On March 11, 2016, the U.S. Department of Homeland Security (“DHS”) published a final rule amending the optional practical training (“OPT”) extension available to F-1 international students in science, technology, engineering and mathematics (“STEM”) fields engaged in a standard 12-month period of OPT. Significantly, beginning May 10, 2016, the STEM OPT extension period will be lengthened from 17 months to 24 months, expanding the period of work authorization available to eligible F-1 students.  

International students may apply for F-1 nonimmigrant classification to seek temporary admission into the U.S. for the purpose of engaging in a full course of study at a qualifying academic institution. The OPT program allows F-1 students to obtain work authorization for temporary employment directly related to the student’s major area of study in the U.S. Twelve months of OPT are available to students at each degree level, which may be used during the academic program or upon completion.

As originally introduced in 2008, the STEM OPT extension permitted eligible F-1 students who possessed a U.S. degree in a STEM field to apply for an additional 17 months of work authorization beyond the initial 12 months of standard OPT. As amended by the final rule, the STEM OPT extension period will be lengthened from 17 months to 24 months, providing eligible F-1 students with up to 3 years of post-degree employment authorization. This is significant because it provides an additional opportunity for employers to file a petition on behalf of an F-1 student in the annual H-1B visa lottery.

H-1B Visa Lottery                                                                                                                                  

The number of H-1B visas issued each year is statutorily capped at 65,000 with an additional 20,000 reserved for graduates of U.S. colleges or universities holding a master’s degree or higher. Petitions requesting H-1B visas that are not otherwise exempt from the statutory cap may only be filed by employers during a short window of time beginning April 1 for the upcoming fiscal year. Once the filing period closes, all petitions are subject to a random lottery to determine which will be selected for adjudication. Last year, of the nearly 233,000 petitions filed against the annual cap, approximately 148,000, or 63.5 percent, were not selected. Petitions not selected in the lottery are returned and may not be resubmitted until the following year when the filing period opens again on April 1. Meanwhile, beneficiaries currently working in the U.S. as F-1 students often expend all available OPT employment authorization before an employer has an opportunity to file another petition against the annual H-1B cap. Without an alternate basis for employment authorization, employers may not permit an F-1 student to continue working, burdening both the F-1 student and the employer.

The final DHS rule lengthening the STEM OPT extension will address this issue by providing an additional 7 months of OPT employment authorization to eligible F-1 students. While the current 17-month STEM OPT extension provides only one additional opportunity to file against the annual H-1B cap, beginning May 10, 2016, the 24-month STEM OPT extension will provide two additional opportunities, increasing the odds of selection in the H-1B visa lottery.

Key Takeaways for Employers

In addition to expanding the benefits available to eligible F-1 students, the final rule also implements additional safeguards for U.S. workers requiring a greater degree of employer involvement when employing F-1 students pursuant to the 24 month STEM OPT extension. We recommend that employers consider the additional obligations imposed by the new rule before an eligible F-1 student applies for the lengthened STEM OPT extension.