Did you know that 40 percent of Fortune 500 companies were started by immigrants or their children? Yes, 40 percent. Companies such as Kraft, Heinz, Proctor & Gamble, General Electric, Mattel and Disney all fall into that category.
Apple and Google are also on the list. Technology and the internet have seemed to accelerate the pace of innovation and the need for qualified employees in the STEM fields.
U.S. companies cannot fulfill their STEM-related position needs from the U.S. workforce alone. The government realized this in the late 1990s as the internet was rising in prominence and set higher H-1B visa cap limits accordingly. The cap was raised to a high of 115,000 (from 65,000) in 1999 and 2000 and soared to 195,000 from 2001-2003.
In 2004 however the H-1B cap reverted to 65,000 and has stuck there ever since. There are additional caps for higher educational degrees and for foreign nationals from specific geographical areas such as Australia, Singapore or Chile, but the regular H-1B cap remains at this low number despite the strong demand for STEM employees.
It’s not as if the colleges and universities in the U.S. have not been doing their part. The excellent reputation of U.S. college-level education, coupled with the outreach enabled by the internet, has attracted many foreign national students in the STEM fields to study in the States. U.S. colleges and universities enjoy the financial benefits of these students who often pay full tuition and graduate much needed STEM field candidates for employment.
The hard part is helping foreign national students make the jump from student to employee and from F-1 status to an H-1B visa. I first encountered this issue as an International Student Advisor at Purdue University. It is part of what inspired me to go into immigration law.
To help students make these transitions, the Department of Homeland Security (DHS) instituted an Optional Practical Training (OPT) extension to F-1 students with STEM degrees in 2008. This extension added 17 months to the 12-month post-graduation work period allowed to these students. The additional time enables many U.S. companies to hire highly qualified STEM candidates and gives the hired students time to apply for H-1B visas.
But this past August a court found the regulation governing the STEM OPT extension invalid because the DHS promulgated the rule without the required notice and comment period.
This ruling would leave many employees on OPT in limbo. The court gave DHS until February 12th, 2016 to properly issue a regulation on OPT. On October 19th DHS proposed a new regulation which further extends STEM OPT but imposes more requirements on the employer and foreign national employee.
Here are some highlights of the proposed regulation:
- The STEM OPT extension would lengthen from 17 months to 24 months, for a total of 36 months of OPT.
- The list of qualifying STEM degrees will be expanded.
- Student compensation must be comparable for similarly situated U.S. workers for that employer.
- No U.S. workers will be laid off or terminated due to the hiring of the student.
- The employer and student must come up with a mentoring-and-training plan, and complete an evaluation every 6 months documenting training and mentoring goals.
- Training must be directly related to the student’s STEM degree.
- Employers will be subject to Immigrations and Customs Enforcement (ICE) compliance visits.
The proposed regulation is now open for comments. DHS has allowed enough time for the notice and comment period to issue a final regulation by the February 12th , 2016 deadline.
No one anticipates that there will be no STEM OPT extension, but the court’s ruling and the feeling of being in limbo can unnerve those whose work is covered by the STEM OPT extension. If you have any questions about STEM OPT or what the proposed changes would mean for your company, please call me at 630.262.1435.