1B nonimmigrant under the annual H-1B quota.

Basic Information About Optional Practical Training

Post-Completion OPT

An F-1 student is entitled to 12 months of work authorization under Optional Practical Training per program level (e.g. Bachelor's level, Master's level, etc.). This 12 months of eligibility can be utilized during the course of studies ("pre-completion OPT") or after graduation ("post-completion OPT"). Pre-completion OPT is used less frequently than post-completion OPT because the former only allows a student to work up to 20 hours per week while school is in session. In contrast, post-completion OPT allows for full-time work during the 12 month period.

In order to maintain status, students in F-1/OPT must secure and maintain employment in a field that is directly related to their education. In the past, USCIS was inconsistent in determining whether a particular student had violated F-1/ OPT by virtue of being unemployed. Under regulatory changes effective April 2008, F-1 students in post-completion OPT can now accrue only up to 90 days of unemployment while still maintaining status.[2] A graduating student can apply for OPT by first asking the Designated School Official (DSO) to endorse the student's Form I-20 with an OPT notation, and then filing a Form I-765 between 90 days prior and 60 days after the program end date.

24 Month Extension of OPT for STEM Degree Holders

STEM extensions allow students currently in post-completion OPT to extend the OPT period for another 24 months, provided the degree earned was in an enumerated specialty in science, technology, engineering or mathematics.[3] Students who receive a 24 month STEM OPT extension are given an additional 60 days of permissible unemployment, for a total of 150 days of allowable unemployment over the entire post-completion OPT period. Further, all OPT students have certain reporting obligations that require communication with the school's DSO. Students applying for a STEM extension must apply within 60 days of the DSO entering the recommendation for OPT into the student's SEVIS record. Note: If you file your extension application on time and your OPT period expires while your OPT extension application is pending, USCIS will extend your OPT employment authorization for up to 180 days.

A particularly onerous requirement for STEM extensions is that the student's sponsoring employer must register under the USCIS's E-Verify system. E-Verify is an Internet-based system that allows an employer, using information reported on an employee's Form I-9, to determine the eligibility of that employee to work in the United States. Currently, E-Verify is only required for all employers in a handful of states (such as Arizona, Mississippi, South Carolina and Utah) as well as for all federal contractors. Once an employer registers under E-Verify, it must use the system to confirm work authorization for all employees going forward. Under the revamped 24 month STEM program, employers will also be required to attest to the training undertaken by the STEM OPT holder, by submitting a Form I-983 training plan to the school's DSO.

Basic Information About H-1B Cap Filings for Students

The H-1B program allows an employer to temporarily employ a foreign worker in the U.S. on a nonimmigrant basis in a specialty occupation or as a fashion model of distinguished merit and ability. A specialty occupation requires the theoretical and practical application of a body of specialized knowledge and a bachelor's degree or the equivalent in the specific specialty (e.g., sciences, medicine and health care, education, biotechnology, and business specialties, etc…). Current laws limit the number of foreign workers who may be issued a visa or otherwise be provided H-1B status to 65,000 per fiscal year. Sponsoring employers are required to file a Labor Condition Application (LCA) with the Department of Labor (DOL).

Qualifying Criteria

To hire a foreign worker on an H-1B visa, the job must be a professional position that requires, at a minimum, a bachelor's degree in the field of specialization. Likewise, the beneficiary must possess the equivalent of the required bachelor's degree, whether acquired via a single degree or by virtue of a combination of education, training and experience.

Each employer seeking an H-1B nonimmigrant has several responsibilities:

  • The employer shall submit a completed LCA on Form ETA 9035E in the manner prescribed by the regulations. By completing and signing the LCA, the employer agrees to several attestations regarding an employer's responsibilities, including the wages, working conditions, and benefits to be provided to the nonimmigrant.
  • The employer shall make the LCA and necessary supporting documentation available for public examination at the employer's principal place of business in the U.S. or the place of employment within one working day after the date on which the LCA is filed with ETA.
  • The employer may then submit a copy of the approved LCA to U.S. Citizenship and Immigration Services (USCIS) with a completed petition (USCIS Form I-129) requesting H-1B classification.
  • The employer shall not allow the nonimmigrant worker to begin work until USCIS grants the worker authorization to work in the U.S. for that employer.
  • The employer shall maintain documentation to meet its burden of proof with respect to the validity of the statements made in its LCA and the accuracy of information provided, in the event that such statement or information is challenged. The employer shall also maintain such documentation at its principal place of business in the U.S. and shall make such documentation available to DOL for inspection and copying upon request.

Filing Under the H-1B Quota

As noted above, approximately 65,000 H-1B visa numbers are available each fiscal year.[4] In addition to this allocation, F-1 students may also avail of a specially demarcated exemption of 20,000 visas per year, applicable to those holding a U.S. Master's degree. There are also other provisions for exemption from the H-1B numerical limitation as well, such as for employees of nonprofit research organizations.[5] A new H-1B visa can be utilized effective the start of the new federal fiscal year, which starts on October 1. In addition, petitioners are allowed to file up to 6 months in advance of the requested start date. Thus, the H-1B cap effectively opens on April 1 of every year, for employment beginning no earlier than October 1 of that year.

In the recent past, demand for H-1B visas has generally outstripped supply. For instance, the Fiscal Year 2017 H-1B Quota (effective October 1, 2016) expired on the first days of availability. As per regulation, a lottery was held among the approximately 236,000 petitions received on the first days of April 2016. [6] Barring a cataclysmic change in the H-1B landscape, the H-1B quota for the next few years will continue to expire well before the end of the fiscal year. Given the fact that the U.S. economy has rebounded slightly, this year it is quite likely that the H-1B quota would expire upon the opening of the filing period. This has special significance for F-1 students in their final semester in U.S. Master's degree programs. Under 8 C.F.R. § 103.2(b)(12), evidence must establish eligibility as of the time of filing an H-1B petition. Therefore, a student who will graduate from a U.S. Master's program in June 2017 cannot file an H-1B cap petition until after the graduation date, and therefore runs the risk of possibly missing the H-1B cap for the year. USCIS has announced a limited exception: a student may still be eligible for a Master's exemption H-1B filing if that student has completed all requirements for the degree as of the H-1B filing date. In other words, if the student will graduate in June 2017 but has otherwise satisfied all requirements for the degree (including passage of any required dissertation/thesis) prior to April 1, then that student is eligible for an H-1B Master's filing on the day the quota opens up.

Choosing Between Post-Completion OPT and an H-1B Cap Filing: Caught Between Scylla and Charybdis

While many graduating students automatically opt for post-completion OPT upon graduation, the choice between this option and H-1B cap filing is not obvious, and the optimal decision depends on a variety of factors. Both H-1B and OPT require a nonimmigrant to be employed in order to protect status. Thus, neither status is ideal. Loss of a job has a doubly harmful effect on individuals in either status - both income and status are put in jeopardy.

From the perspective of an employer, OPT is more preferable than H-1B employment, as the former does not have any prevailing wage requirement. In fact, the OPT regulations even allow "voluntary" employment during the first 12 months of post-completion OPT, as long as an adequate relationship between employer and employee exists. Even so, employers who employ OPT students in unpaid positions may risk running afoul of their minimum wage obligations under the Fair Labor Standards Act and its implementing regulations, depending on the circumstances.

Similarly, an H-1B employer can face stiff penalties for "benching" or any other unauthorized deductions from an H-1B employee's salary. Therefore, H-1B employment is often preferable from the perspective of an employee, as it typically involves greater assurances of compensation. Students in OPT status are also subject to somewhat burdensome reporting requirements that require them to stay in contact with their school DSOs. These additional reporting requirements do not exist for H-1B nonimmigrants.

Another factor to consider is the fact that H-1B employers have certain notice and public access responsibilities that are in addition to the normal requirements applicable to U.S. citizen and Permanent Resident employees. Most companies in the United States are unfamiliar with the H-1B regulations, and typically an F-1 student seeking H-1B employment will need to apprise the employer of its responsibilities under the law. By contrast, OPT employers do not have the same kind of posting and public access obligations. However, as noted above, an employer of an F-1 student utilizing the 24-month STEM extension provision does need to utilize E-Verify for all new hires going forward.

Perhaps the most significant issue from the perspective of a graduating student is that of nonimmigrant intent. Under USCIS regulations, F-1 students must maintain nonimmigrant intent. That is, they must have no intention of staying in the United States permanently. Thus, a student on OPT could jeopardize continued status by pursuing green card processing, whether through an employer or on the basis of a family relationship. The H-1B visa specifically allows for dual-intent, whereby an H-1B nonimmigrant is permitted to pursue immigrant visa processing, while still maintaining a present intention to stay in the United States in H-1B status temporarily. Accordingly, an H-1B cap filing is preferable for an F-1 student whose intention has now changed such that he or she now wishes to stay in the United States on a long term basis.

In sum, there are numerous advantages and disadvantages to both OPT and H-1B employment for a graduating F-1 student, and such an individual will have to weigh these factors and the employer's preferences in arriving at a decision.

The "Cap Gap" Provision and for H-1B Filers in F-1/OPT Status

The above analysis has assumed that the F-1 student is in the final year of study, and has the choice between pursuing post-completion OPT and filing an H-1B cap petition. For F-1 students who are already in post-completion OPT, and for whom a STEM extension is either impossible or undesired, the choice is typically simpler. While a particular student may qualify for a number of other nonimmigrant or immigrants visa categories, across the United States the most popular avenue for post-OPT employment remains the H-1B visa.

As noted above, the H-1B quota opens on April 1, for employment beginning on October 1, as H-1B petitions can be filed up to six months in advance of the requested start date. The USCIS has promulgated the "cap-gap" provisions as a benefit to F-1 students in OPT. If the H-1B quota is still open as of October 1 (impossible this year), and the cap-subject H-1B petition is filed on or after that date, the cap-gap provisions have no significance. Rather, cap-gap is meant to address the specific scenario where both the H-1B quota and a student's OPT period expire between April 1, 2017 and October 1, 2017. In that scenario, but for the cap-gap provision, an F-1 student would be out of status for the period between the OPT expiration and October 1, 2017.

The following cap-gap rules apply for F-1 students on OPT applying for a Change of Status effective October 1, 2017. These rules assume that a) the F-1 student is in OPT status that expires between April 1, 2017 and October 1, 2017, b) the F-1 student's prospective employer files an H-1B cap petition as a Change of Status filing effective October 1, 2017, and, c) in case the H-1B quota is subject to a lottery, the H-1B cap filing is receipted.

A. Where the Student will be on Post-completion OPT on the H-1B cap filing date, and the OPT expires before October 1, 2017:

If the H-1B cap case is filed as a Change of Status from F-1 to H-1B effective October 1, 2017, OPT is extended until the lottery results (if any) are announced, and under the following rules thereafter:

  • If the case does not get selected under the H-1B lottery, and at the time the student has no remaining time in the regular post-completion OPT period (as per the EAD card), the student’s 60 day grace period begins immediately. If the case does not get selected, and at the time the student does have remaining time in the regular post-completion OPT period (as per the EAD card), then the student’s F-1/OPT status continues and ends as usual (as if no H-1B petition had been filed).
  • If the case gets selected under the H-1B lottery, OPT is extended as necessary until a maximum period of October 1, 2017. If the case gets selected and is ultimately denied, and at the time of denial the student has some remaining time in the regular post-completion OPT period (as per the EAD card), the student would have that much remaining time in F-1/OPT status (as if the H-1B had never been filed). If the case gets selected and is ultimately denied, and at the time of denial the student has no remaining time in the regular post-completion OPT period (as per the EAD card), the student’s 60 day grace period begins from the date of denial(, unless the H-1B denial identified a lapse in F-1 status). There is no work authorization during a 60 day grace period. If the case is selected and is approved before October 1, 2017, the OPT ends on September 30, 2017 and the H-1B begins on October 1, 2017. If the case is selected and is approved after October 1, 2017, the H-1B status (and post-October 1, 2017 work authorization) only begins upon approval.

B. Where the Student will be on the 60 day “Grace Period” on the H-1B cap filing date:

If the H-1B cap case is filed as a Change of Status from F-1 to H-1B effective October 1, 2017, authorized stay (but not work authorization) is extended as necessary until the lottery (if any) is complete and H-1B cap receipts are issued. At that point, if the case is not receipted, any extension of the 60 day period comes to an end. If the case is receipted, F-1 status or authorized stay (but not work authorization) is extended as necessary until the case is approved or denied. If the case gets selected and is ultimately denied, any cap-gap extension of the 60 day period comes to an end. If the case gets selected and is approved before October 1, 2017, authorized stay (but not work authorization) continues until October 1, 2017, at which time H-1B status begins. If the case gets selected and is approved after October 1, 2017, H-1B status begins on the date noted on the approval notice.

C. Where the Student will be on Post-completion OPT on April 1, 2017 and the OPT expires after October 1, 2017:

The Cap-gap rule does not apply. The student continues on OPT with a pending Change of Status effective October 1, 2017. If the case is approved, the status would change to H-1B effective the date noted on the approval notice.

Given the complexity of these rules and the various contingencies involved, it is essential that students stay in touch with the DSO, and also follow up with the employer to ascertain the status of the H-1B filing. In particular, students who wish to travel should be aware of the special rules involved, which vary depending on factors such as whether a change of status has been filed, whether cap-gap applies, and whether the OPT student is employed as required. More information can be found at: http://www.ice.gov/doclib/sevis/pdf/opt_policy_guidance_04062009.pdf.

FOOTNOTES:

[1] The Curse of Long-term Unemployment will Bedevil the Economy, The Economist, Jan. 14, 2010, available at http://www.economist.com/world/unitedstates/displaystory.cfm?story_id=15271079.

[2] Extending Period of Optional Practical Training by 17 Months for F–1 Nonimmigrant Students With STEM Degrees and Expanding Cap-Gap Relief for All F–1 Students With Pending H–1B Petitions, 73 Fed. Reg. 18,944, 18,950 (Apr. 8, 2008), available at http://edocket.access.gpo.gov/2008/pdf/E8-7427.pdf.

[3] The full list of STEM-eligible degrees can be found at the ICE.gov website. U.S. Immigration and Customs Enforcement, STEM Designated Degree Programs, (Jan. 2, 2009), at http://www.ice.gov/sevis/stemlist.htm.

[4] The exact number varies slightly year-to-year depending on the number of "H-1B1" petitions (applicable only to citizens of Chile and Singapore) filed in the prior fiscal year.

[5] See INA §214(g)(5).

[6] The Quota for FY 2017 expired in April 2016. Thus, for instance, an employer seeking to employ an individual subject to the H-1B cap as of the date of this article would have to wait until October 1, 2017 before employing that person.

Last updated: January 5, 2017.

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