Federal Register, Volume 73 Issue 68 (Tuesday, April 8, 2008)

[Federal Register Volume 73, Number 68 (Tuesday, April 8, 2008)]
[Rules and Regulations]
[Pages 18944-18956]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-7427]

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DEPARTMENT OF HOMELAND SECURITY

8 CFR Parts 214 and 274a

[DHS No. ICEB-2008-0002; ICE No. 2124-08]
RIN 1653-AA56

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

AGENCY: U.S. Immigration and Customs Enforcement, U.S. Citizenship and
Immigration Services; DHS.

ACTION: Interim final rule with request for comments.

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SUMMARY: Currently, foreign students in F-1 nonimmigrant status who
have been enrolled on a full-time basis for at least one full academic
year in a college, university, conservatory, or seminary certified by
U.S. Immigration and Custom Enforcement's (ICE's) Student and Exchange
Visitor Program (SEVP) are eligible for 12 months of optional practical
training (OPT) to work for a U.S. employer in a job directly related to
the student's major area of study. This interim final rule extends the
maximum period of OPT from 12 months to 29 months for F-1 students who
have completed a science, technology, engineering, or mathematics
(STEM) degree and accept employment with employers enrolled in U.S.
Citizenship and Immigration Services' (USCIS') E-Verify employment
verification program. This interim rule requires F-1 students with an
approved OPT extension to report changes in the student's name or
address and changes in the employer's name or address as well as
periodically verify the accuracy of this reporting information. The
rule also requires the employers of F-1 students with an extension of
post-completion OPT authorization to report to the student's designated
school official (DSO) within 48 hours after the OPT student has been
terminated from, or otherwise leaves, his or her employment with that
employer prior to end of the authorized period of OPT.
This rule also ameliorates the so-called ``cap-gap'' problem by
extending the authorized period of stay for all F-1 students who have a
properly filed H-1B petition and change of status request (filed under
the cap for the next fiscal year) pending with USCIS. If USCIS approves
the H-1B petition, the students will have an extension that enables
them to remain in the United

[[Page 18945]]

States until the requested start date indicated in the H-1B petition
takes effect. This interim final rule also implements a programmatic
change to allow students to apply for OPT within 60 days of concluding
their studies.

DATES: This interim final rule is effective April 8, 2008. Written
comments must be submitted on or before June 9, 2008.

ADDRESSES: You may submit comments, which must be identified by
Department of Homeland Security docket number ICEB-2008-0002, using one
of the following methods:
Federal Rulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
Mail: Office of Policy, U.S. Immigration and Customs
Enforcement, Department of Homeland Security, 425 I Street, NW., Room
7257, Washington, DC 20536.
Hand Delivery/Courier: The address for sending comments by
hand delivery or courier is the same as that for submitting comments by
mail. Contact telephone number is (202) 514-8693.
Facsimile: Comments may be submitted by facsimile at (866)
466-5370.
Viewing Comments: Comments may be viewed online at http://www.regulations.gov or in person at U.S. Immigration and Customs
Enforcement, Department of Homeland Security, Chester Arthur Building,
425 I Street, NW., Room 7257, Washington, DC 20536. You must call
telephone number (202) 514-8693 in advance to arrange an appointment.

Public Participation

This is an interim final rule with a request for public comment.
The most helpful comments reference the specific section of the rule
using section number, explain the reason for any recommended change,
and include data, information, and the authority that supports the
recommended change.
Instructions: All submissions must include the agency name and
Department of Homeland Security docket number ICEB-2008-0002. All
comments (including any personal information provided) will be posted
without change to http://www.regulations.gov. See ADDRESSES above for
methods to submit comments. Mailed submissions may be paper, disk, or
CD-ROM.

FOR FURTHER INFORMATION CONTACT: Louis Farrell, Director, Student and
Exchange Visitor Program; U.S. Immigration and Customs Enforcement,
Department of Homeland Security; Chester Arthur Building, 425 I Street,
NW., Suite 6034, Washington, DC 20536; telephone number (202) 305-2346.
This is not a toll-free number. Program information can be found at
http://www.ice.gov/sevis/.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Background and Purpose
A. Optional Practical Training and Need To Extend for F-1
Students With STEM Degrees
B. ``Cap-Gap'' and Need To Expand Relief to All F-1 Students
With Pending H-1B Petitions
II. Discussion of This Interim Final Rule
A. Extension of Optional Practical Training by 17 Months for F-1
Students With STEM Degrees
1. Requirements for Students Seeking a 17-Month OPT Extension
2. Requirement for Employers of Students with a 17-Month OPT
Extension
B. Expansion of Cap-Gap Relief for All F-1 Students With Pending
H-1B Petitions
C. Related Changes to the OPT Provisions
1. Changes to Post-Completion OPT
2. Validation That OPT Employment Is Related to the Student's
Degree Program
III. Regulatory Requirements
A. Administrative Procedure Act
B. Regulatory Flexibility Act
C. Small Business Regulatory Enforcement Fairness Act of 1996
D. Executive Order 12866
E. Executive Order 13132
F. Executive Order 12988 Civil Justice Reform
G. Paperwork Reduction Act
List of Subjects in 8 CFR Part 214

Table of Abbreviations
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Abbreviation Amplification
------------------------------------------------------------------------
APA.................................... Administrative Procedure Act
ASC.................................... Application Support Center
CEU.................................... Compliance Enforcement Unit
CBP.................................... U.S. Customs and Border
Protection
CFR.................................... Code of Federal Regulations
DHS.................................... Department of Homeland Security
DSO.................................... Designated School Official
EAD.................................... Form I-766, Employment
Authorization Document
ICE.................................... U.S. Immigration and Customs
Enforcement
IIRIRA................................. Illegal Immigration Reform and
Immigrant Responsibility Act
of 1996
INA.................................... Immigration and Nationality Act
of 1952, as amended
INS.................................... Immigration and Naturalization
Service
OMB.................................... Office of Management and Budget
OPT.................................... Optional Practical Training
RFA.................................... Regulatory Flexibility Act
SEVIS.................................. Student and Exchange Visitor
Information System
SEVP................................... Student and Exchange Visitor
Program
STEM................................... Science, Technology,
Engineering, or Math
U.S.................................... United States
USA PATRIOT Act........................ Uniting and Strengthening
America by Providing
Appropriate Tools Required to
Intercept and Obstruct
Terrorism Act
USCIS.................................. U.S. Citizenship and
Immigration Services
------------------------------------------------------------------------

I. Background and Purpose

A. Optional Practical Training and Need To Extend by 17 Months for F-1
Students With STEM Degrees

Section 101(a)(15)(F)(i) of the Immigration and Nationality Act of
1952, as amended (INA), 8 U.S.C. 1101(a)(15)(F)(i), establishes the F-1
nonimmigrant classification for individuals who wish to come to the
United States temporarily to attend an academic or language training
institution certified by the Student and Visitor Exchange Program
(SEVP) for U.S. Immigration and Customs Enforcement (ICE). F-1 students
may remain in the United States for the duration of their educational
programs if they otherwise maintain status. 8 CFR 214.2(f)(5). Once an
F-1 student has completed his or her course of study, and any
authorized practical training following completion of studies, the
student must either transfer to another SEVP-certified school to
continue studies, change to a different nonimmigrant status, otherwise
legally extend their period of authorized stay in the United States, or
leave the United States. 8 CFR 214.2(f)(5)(iv). F-1 students are
allowed 60 days after the completion of such studies and practical
training to prepare for departure from the United States. 8 CFR
214.2(f)(5)(iv).
F-1 students generally are not authorized to work in the United
States during the term of their educational program, with limited
exceptions. Currently, students in F-1 nonimmigrant status who have
been enrolled on a full-time basis for at least one full academic year
in a college, university, conservatory, or seminary certified by SEVP,
and have otherwise maintained status, are eligible to apply for up to
12 months of optional practical training (OPT) to work for a U.S.
employer in a job directly related to the student's major area of
study. 8 CFR 214.2(f)(10). F-1 students may obtain OPT either during
their educational program (``pre-completion OPT'') or after the student
graduates (``post-completion OPT''). The student remains in F-1 status
throughout the OPT period.

[[Page 18946]]

An F-1 student in post-completion OPT, therefore, does not have to
leave the United States within 60 days after graduation, but is
authorized to remain in the United States for the entire post-
completion OPT period. If the student has not used any pre-completion
OPT, then the student's post-completion OPT period could be up to 12
months. Once the post-completion OPT period has concluded, the student
must depart the United States within 60 days, unless he or she changes
status or otherwise legally extends his or her stay in the United
States (e.g., starts a graduate program).
During his or her authorized period of stay, a qualified F-1
student may receive a change of nonimmigrant status to H-1B
nonimmigrant status if an employer has timely filed, and USCIS grants,
a petition on behalf of that student. The employer must submit a Form
I-129, Petition for a Nonimmigrant Worker to USCIS. The Form includes a
section for the employer to indicate whether change of status is being
requested for the beneficiary (if eligible), or whether the beneficiary
will instead apply for a visa outside of the United States at a U.S.
consulate. USCIS may grant H-1B status to eligible nonimmigrants
employed in or offered a job by the petitioner in a specialty
occupation. 8 CFR 214.2(h)(1)(ii)(B). A specialty occupation is one
that requires the theoretical and practical application of a body of
specialized knowledge and a bachelor's or higher degree in the specific
specialty as a minimum qualification. INA Section 214(i).
Congress, however, has prohibited USCIS from granting H-1B status
to more than 65,000 nonimmigrant aliens during any fiscal year
(referred to as the ``cap'').\1\ See INA Section 214(g). The H-1B
category is greatly oversubscribed. When USCIS determines that the cap
will be reached for that fiscal year, based on the number of H-1B
petitions received, it announces to the public the final day on which
USCIS will accept such petitions for adjudication in that fiscal year.
USCIS refers to this day as the ``final receipt date.'' See 8 CFR
214.2(h)(8)(ii)(B). USCIS then randomly selects from among the
petitions received on the final receipt date the number of petitions
necessary to reach the 65,000 cap. Id. If the final receipt date falls
within the first five business days on which petitions subject to the
applicable cap may be filed, USCIS will randomly select the number of
petitions necessary to reach the 65,000 cap from among those filed
during the acceptance period.
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\1\ The 65,000 person cap does not, however, apply to certain
limited classes of aliens, including individuals who are employed
by, or have received offers of employment at: (1) An institution of
higher education, or a related or affiliated nonprofit entity, or
(2) a nonprofit research organization or a governmental research
organization. Additionally, there is an exemption from the H-1B cap
for up to 20,000 individuals who are advanced degree graduates
(master's degree or higher) from U.S. institutions of higher
education.
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There is a significant amount of competition among employers of
highly-skilled workers for the limited number of H-1B visas available
each fiscal year. Each year, the cap has been reached earlier in the
year. For FY05, the cap was reached on October 1, 2004, the first day
of that fiscal year. In FY06, the cap was reached on August 10, 2005;
and in FY 07, the cap was reached on May 26, 2006. Last year, the cap
was reached on April 2, 2007, the first business day for filing. On
that single day, USCIS received more than twice the number of petitions
needed to reach the cap for that fiscal year.\2\
Many employers who hire F-1 students under the OPT program
eventually file a petition on the students' behalf for classification
as an H-1B worker in a specialty occupation. If the student is
maintaining his or her F-1 nonimmigrant status, the employer may also
include a request to have the student's nonimmigrant status changed to
H-1B. Because the H-1B category is greatly oversubscribed, however, OPT
employees often are unable to obtain H-1B status within their
authorized period of stay in F-1 status, including the 12-month OPT
period, and thus are forced to leave the country. The inability of U.S.
employers, in particular in the fields of science, technology,
engineering and mathematics, to obtain H-1B status for highly skilled
foreign students and foreign nonimmigrant workers has adversely
affected the ability of U.S. employers to recruit and retain skilled
workers and creates a competitive disadvantage for U.S. companies.
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\2\ See USCIS Update at http://www.uscis.gov/files/pressrelease/H1BFY08Cap040307.pdf.
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The National Science Foundation (NSF), in its Science and
Engineering Indicators 2008 (SEIND08),\3\ took note of these trends.
NSF observed that globalization of science and technology has proceeded
at a quick pace since the early 1990s. Increased international travel
coincided with the development of the Internet as a tool for unfettered
worldwide information dissemination and communication. ``By the late
1990s,'' the report continues ``many governments had taken note of
these developments. They increasingly looked to the development of
knowledge-intensive economics for their countries' economic
competitiveness and growth.'' SEIND08 at 0-4. NSF further reports that
``twenty-five percent of all college-education science and engineering
occupations in 2003 were foreign born, as were [forty percent] of
doctorate holders in science and engineering.'' According to the Task
Force on the Future of American Innovation, Measuring the Moment:
Innovation, National Security and Economic Competitiveness (November
2006),\4\ the proportion of American students in the United States
obtaining degrees in STEM fields has fallen from 32% to 27%. Later, the
report reveals that since 2000, there have been more foreign graduate
students studying engineering and the physical, computer and
mathematical sciences in U.S. graduate schools than U.S. citizens and
permanent residents.
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\3\ This publication may be found at http://www.nsf.gov/statistics/seind08.
\4\ This report may be accessed at http://www.futureofinnovation.org/PDF/BII-FINAL-HighRes-11-14-06_nocover.pdf.
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The NSF goes on to say that ``U.S. [Gross Domestic Product] growth
is robust but cannot match large, sustained increases in China and
other Asian economies.'' And because of this globalization, the United
States, while still the leading producer of scientific knowledge, faces
a labor market in which it must increasingly compete with these
countries. The economies of the Organization of Economic Cooperation
and Development (OECD) countries, particularly Australia, Canada, and
certain European countries, are also providing increased opportunities
for STEM scientists. And STEM graduates from the growing economies of
China, India, and Russia, for example, have increased employment
opportunities in their native countries. Thus, the Task Force on the
Future of American Innovation reports ``the impact of China and India
on global R&D [research and development] is significant and growing
rapidly: In 1990, these two countries accounted for 3.4% of foreign R&D
staff, which increased to 13.9% by 2004. By the end of 2007, China and
India will account for 31% of global R&D staff, up from 19% in 2004.''
See Measuring the Moment: Innovation, National Security and Economic
Competitiveness (November 2006). In short, with their large and growing
populations of STEM-graduate scientists, high-tech industries in these
three countries and others in the OECD now compete much more
effectively against the U.S. high technology industry.

[[Page 18947]]

DHS has received communications from a wide range of concerned
stakeholders, including companies in the high-tech industry, members of
Congress, and U.S. educational institutions, about the adverse impact
on the U.S. economy and the ability of U.S. schools to attract talented
foreign students for STEM study programs due to the immigration and
employment practices in the United States. Representatives of high-tech
industries in particular have raised significant concerns that the
inability of U.S. companies to obtain H-1B visas for qualified F-1
students in a timely manner continues to result in the loss of skilled
technical workers to countries with more lenient employment visa
regimes, such as Canada and Australia. See Testimony of Bill Gates,
Chairman, Microsoft Corporation, before the U.S. Senate Committee on
Health, Education, Labor & Pensions, ``Strengthening American
Competitiveness for the 21st Century'' (Washington, D.C.; March 7,
2007).\5\
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\5\ A copy of this testimony can be accessed at http://help.senate.gov/hearings/2007_03_07/Gates.pdf.
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Notably, the European Union recently proposed a ``Blue Card''
program, similar to the U.S. H-1B visa program, under which skilled
workers would be able to obtain a temporary work visa for employment in
the European Union. Unlike the H-1B program, the European Union's Blue
Card program proposal would not have a cap. The European Union
estimates that workers would usually be able to obtain their visas in
90 days or less. If the Blue Card proposal is adopted, U.S. employers
could be at a competitive disadvantage to employers in the European
Union when recruiting foreign national candidates. U.S. high-tech
employers are particularly concerned about the H-1B cap because of the
critical shortage of domestic science and engineering talent and the
degree to which high-tech employers are as a consequence necessarily
far more dependent on foreign workers than other industries. See The
National Science Foundation, Rising Above the Gathering Storm:
Energizing and Employing America for a Brighter Economic Future (2007),
pp. 78-83 (describing the critical shortages of science, math, and
engineering talent in the United States) .\6\
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\6\ This publication may be found at http://www.nap.edu/catalog.php?record_id=11463.
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Many F-1 students who graduated last spring will soon be concluding
their 12-month periods of OPT. Unless employers for those students are
able to obtain H-1B visas when the filing period commences on April 1,
2008 for FY09 (October 1, 2008), many of these students will need to
leave the United States when their current post-completion OPT period
concludes.
This interim final rule addresses the immediate competitive
disadvantage faced by U.S. high-tech industries, and thus may quickly
ameliorate some of the adverse impacts on the U.S. economy. It does
this by allowing an F-1 student already in a period of approved post-
completion OPT to apply to extend that period by up to 17 months (for a
maximum total period of 29 months of OPT) if the student received a
STEM degree. As discussed in Section II below, this extension is only
available to F-1 students with STEM degrees who have accepted
employment with an employer registered and in good standing with USCIS'
E-Verify employment verification program. In addition, employers of F-1
students who qualify for this 17-month extension of post-completion OPT
must report to the student's school DSO within 48 hours if the
student's employment ends prior to the end of the student's authorized
OPT employment period.

B. ``Cap-Gap'' and Need To Expand Relief to All F-1 Students With
Pending H-1B Petitions

As discussed above, nonimmigrant F-1 students on post-completion
OPT maintain valid F-1 status until the expiration of the OPT period
and the subsequent 60-day departure preparation period. Employers of
students already working for the employer under OPT often file
petitions to change the students' status to H-1B so that these
nonimmigrant aliens may continue working in their current or a similar
job. Many times, however, an F-1 student's OPT authorization will
expire prior to the student being able to assume the employment
specified in the approved H-1B petition.
Currently, an employer may not file, and USCIS may not approve, an
H-1B petition submitted earlier than six months before the date of
actual need for the beneficiary's services or training. 8 CFR
214.2(h)(9)(i)(B). As a result, the earliest date that an employer can
file an H-1B petition for consideration under the next fiscal year cap
is April 1, for an October 1 employment start date. If that H-1B
petition and the accompanying change of status request are approved,
the earliest date that the student may start H-1B employment is October
1. Consequently, F-1 students who are the beneficiaries of approved H-
1B petitions, but whose period of authorized stay (including authorized
periods of post-completion OPT and the subsequent 60-day departure
preparation period) expires before the October 1 H-1B employment start
date, would have a gap in authorized stay and employment. This
situation is commonly referred to as the ``cap-gap.''
An F-1 student in a cap-gap situation would have to leave the
United States and return at the time his or her H-1B status becomes
effective at the beginning of the next fiscal year. This gap creates a
hardship to a number of students and provides a disincentive to
remaining in the United States for employment. The cap-gap therefore
creates a recruiting obstacle for U.S. employers interested in
obtaining F-1 students for employment and submitting H-1B petitions on
their behalf. Moreover, when the student is already working for a U.S.
company on OPT and has to leave the United States, frequently for
several months, during the cap-gap period, the employer suffers a major
disruption.
USCIS is already authorized to extend the status of F-1 students
caught in a cap-gap between graduation and the start date on his or her
approved H-1B petition. 8 CFR 214.2(f)(5)(vi). However, before USCIS
can offer students any relief from the cap-gap, it must first determine
that the cap has been reached for the current fiscal year, or is likely
to be reached prior to the end of the current fiscal year, and then
publish a notice in the Federal Register announcing that status is
extended for students with pending H-1B petitions. Significantly, the
existing regulations do not take into account the fact that the H-1B
category is now oversubscribed to such a degree that USCIS' final
receipt date for petitions is now announced even before the start of
the fiscal year for which the petitions are being submitted and, in the
absence of an expansion of the 65,000 cap by Congress, this state of
affairs will likely continue indefinitely. The existing regulations,
therefore, are not an effective means of addressing the cap-gap problem
suffered by student beneficiaries of pending H-1B petitions (and their
employers).
This interim rule amends USCIS procedures by eliminating the
requirement that USCIS issue a Federal Register notice. Instead, this
rule extends the authorized period of stay, as well as work
authorization, of any F-1 student who is the beneficiary of a timely-
filed H-1B petition that has been granted by, or remains pending with,
USCIS. The extension of status and work authorization terminates on
October 1 of the fiscal year for which the H-1B visa has been
requested. This amendment better reflects the reality of the current
situation, where demand for

[[Page 18948]]

H-1B visas is so high that USCIS regularly receives enough petitions to
reach the cap before the beginning of the fiscal year for which
petitions are filed, and offer more substantial cap gap relief to both
students and employers.

II. Discussion of This Interim Final Rule

A. 17-Month Extension of Optional Practical Training for F-1 Students
Who Have Obtained a STEM Degree

This interim rule will allow F-1 students who have received a
degree in a STEM field to obtain an extension of their existing post-
completion OPT period for up to 17 months, for a maximum period of
post-completion OPT of 29 months. The extension, however, is only
available to students who are employed, or will be employed, by an
employer enrolled (and determined by USCIS to be in good standing) in
USCIS' E-Verify employment verification program at the time the student
applies for the 17-month extension. A student seeking an extension must
agree to report to a DSO at his or her school the following: Changes to
the student's name, the student's residential and mailing address, the
student's employer, and the address of the student's employer. The
student must also report to a DSO every six months from the date the
OPT extension starts to verify this information. In addition, the
employer of a student under extended OPT must report to the student's
school DSO within 48 hours after the student leaves employment with
that employer. The DSO must report all of this information in SEVIS.
1. Requirements for Students Seeking a 17-Month OPT Extension
This interim final rule will allow qualified F-1 students who
currently have approved post-completion OPT to apply for a 17-month
extension of OPT. The student's degree, as shown is SEVIS, must be a
bachelor's, master's, or doctorate degree with a degree code that is on
the current STEM Designated Degree Program List.
The STEM Designated Degree Program List is based on the
``Classification of Instructional Programs'' (CIP) developed by the
U.S. Department of Education's National Center for Education Statistics
(NCES). See Classification of Instructional Programs--2000: (NCES 2002-
165) U.S. Department of Education, National Center for Education
Statistics. Washington, DC: U.S. Government Printing Office.\7\ To be
eligible for the 17-month OPT extension, a student must have received a
degree in the following:
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\7\ This publication may be found at http://nces.ed.gov/pubs2002/2002165_2.pdf.

Actuarial Science. NCES CIP Code 52.1304
Computer Science: NCES CIP Codes 11.xxxx (except Data
Entry/Microcomputer Applications, NCES CIP Codes 11.06xx)
Engineering: NCES CIP Codes 14.xxxx
Engineering Technologies: NCES CIP Codes 15.xxxx
Biological and Biomedical Sciences: NCES CIP Codes 26.xxxx
Mathematics and Statistics: NCES CIP Codes 27.xxxx
Military Technologies: NCES CIP Codes 29.xxxx
Physical Sciences: NCES CIP Codes 40.xxxx
Science Technologies: NCES CIP Codes 41.xxxx
Medical Scientist (MS, PhD): NCES CIP Code 51.1401

The approved list is available on SEVP's Web site at http://www.ice.gov/sevis. DHS welcomes comment on the list and any
recommendations for additional degrees that the Department should
consider for inclusion in the list. DHS will continue to work with
interested parties to evaluate the degrees that may be added to this
list in the future, and will be reaching out to other agencies in the
development of the final rule. The Department, however, must also
continue to ensure that the extension remains limited to students with
degrees in major areas of study falling within a technical field where
there is a shortage of qualified, highly-skilled U.S. workers and that
is essential to this country's technological innovative
competitiveness.
DHS will announce any future changes to the list on this Web site.
Note that catch-all NCES CIP codes ending in ``99'' are not considered
STEM designated degrees.
Students who wish to extend OPT must request that their DSO
recommend the 17-month OPT extension. DSOs recommending the extension
must verify the student's eligibility, certify that the student's
degree is on the STEM Designated Degree Program List, and ensure that
the student is aware of his or her responsibilities for maintaining
status while on OPT. The DSO must make the recommendation to extend OPT
for the student through SEVP's Student and Exchange Visitor Information
System (SEVIS), a Web-enabled database for the collection of
information related to F, M and J nonimmigrants, certified schools, and
State Department approved exchange visitor programs. SEVP will
implement an interim update to SEVIS to ensure schools can recommend
extending the authorized OPT period for 17 months for qualified
students. The changes will be minimal due to the short time for
planning and the reduced testing cycle. SEVP is also planning a major
SEVIS release in the first part of FY 2009 to more fully support the
new regulatory requirements. SEVP will publish interim instructions for
the period between the interim update and the major release and provide
training opportunities for DSOs. SEVIS help desk personnel will provide
assistance with the proper interim procedures.
Once the DSO recommends a student for the extension, the student
must submit a Form I-765 and appropriate fees (as indicated in the form
instructions) to USCIS. Instructions for filing the Form I-765 can be
found at USCIS' Web site at http://www.uscis.gov.
This interim final rule also extends EADs for students with pending
requests for extension of post-completion OPT. An F-1 student who has
properly filed Form I-765 prior to the end date of his or her post
completion OPT is allowed to maintain continuous employment for up to
180 days while USCIS adjudicates the request for the extension.
To implement the changes discussed in this rulemaking, USCIS is
making conforming amendments to Form I-765 to ensure that that the F-1
students seeking a 17-month extension of their post-completion OPT are,
in fact, eligible to do so. USCIS is amending this form to add, among
other things, a new question 17 asking students to identify
the degree they have received, so that USCIS may determine that the
student has received a degree in a STEM field. The new Form I-765 also
will ask the student seeking the extension to provide the name of their
employer (as listed in E-Verify), and their employer's E-Verify Company
I.D. number or, if the employer is using a Designated Agent to perform
the E-Verify queries, a valid E-Verify Client Company I.D. number
2. Requirement for Employers of Students With a 17-Month OPT Extension
a. USCIS E-Verify Employment Verification Program
As discussed above, only students who are employed by employers who
have enrolled, and are determined by USCIS to be in good standing, in
USCIS'

[[Page 18949]]

E-Verify program will be eligible for the 17-month extension of post-
completion OPT. The E-Verify program is an Internet-based system
operated by USCIS, in partnership with the Social Security
Administration (SSA). E-Verify is currently free to employers and is
available in all 50 states, the District of Columbia, Puerto Rico,
Guam, and the U.S. Virgin Islands. E-Verify electronically compares
information contained on the Employment Eligibility Verification Form
I-9 (herein Form I-9) with records contained in SSA and DHS databases
to help employers verify identity and employment eligibility of newly-
hired employees. This program currently is the best means available for
employers to determine employment eligibility of new hires and the
validity of their Social Security Numbers.
Before an employer can participate in the E-Verify program, the
employer must enter into a Memorandum of Understanding (MOU) with DHS
and SSA. This memorandum requires employers to agree to abide by
current legal hiring procedures and to ensure that no employee will be
unfairly discriminated against as a result of the E-Verify program.
Violation of the terms of this agreement by the employer is grounds for
immediate termination of its participation in the program.
Employers participating in E-Verify must still complete a Form I-9
for each newly hired employee, as required under current law. Following
completion of the Form I-9, the employer must enter the newly hired
worker's information into the E-Verify Web site, and that information
is then checked against information contained in SSA and USCIS
databases. E-Verify compares employee information against more than 425
million records in the SSA database and more than 60 million records
stored in the DHS database. Currently, 93 percent of all employer
queries are instantly verified as work authorized.
It is important to note that, once an employer enrolls in E-Verify,
that employer is responsible for verifying all new hires, including
newly hired OPT students with 17-month OPT extensions, at the hiring
site(s) identified in the MOU executed by the employer and DHS. New
hires must be verified to be authorized to work in the United States
through E-Verify within three days of hire. If, however, an employer
enrolls in E-Verify to retain the employment of an OPT student, the
employer may not verify the employment eligibility of the OPT employee
in E-Verify as the MOU prohibits the verification of existing
employees. Additional information on enrollment and responsibilities
under E-Verify can be found at http://www.uscis.gov/E-Verify.
Employers can register for E-Verify on-line at http://www.uscis.gov/E-Verify. The site provides instructions for completing
the MOU needed to officially register for the program.
b. Employer Reporting Requirement
SEVP's ability to track nonimmigrant students in the United States
relies on reporting by the students' DSOs. DSOs obtain the needed
information from the school's recordkeeping systems and contact with
the students. Students on OPT, however, are often away from the
academic environment, making it difficult for DSOs to ensure proper and
prompt reporting on student status to SEVP. While DHS regulations
currently require DSOs to update SEVIS, the current reporting
requirements depend entirely on the student's timely compliance. DSOs
are not currently required to review and verify information reported by
students on a recurring basis. This combination of factors hinders
systematic reporting and SEVP's ability to track F-1 students during
OPT.
Accordingly, DHS will only extend post-completion OPT for students
employed by employers that agree to report when an F-1 student on
extended OPT terminates or otherwise leaves his or her employment with
the employer prior to end of the authorized period of OPT. The employer
must report this information to the DSO of the student's school no
later than 48 hours after the student leaves employment. Employers must
report this information to the DSO at the student's school unless DHS
announces another means to report such information through a Federal
Register notice. The contact information for the DSO is on the
student's Form I-20. DHS welcomes comments on possible means for
directly reporting to DHS, such as through electronic means similar to
or associated with the E-Verify platform.

B. Expansion of Cap-Gap Relief for All F-1 Students With Pending H-1B
Petitions

Currently, F-1 students who are the beneficiaries of approved H-1B
petitions, but whose period of admission (including authorized periods
of post-completion OPT and the subsequent 60-day departure preparation
period) expires before the H-1B employment start date, have a gap in
authorized stay and employment between the end of their F-1 status and
the beginning of their H-1B employment. This situation is commonly
referred to as the ``cap-gap.''
USCIS is authorized to extend the status of F-1 students caught in
a cap gap between the end of the student's F-1 status and the start
date on his or her approved H-1B petition.\8\ 8 CFR 214.2(f)(5)(vi).
The current regulations, however, do not provide for a commensurate
extension of students' employment authorization to cover the gap
period. Additionally, the regulations currently provide that USCIS must
determine that the H-1B cap will be met prior to the end of the
``current'' fiscal year before it may authorize an extension of stay
for students subject to the cap gap for that fiscal year by means of a
notice published in the Federal Register.
---------------------------------------------------------------------------

\8\ The current regulations also require that the
``Commissioner'' issue the notice in the Federal Register. This is a
technical error because this regulation has not been updated since
the responsibilities of the Commissioner of the former INS were
transferred to the Department of Homeland Security in March 2003
under the Homeland Security Act of 2002. Because DHS is removing
this provision altogether, there is no need to make the technical
correction from ``Commissioner'' to ``Director [of USCIS]'' at this
time.
---------------------------------------------------------------------------

This interim rule expands the relief offered by the existing cap
gap provision by first eliminating the limitation that cap gap relief
be authorized only when the H-1B cap is likely to be reached prior to
the end of the current fiscal year. This interim rule also removes the
requirement that USCIS issue a notice in the Federal Register to
announce the extension of status and instead allows an automatic
extension of status and employment authorization for F-1 students with
pending H-1B petitions. If USCIS denies a pending H-1B petition, the
student will have the standard 60-day period (from notification of the
denial or rejection of the petition) before they have to leave the
United States.
Unlike the extension of post-completion OPT, which is limited to F-
1 students who have obtained STEM degrees, the extension of status for
F-1 students in a cap-gap applies to all F-1 students with pending H-1B
petitions during a fiscal year.

C. Related Changes to the OPT Requirements

1. Changes to Post-Completion OPT
Currently, students must apply for post-completion OPT prior to
completing their course requirements. 8 CFR 214.2(f)(10)(ii)(A). This
is inconsistent with other regulatory provisions allowing students to
transfer, apply for a new degree program, or change to another
nonimmigrant status

[[Page 18950]]

during their 60-day post-completion departure preparation period.
Problems also arise if students fail to complete their program after
receiving authorization for post-completion OPT. Therefore, this rule
allows students to apply for post-completion OPT during the 60-day
departure preparation period.
2. Periods of Unemployment During OPT
DHS regulations currently define the period of an F-1 student's
status as the time the student is pursuing a full course of study at an
SEVP-certified school or engaging in authorized post-completion OPT. 8
CFR 214.2(f)(5). They do not specify how much time the student may be
unemployed, making it difficult to determine when an unemployed student
on post-completion OPT violates the requirements for remaining in F-1
status. As status during OPT is based on the premise that the F-1
student is working, there must be a limit on unemployment, just as the
F-1 student's period in school is based on the premise that he is
actually pursuing a full-time course of study, and there are limits on
how often the student can reduce his course load. An F-1 student who
drops out of school or does not pursue a full-time course of study
loses status; an F-1 student with OPT who is unemployed for a
significant period should similarly put his status in jeopardy.
Therefore, this rule specifies an aggregate maximum allowed period of
unemployment of 90 days for students on 12-month OPT. This maximum
period increases by 30 days for F-1 students who have an approved 17-
month OPT period. In addition to clarifying the student's status, this
measure allows time for job searches or a break when switching
employers.

III. Regulatory Requirements

A. Administrative Procedure Act

To avoid a loss of skilled students through the next round of H-1B
filings in April 2008, DHS is implementing this initiative as an
interim final rule without first providing notice and the opportunity
for public comment under the ``good cause'' exception found under the
Administrative Procedure Act (APA) at 5 U.S.C. 553(b). The APA provides
that an agency may dispense with notice and comment rulemaking
procedures when an agency, for ``good cause,'' finds that those
procedures are ``impracticable, unnecessary, or contrary to the public
interest.'' See 5 U.S.C. 553(b)(B). The exception excuses notice and
comment, however, in emergency situations, or where ``the delay created
by the notice and comment requirements would result in serious damage
to important interests.'' Woods Psychiatric Institute v. United States,
20 Cl. Ct. 324, 333 (1990), aff'd 925 F.2d 1454 (Fed. Cir. 1991); see
also National Fed'n of Fed. Employees v. National Treasury Employees
Union, 671 F.2d 607, 611 (D.C. Cir. 1982).
Currently, DHS estimates, through data collected by SEVP's Student
and Visitor Exchange Information System (SEVIS), that there are
approximately 70,000 F-1 students on OPT in the United States. About
one-third have earned a degree in a STEM field. Many of these students
currently are in the United States under a valid post-completion OPT
period that was granted immediately prior to the conclusion of their
studies last year. Those students soon will be concluding the end of
their post-completion OPT and will need to leave the United States
unless they are able to obtain an H-1B visa for FY09 or otherwise
maintain their lawful nonimmigrant status. DHS estimates that there are
30,205 F-1 students with OPT expiring between April 1 and July 31 of
this year. The 17-month extension could more than double the total
period of post-completion OPT for F-1 students in STEM fields. Even if
only a portion of these students choose to apply for the extension,
this extension has the potential to add tens of thousands of OPT
workers to the total population of OPT workers in STEM occupations in
the U.S. economy.
This interim rule also provides a permanent solution to the ``cap-
gap'' issue by an automatic extension of the duration of status and
employment authorization to the beginning of the next fiscal year for
F-1 students who have an approved or pending H-1B petition. This
provision allows U.S. employers and affected students to avoid the gap
in continuous employment and the resulting possible violation of
status. This increases the ability of U.S. employers to compete for
highly qualified employees and makes the United States more competitive
in attracting foreign students. Based on the historical numbers of
``cap-gap'' students taking advantage of a Federal Register Notice
extending F-1 status, ICE estimates that up to 10,000 students will
have approved H-1B petitions with FY09 start dates. At the end of their
OPT, these students must terminate employment and either depart the
United States within 60 days or extend their F-1 status by enrolling in
another course of study. Unless this rule, and the cap gap relief it
affords, is implemented this Spring, all these students must interrupt
their employment and those who leave the United States will not be
allowed to return until the October 1, 2008 start date on their H-1B
petitions.
The ability of U.S. high-tech employers to retain skilled technical
workers, rather than losing such workers to foreign business, is an
important economic interest for the United States. This interest would
be seriously damaged if the extension of the maximum OPT period to
twenty-nine months for F-1 students who have received a degree in
science, technology, engineering, or mathematics is not implemented
early this spring, before F-1 students complete their studies and,
without this rule in place and effective, would be required to leave
the United States.
Accordingly, DHS finds that good cause exists under 5 U.S.C. 553(b)
to issue this rule as an interim final rule. DHS nevertheless invites
written comments on this interim rule. Further, because this interim
final rule relieves a restriction by extending the maximum current
post-completion OPT period for certain students from 12 months to up to
29 months, DHS finds that this rule shall become effective immediately
upon publication of this interim final rule in the Federal Register. 5
U.S.C. 553(d).

B. Regulatory Flexibility Act

The Regulatory Flexibility Act (RFA) (5 U.S.C. 605(b)), as amended
by the Small Business Regulatory Enforcement and Fairness Act of 1996
(SBRFA), requires an agency to prepare and make available to the public
a regulatory flexibility analysis that describes the effect of the rule
on small entities (i.e., small businesses, small organizations, and
small governmental jurisdictions). RFA analysis is not required when a
rule is exempt from notice and comment rulemaking under 5 U.S.C.
553(b). DHS has determined that this rule is exempt from notice and
comment rulemaking pursuant to 5 U.S.C. 553(b)(B). An RFA analysis,
therefore, is not required for this rule.

C. Small Business Regulatory Enforcement Fairness Act of 1996

This is not a major rule, as defined by Section 804 of the Small
Business Regulatory Enforcement Act of 1996. This rule will not result
in an annual effect on the United States economy of $100 million or
more; a major increase in costs or prices; or significant adverse
effects on competition, employment, investment, productivity,
innovation, or the ability of United States-based companies to compete
with foreign-

[[Page 18951]]

based companies in domestic and export markets.

D. Executive Order 12866

This proposed rule has been designated as a ``significant
regulatory action'' under Executive Order 12866. This rule therefore
has been submitted to OMB for review. In addition, under section
6(a)(3)(C) of the Executive Order, DHS has prepared an assessment of
the benefits and costs anticipated to occur as a result of this
regulatory action and provided the assessment to OMB for review. This
assessment is as follows:
Recent numbers: This rule will have an impact on a small percentage
of international students in the United States. According to the DHS
Office of Immigration Statistics, an average of approximately 642,000
F-1 academic students, at all grade levels, have entered the United
States per year in fiscal years 2004, 2005, and 2006.\9\ According to
the Institute of International Education, approximately 583,000 of
these students are college students.\10\ Of those, SEVP records
indicate that close to 70,000 students currently participate in OPT
and, of those, only about 23,000 are OPT participants who are studying
in designated STEM fields. Thus, about 3.6 percent of F-1 students
could potentially benefit from this rule. Nonetheless, as shown below,
this may be a sufficient number to significantly benefit employers who
are in need of workers in STEM-related fields.
---------------------------------------------------------------------------

\9\ DHS Office of Immigration Statistics, Temporary Admissions
of Nonimmigrants to the United States: 2006, ``Nonimmigrant
Admissions (I-94 Only) by Class of Admission: Fiscal Years 2004 to
2006.'' Available on line at http://www.dhs.gov/xlibrary/assets/statistics/publications/NI_FR_2006_508_final.pdf.
\10\ The Institute of International Education, ``International
Student and Total U.S. Enrollment'' Available on line at: http://opendoors.iienetwork.org/?p=113122.
---------------------------------------------------------------------------

OPT extension volume estimate: A reasonable estimate of the number
of students who will participate in this new OPT 17-month extension
program is difficult for a number of reasons, but DHS estimates that
about 12,000 students will apply for an OPT extension after this rule
takes effect. Of the 23,000 OPT students, however, about 4,000 have
bachelor's degrees, 13,000 have master's degrees, and 6,000 have a
doctorate. Anecdotal evidence indicates that foreign students with a
master's or bachelor's degrees often continue as students and pursue
more advanced degrees. DHS experience indicates that many of these
students will be granted H-1B status and will not need an OPT
extension, although actual records do not exist on the rates at which
F-1 OPT participants actually receive an H-1B position. Additionally,
some students will not request an OPT extension because they are
returning to their home country, while many students will want to stay.
According to a report from the Oak Ridge Institute for Science and
Education, 65 percent of 2000 U.S. science and engineering doctoral
degree recipients with temporary visas were still in the United States
in 2005, up from a 61 percent 5-year stay rate found in 2003.\11\ This
implies that STEM students stay in the U.S. at a relatively high rate.
And, finally, the changes made by this rule are expected to increase
the attractiveness of the OPT program. Although a precise estimate of
the effect is impossible, the OPT application volume is likely to
increase at least a slight amount because of the impact of this rule on
program flexibility, length of stay, and students' quality of life.
Therefore, after considering these factors, DHS estimates that about
12,000 of the 23,000 students who could apply for the OPT extension
allowed by this rule, will apply in an average year after this rule
takes effect.
---------------------------------------------------------------------------

\11\ Finn, Michael, ``Stay Rates of Foreign Doctorate Recipients
from U.S. Universities: 2005,'' Oak Ridge Institute for Science and
Education (2007).
---------------------------------------------------------------------------

Public Costs
Fees. The fee for Form I-765 is $340. 8 CFR 103.7(b)(1). Thus, the
new filing fees to be collected by USCIS from students requesting an
employment authorization document as a result of this rule will be
about $4.1 million.\12\
---------------------------------------------------------------------------

\12\ $340 x 12,000 = $4,080,000.
---------------------------------------------------------------------------

Paperwork burden. The public reporting burden for completion of the
Form I-765 information is estimated at 3 hours and 25 minutes per
response, including the time for reviewing instructions, completing and
submitting the form. As discussed below in the Paperwork Reduction Act
section of this rule, this form is being amended to add a space for
STEM students to provide their degree, the name of their employer, and
their employer's E-Verify Company I.D. number or, if the employer is
using a Designated Agent to perform the E-Verify queries, a valid E-
Verify Company Client Company I.D. Number. Therefore, the 12,000
students requesting OPT will expend approximately 3.42 hours per
application for a total of 41,040 burden hours per year.\13\ Based on
the private industry employer average compensation costs of $28.03 per
hour worked,\14\ this requirement will result in an estimated total
cost of $1.15 million.\15\
---------------------------------------------------------------------------

\13\ 3.42 hours (25 minutes = .42 hours) x 12,000.
\14\ Employer Costs for Employee Compensation, All civilian
occupations, 3rd Quarter 2007, U.S. Department of Labor, Bureau of
Labor Statistics at http://data.bls.gov/cgi-bin/surveymost. No
consideration is given to possibly lower wage rates being applicable
for students.
\15\ 3.42 hours x 12,000 applications = 41,040. 41,040 x 28.03 =
$1,150,351 (rounded).
---------------------------------------------------------------------------

New burden. This rule adds to the current regulation's DSO and
student reporting requirements. A student with a 17-month extension to
post-completion OPT must also make a validation report to the DSO every
six months starting from the date of the extension, within 10 business
days, and ending when the student's F-1 status ends, if the student
changes educational levels at the same school or the student transfers
to another school or program. The validation is a confirmation that the
student's information in SEVIS is current and accurate. The DSO is
responsible for updating the student's record with SEVIS within 21
days. The DSO must also report in SEVIS when the employer of a student
with the 17-month OPT extension reports that the student no longer
works for that employer.
Also, this rule makes failure to report a basis for terminating the
student's status and provides that failure to report can impact the
future visa program and OPT eligibility of the school, employer, and
student. Further, the school is required by this rule to report to
SEVIS whether there have been any changes in the student's
circumstances or not. Although the student is already required to
report to the school DSO any changes in their address and their OPT
employer's name and address, and the school is then required to report
this information to SEVIS, program familiarity and anecdotal evidence
indicates that full compliance is lacking. The increased incentives to
comply with the reporting requirements provided in this rule will
result in about 2.5 additional reports per student per extension period
from students to schools and schools to SEVIS. Each report or update
will require an estimated 10 minutes. Thus, for the 12,000 students and
graduates expected to benefit from this rule, an additional reporting
burden of 5,000 hours (12,000 x .42 hours) is estimated to occur for
both the student and school for a total of 5,000 additional hours of
burden. Based on the private industry employer average compensation
costs of $28.03 per hour worked,\16\ this requirement

[[Page 18952]]

will result in an estimated total cost of $140,150 (5,000 hours x
$28.03).
---------------------------------------------------------------------------

\16\ Employer Costs for Employee Compensation, All civilian
occupations, 3rd Quarter 2007, U.S. Department of Labor, Bureau of
Labor Statistics at http://data.bls.gov/cgi-bin/surveymost. No
consideration is given to possibly lower wage rates being applicable
for students.
---------------------------------------------------------------------------

DHS has determined that the currently approved information
collection burden for SEVIS contains a high enough estimate of that
program's paperwork burden on program participants to encompass this
rule's requirements because reporting requirements were already
imposed, although not with the utmost clarity. Also, current
regulations do not impose any penalty on a school or student for
failure to report. SEVP will work with schools on the best way to
implement this new reporting requirement so as to maximize its benefit
while minimizing its burden on participating students and schools. SEVP
is making conforming amendments to its approved information collection
for SEVIS and has included the updated burden estimates. Public
comments are especially welcome on these changes.
E-Verify Registration. This rule requires employers of F-1 students
participating in the 17-month OPT extension to enroll in E-Verify. That
will require the employer to register for E-Verify if they wish to hire
an employee under the extended OPT. Less than 1 percent of the total
number of employers in the United States are currently enrolled in E-
Verify and a similar percentage of enrollment in E-Verify would be
expected for OPT employers. Thus, DHS anticipates that most employers
who would want to employ these students under the 17-month extension
would need to register for E-Verify.\17\
---------------------------------------------------------------------------

\17\ No allowance is made for the few employers that would
choose to no longer hire students under OPT because of this
requirement.
---------------------------------------------------------------------------

The time and cost associated with registering for E-Verify largely
depends on the access method a company chooses. The vast majority of
companies will sign up for employer access which requires approximately
3 to 4 hours for a person to register online, read and review the
Memorandum of Understanding, and take the tutorial. A recent cost
analysis for the E-Verify program looked at the associated costs for an
organization to undertake the above tasks based on an average salary
and the time required. According to this analysis, a company would
spend an average of $170 per registration for the Employer Access
method. This cost could increase if an employer chose to use a
Designated Agent or Web Services as their access method. The Designated
Agent costs can vary greatly and would be difficult to estimate as many
employers contract with a Designated Agent to perform a variety of
human resources related tasks. Web Services would also likely involve a
significant cost and time to the employer as they would need to design
their own software to interface with the E-Verify system.
DHS has no record of the numbers or identity of employers hiring
students under OPT, no figures on those that hire students and also
participate in E-Verify, no data on the average number of employees in
such firms, and no data on the average number of employees hired by
such firms for which the immigration status will have to be verified.
However, since this rule is applicable only to STEM students and recent
graduates, it is estimated that the employers and positions will be
similar in characteristics to those hiring employees in the H-1B
specialty worker program. In that program, USCIS records show that in
FY 2007, about 29,000 different employers employed at least one of the
65,000 initial H-1B employees (based on employer identification number)
with about 20,000 employing only one H-1B employee. Thus, employers
hiring new H-1B employees in FY 2007 hired an average of 2.24 each. If
the 12,000 students per year that DHS is estimating will receive an OPT
extension are distributed along those same lines, as is expected, they
will work for approximately 5,357 employers (12,000/2.24). Since about
1.0 percent of employers are already enrolled in E-Verify already,
5,300 employers are estimated to have to enroll in E-Verify as a result
of this rule. At $170 per registration for the Employer Access method,
the total initial enrollment costs from this rule would be
$901,000.\18\
---------------------------------------------------------------------------

\18\ It is assumed for this analysis that there would be no
initial costs for acquiring computers or Internet connections for
employers that would hire an OPT student or graduate with an STEM
major study area.
---------------------------------------------------------------------------

At the end of registration, the company is required to read and
sign a Memorandum of Understanding (MOU) that provides the terms of
agreement between the employer, SSA, and USCIS. It is expected that
each company will have a Human Resources manager review the MOU and
that many companies will also have a lawyer and or a general manager
review the MOU. Using the Bureau of Labor Statistics (BLS) estimates
for the average hourly labor rate, plus a multiplier of 1.4 to account
for fringe benefits, DHS calculated a labor rate of $48.33 for an HR
manager, $60.93 per hour for a general manager, and $76.09 for legal
counsel.\19\ Based on the amount of time that company employees are
expected to spend reviewing and approving the MOU, DHS estimates this
rule will cost the 5,300 establishments that must enroll in E-Verify in
order to hire OPT students about $64 each or a total of $339,200 to
review, approve, and sign the MOU.
---------------------------------------------------------------------------

\19\ The 1.4 multiplier used here to adjust base compensation
levels to account for private industry compensation costs was taken
from the BLS publication ``Employer Costs for Employee
Compensation--March 2007.''
---------------------------------------------------------------------------

New hire verification. This rule will require the affected
employers of students to verify the status of every new employee they
hire using E-Verify.\20\ To calculate this annual cost, DHS estimated
the number of new employees hired by these employers in an average
year. While there is no record of the average size of an employer of
OPT students, it is assumed that the average monthly and annual
employee hire rate for these employers is consistent with the average.
An estimate of the average number of employees may be made based on the
average number of employees per firm in industries where STEM
employment is prevalent. The 2002 Economic Census \21\ indicates that,
as of 2002, in industries where STEM employment is most prevalent, 1.7
million firms have 26.5 million employees, or an average of 16
employees per firm.\22\ According to the Bureau of Labor Statistics,
the new hires rate (number of hires to the payroll during the month as
a percent of total employment) in the industries where STEM employment
is believed to be most prevalent was about 2.5 percent in February
2008.\23\ Therefore, for 12 months, newly hired and rehired employees
amount to about 30 percent (12 months x 2.5 percent monthly hire rate)
of the total number of current employees in the STEM related
industries. For an establishment with 16 employees, that hire rate
would result in about 5 new hires per year.
---------------------------------------------------------------------------

\20\ There is no requirement that these employers verify the
immigration status of their current employees.
\21\ Available on line at http://www.census.gov/econ/census02/guide/SUBSUMM.HTM.
\22\ Information: 3,736,061 employees, 137,678 establishments.
Professional, Scientific, and Technical Services: 7,243,505
employees, 771,305 establishments. Educational Services: 430,164
employees, 49,319 establishments. Health Care and Social Assistance:
15,052,255 workers, 704,526 establishments.
\23\ Bureau of Labor Statistics, Job Openings and Labor Turnover
Survey. Available on line at http://www.bls.gov/web/ceshighlights.pdf.
---------------------------------------------------------------------------

To verify new hires, the E-Verify participant company must submit a
query before the end of three business days after the new hire's actual
start

[[Page 18953]]

date. Based on the number of queries and case resolutions for the
current E-Verify program from January through June of 2007, the time
required to enter this information into the computer and submit the
query, and the costs incurred by an employee to challenge occurrences
of tentative nonconfirmation, DHS has calculated the combined costs
incurred by an employer and prospective employee to verify each new
hire to be about $6.36 per new hire. Thus, the annual public cost
incurred for verification of new hires for the 5,300 employers affected
by this rule is around $168,540 (5,300 x 5 x $6.36).
In summary, the total public cost of this rule requiring employers
of F-1 students participating in the 17-month OPT extension to enroll
in E-Verify will be $1,240,000 ($901,000 + $339,200) up front and
$168,540 per year thereafter.
Government Costs
This rule requires no additional outlays of DHS funds. The
requirements of this rule and the associated benefits are funded by
fees collected from persons requesting these benefits. The fees are
deposited into the Immigration Examinations Fee Account. These fees are
used to fund the full cost of processing immigration and naturalization
benefit applications and petitions and associated support services.
Public Benefit
Improved U.S. competitive position for STEM students and employees.
The primary benefits to be derived from allowing the extension of OPT
relates to maintaining and improving the United States competitive
position in the market. Over the past 20 years, there has been a
sustained globalization of the STEM labor force, according to the
National Science Board's ``Science and Engineering Indicators 2008.''
Increased globalization has turned the labor market for STEM workers
into a worldwide marketplace.\24\ Today, investment crosses borders in
search of available talent, talented people cross borders in search of
work, and employers recruit internationally. Slowing of the growth of
the science and engineering labor force in the United States could
affect both technological change and economic growth. As a result, the
United States must be successful in the increasing international
competition for immigrant and temporary nonimmigrant scientists and
engineers. The employment-based immigrant visa ceiling makes it
difficult for foreign students to stay in the United States permanently
after their studies because long delays in the immigrant visa process
usually makes it impractical to be directly hired with an immigrant
visa. Though obtaining a nonimmigrant work visa like an H-1B is a much
quicker process, the oversubscription of the H-1B program makes
obtaining even temporary work authorization an uncertain prospect.
Studies show that the most talented employees worldwide are
increasingly unwilling to tolerate the long waits and uncertainty
entailed in coming to work temporarily in or immigrating to the United
States. Instead, they are going to Europe, Canada, Australia and other
countries where knowledge workers face fewer immigration
difficulties.\25\ This rule will help ease this difficulty by adding an
estimated 12,000 OPT students to the STEM-related workforce. With only
65,000 H-1B visas available annually, this number represents a
significant expansion of the available pool of skilled workers.
---------------------------------------------------------------------------

\24\ National Science Foundation, National Science Board,
``Science and Engineering Indicators 2008.'' Available on line at
http://www.nsf.gov/statistics/seind08/.
\25\ E.g. Hansen, Fay, ``Green Card Recruiting,'' Workforce
Management, Recruiting and Staffing (Jan. 2007). Available on line
at http://www.workforce.com/section/06/feature/24/64/42/index.html.
---------------------------------------------------------------------------

Student's quality of life. The most significant qualitative
improvement made by this rule is the enhancement related to improving
the quality of life for participating students by making available an
extension of OPT status for up to 17 months for certain students
following post-completion OPT. Additionally, the changes to the cap gap
provision for F-1 students will allow up to 10,000 students to remain
in the United States and work while waiting to become an H-1B worker.
These and similar changes made by this rule will significantly enhance
the experience of the student who participates in the program by
potentially allowing them more time and flexibility while considering
employment in the United States. Students should experience much less
stress about their need to comply with tight time frames or risk being
out of status. These changes will result an increase in the
attractiveness of the program.
Conclusion
This rule will cost students approximately $1.49 million per year
in additional information collection burdens, $4,080,000 in fees, and
cost employers $1,240,000 to enroll in E-Verify and $168,540 per year
thereafter to verify the status of new hires. However, this rule will
increase the availability of qualified workers in science, technology,
engineering, and mathematical fields; reduce delays that place U.S.
employers at a disadvantage when recruiting foreign job candidates;
increase the quality of life for participating students, and increase
the integrity of the student visa program. Thus, DHS has determined
that the benefits of this rule to the public exceed its costs.

E. Executive Order 13132

This rule will not have a substantial direct effect on the states,
on the relationship between the national government and the states, or
on the distribution of power and responsibilities among the various
levels of government. Therefore, in accordance with section 6 of
Executive Order 13132, DHS has determined that this rule does not have
sufficient federalism implications to warrant the preparation of a
federalism summary impact statement.

F. Executive Order 12988 Civil Justice Reform

This rule meets the applicable standards set forth in sections 3(a)
and 3(b)(2) of Executive Order 12988.

G. Paperwork Reduction Act

Under the Paperwork Reduction Act of 1995, Public Law 104-13, all
departments are required to submit to OMB, for review and approval, any
reporting requirements inherent in a rule. To implement the changes
discussed in this rulemaking, USCIS is making conforming amendments to
Form I-765, Application for Employment Authorization (current OMB
Control No. 1615-0040), which is used by students to apply for pre- and
post-completion OPT. Specifically, this form is being amended to add a
new question 17, asking STEM students to provide their degree,
the name of their employer (as listed in E-Verify), and their
employer's E-Verify Company identification number or, if the employer
is using a Designated Agent to perform the E-Verify queries, a valid E-
Verify Client Company identification number. The collection of this
information is necessary to ensure that F-1 students seeking a 17-month
extension of their post-completion OPT are, in fact, eligible to do so.
E-Verify has been approved by OMB under OMB Control No. 1615-0092.
USCIS will submit an OMB Correction Worksheet (OMB 83-C), increasing
the number of respondents, for both Form I-765 and E-Verify (OMB
Control No. 1615-0092).
To implement the changes discussed in this rulemaking, SEVP is
making

[[Page 18954]]

conforming amendments to its information collection for the Student and
Exchange Visitor Information System (SEVIS; current OMB Control No.
1653-0038). This authorization encompasses all data collected to meet
the requirements of the Student and Exchange Visitor Program (SEVP).
This further includes completion of Forms I-20, Certificate of
Eligibility for Nonimmigrant Student Status, which are updated and
generated by SEVIS in the recommendation for employment authorization
and tracking of activity. The reporting requirements in this rule will
impact 3% of the total number of F-1 students, those who are eligible
for the 29-month OPT option. Additions to the reporting burden include:
DSO verification of student qualification for OPT and
issuance of a Form I-20 recommending the 17-month extension of OPT for
STEM students (five minutes per student applicant);
Semiannual verification of student and employment
information in SEVIS for all students with an approved 17-month
extension of OPT (five minutes for both the student and a DSO per
verification); and
Updates to SEVIS records of about 25% of the students with
an approved 17-month OPT who report a change in student name, student
address, employer name, or employer address (five minutes for both the
students and a DSO per verification).
Updates by the DSO to SEVIS based on an estimated 600
reports by an employer that the student's employment has ended (five
minutes for the reporting DSO).

The aggregate annual increased burden related to all students on
extended OPT is 12.5 minutes per student and 20 minutes per supporting
DSO. Accordingly, SEVP has submitted the amended Supporting Statement,
along with an OMB Correction Worksheet (OMB 83-C), increasing the
number of respondents, the annual reporting burden hours and annual
reporting burden cost for submitting.

List of Subjects

8 CFR Part 214

Administrative practice and procedure, Aliens, Employment, Foreign
officials, Health professions, Reporting and recordkeeping
requirements, Students.

8 CFR Part 274a

Administrative practice and procedure, Aliens, Employment,
Penalties, Reporting and recordkeeping requirements.

0
For the reasons set forth in the preamble, 8 CFR part 214 is amended as
follows:

PART 214--NONIMMIGRANT CLASSES

0
1. The authority citation for part 214 continues to read as follows:

Authority: 8 U.S.C. 1101, 1102, 1103, 1182, 1184, 1186a, 1187,
1221, 1281, 1282, 1301-1305 and 1372; section 643, Pub. L. 104-208,
110 Stat. 3009-708; Pub. L. 106-386, 114 Stat. 1477-1480; section
141 of the Compacts of Free Association with the Federated States of
Micronesia and the Republic of the Marshall Islands, and with the
Government of Palau, 48 U.S.C. 1901 note, and 1931 note,
respectively; 8 CFR part 2.

0
2. Amend Sec. 214.2(f) by:
0
a. Revising paragraph (f)(5)(vi); and
0
b. Revising paragraphs (f)(10)(ii)(A), (C), and (E); and by;
0
c. Revising paragraphs (f)(11) and (f)(12).
The revisions read as follows:

Sec. 214.2 Special requirements for admission, extension and
maintenance of status.

* * * * *
(f) * * *
(5) * * *
* * * * *
(vi) Extension of duration of status and grant of employment
authorization.
(A) The duration of status, and any employment authorization
granted under 8 CFR 274a.12(c)(3)(i)(B) and (C), of an F-1 student who
is the beneficiary of an H-1B petition and request for change of status
shall be automatically extended until October 1 of the fiscal year for
which such H-1B visa is being requested where such petition:
(1) Has been timely filed; and
(2) States that the employment start date for the F-1 student is
October 1 of the following fiscal year.
(B) The automatic extension of an F-1 student's duration of status
and employment authorization under paragraph (f)(5)(vi)(A) of this
section shall immediately terminate upon the rejection, denial, or
revocation of the H-1B petition filed on such F-1 student's behalf.
(C) In order to obtain the automatic extension of stay and
employment authorization under paragraph (f)(5)(vi)(A) of this section,
the F-1 student, according to 8 CFR part 248, must not have violated
the terms or conditions of his or her nonimmigrant status.
(D) An automatic extension of an F-1 student's duration of status
under paragraph (f)(5)(vi)(A) of this section also applies to the
duration of status of any F-2 dependent aliens.
* * * * *
(10) * * *
(ii) Optional practical training.
(A) General. Consistent with the application and approval process
in paragraph (f)(11) of this section, a student may apply to USCIS for
authorization for temporary employment for optional practical training
directly related to the student's major area of study. The student may
not begin optional practical training until the date indicated on his
or her employment authorization document, Form I-766. A student may be
granted authorization to engage in temporary employment for optional
practical training:
(1) During the student's annual vacation and at other times when
school is not in session, if the student is currently enrolled, and is
eligible for registration and intends to register for the next term or
session;
(2) While school is in session, provided that practical training
does not exceed 20 hours a week while school is in session; or
(3) After completion of the course of study, or, for a student in a
bachelor's, master's, or doctoral degree program, after completion of
all course requirements for the degree (excluding thesis or
equivalent). Continued enrollment, for the school's administrative
purposes, after all requirements for the degree have been met does not
preclude eligibility for optional practical training. A student must
complete all practical training within a 14-month period following the
completion of study, except that a 17-month extension pursuant to
paragraph (f)(10)(ii)(C) of this section does not need to be completed
within such 14-month period.
* * * * *
(C) 17-month extension of post-completion OPT for students with a
science, technology, engineering, or mathematics (STEM) degree.
Consistent with paragraph (f)(11)(i)(C) of this section, a qualified
student may apply for an extension of OPT while in a valid period of
post-completion OPT. The extension will be for an additional 17 months,
for a maximum of 29 months of OPT, if all of the following requirements
are met.
(1) The student has not previously received a 17-month OPT
extension after earning a STEM degree.
(2) The degree that was the basis for the student's current period
of OPT is a bachelor's, master's, or doctoral degree in one of the
degree programs on the current STEM Designated Degree Program List,
published on the SEVP Web site at http://www.ice.gov/sevis.

[[Page 18955]]

(3) The student's employer is registered in the E-Verify program,
as evidenced by either a valid E-Verify company identification number
or, if the employer is using a designated agent to perform the E-Verify
queries, a valid E-Verify client company identification number, and the
employer is a participant in good standing in the E-Verify program, as
determined by USCIS.
(4) The employer agrees to report the termination or departure of
an OPT employee to the DSO at the student's school or through any other
means or process identified by DHS if the termination or departure is
prior to end of the authorized period of OPT. Such reporting must be
made within 48 hours of the event. An employer shall consider a worker
to have departed when the employer knows the student has left the
employment or if the student has not reported for work for a period of
5 consecutive business days without the consent of the employer,
whichever occurs earlier.
(D) Duration of status while on post-completion OPT. For a student
with approved post-completion OPT, the duration of status is defined as
the period beginning when the student's application for OPT was
properly filed and pending approval, including the authorized period of
post-completion OPT, and ending 60 days after the OPT employment
authorization expires (allowing the student to prepare for departure,
change educational levels at the same school, or transfer in accordance
with paragraph (f)(8) of this section).
(E) Periods of unemployment during post-completion OPT. During
post-completion OPT, F-1 status is dependent upon employment. Students
may not accrue an aggregate of more than 90 days of unemployment during
any post-completion OPT carried out under the initial post-completion
OPT authorization. Students granted a 17-month OPT extension may not
accrue an aggregate of more than 120 days of unemployment during the
total OPT period comprising any post-completion OPT carried out under
the initial post-completion OPT authorization and the subsequent 17-
month extension period.
(11) OPT application and approval process.
(i) Student responsibilities. A student must initiate the OPT
application process by requesting a recommendation for OPT from his or
her DSO. Upon making the recommendation, the DSO will provide the
student a signed Form I-20 indicating that recommendation.
(A) Application for employment authorization. The student must
properly file a Form I-765, Application for Employment Authorization,
with USCIS, accompanied by the required fee for the Form I-765, and the
supporting documents, as described in the form's instructions.
(B) Filing deadlines for pre-completion OPT and post-completion
OPT.
(1) Students may file a Form I-765 for pre-completion OPT up to 90
days before being enrolled for one full academic year, provided that
the period of employment will not start prior to the completion of the
full academic year.
(2) For post-completion OPT, the student must properly file his or
her Form I-765 up to 90 days prior to his or her program end-date and
no later than 60 days after his or her program end-date. The student
must also file the Form I-765 with USCIS within 30 days of the date the
DSO enters the recommendation for OPT into his or her SEVIS record.
(C) Applications for 17-month OPT extension. A student meeting the
eligibility requirement in paragraph (f)(10)(ii)(C) of this section may
file for a 17-month extension of employment authorization by filing
Form I-765, Application for Employment Authorization, with the
appropriate fee, prior to the expiration date of the student's current
OPT employment authorization. If a student timely and properly files an
application for a 17-month OPT extension, but the Form I-766,
Employment Authorization Document, currently in the student's
possession, expires prior to the decision on the student's application
for 17-month OPT extension, the student's Form I-766 is extended
automatically pursuant to the terms and conditions specified in 8 CFR
274a.12(b)(6)(iv).
(D) Start of employment. A student may not begin employment prior
to the approved starting date on his or her employment authorization
except as noted in paragraph (f)(11)(i)(C) of this section. A student
may not request a start date that is more than 60 days after the
student's program end date. Employment authorization will begin on the
date requested or the date the employment authorization is adjudicated,
whichever is later.
(ii) DSO responsibilities. A student needs a recommendation from
his or her DSO in order to apply for OPT. When a DSO recommends a
student for OPT, the school assumes the added responsibility for
maintaining the SEVIS record of that student for the entire period of
authorized OPT, consistent with paragraph (f)(12) of this section.
(A) Prior to making a recommendation, the DSO must ensure that the
student is eligible for the given type and period of OPT and that the
student is aware of his or her responsibilities for maintaining status
while on OPT. Prior to recommending a 17-month OPT extension, the DSO
must certify that the student's degree, as shown in SEVIS, is a
bachelor's, master's, or doctorate degree with a degree code that is on
the current STEM Designated Degree Program List.
(B) The DSO must update the student's SEVIS record with the DSO's
recommendation for OPT before the student can apply to USCIS for
employment authorization. The DSO will indicate in SEVIS whether the
employment is to be full-time or part-time, and note in SEVIS the start
and end date of employment.
(C) The DSO must provide the student with a signed, dated Form I-20
indicating that OPT has been recommended.
(iii) Decision on application for OPT employment authorization.
USCIS will adjudicate the Form I-765 and, if approved, issue an EAD on
the basis of the DSO's recommendation and other eligibility
considerations.
(A) The employment authorization period for post-completion OPT
begins on the date requested or the date the employment authorization
application is approved, whichever is later, and ends at the conclusion
of the remaining time period of post-completion OPT eligibility. The
employment authorization period for the 17-month OPT extension begins
on the day after the expiration of the initial post-completion OPT
employment authorization and ends 17 months thereafter, regardless of
the date the actual extension is approved.
(B) USCIS will notify the applicant of the decision and, if the
application is denied, of the reason or reasons for the denial.
(C) The applicant may not appeal the decision.
(12) Reporting while on optional practical training.
(i) General. An F-1 student who is authorized by USCIS to engage in
optional practical training (OPT) employment is required to report any
change of name or address, or interruption of such employment to the
DSO for the duration of the optional practical training. A DSO who
recommends a student for OPT is responsible for updating the student's
record to reflect these reported changes for the duration of the time
that training is authorized.

[[Page 18956]]

(ii) Additional reporting obligations for students with an approved
17-month OPT. Students with an approved 17-month OPT extension have
additional reporting obligations. Compliance with these reporting
requirements is required to maintain F-1 status. The reporting
obligations are:
(A) Within 10 days of the change, the student must report to the
student's DSO a change of legal name, residential or mailing address,
employer name, employer address, and/or loss of employment.
(B) The student must make a validation report to the DSO every six
months starting from the date the extension begins and ending when the
student's F-1 status ends, the student changes educational levels at
the same school, or the student transfers to another school or program,
or the 17-month OPT extension ends, whichever is first. The validation
is a confirmation that the student's information in SEVIS for the items
in listed in paragraph (f)(12)(ii)(A) of this section is current and
accurate. This report is due to the student's DSO within 10 business
days of each reporting date.

0
3. Amend Sec. 214.3 to add paragraph (g)(3)(ii)(F) as follows:

Sec. 214.3 Approval of schools for enrollment of F and M
nonimmigrants.

* * * * *
(g) * * *
(3) * * *
(ii) * * *
(F) For F-1 students authorized by USCIS to engage in a 17-month
extension of OPT,
(1) Any change that the student reports to the school concerning
legal name, residential or mailing address, employer name, or employer
address; and
(2) The end date of the student's employment reported by a former
employer in accordance with Sec. 214.2(f)(10)(ii)(C)(4).
* * * * *

PART 274a--CONTROL OF EMPLOYMENT OF ALIENS

0
4. The authority citation for part 274a continues to read as follows:

Authority: 8 U.S.C. 1101, 1103, 1324a; 8 CFR part 2; Pub. L.
101-410, 104 Stat. 890, as amended by Pub. L. 104-134, 110 Stat.
1321.

0
5. Amend Sec. 274a.12 by:
0
a. Adding paragraph (b)(6)(iv) and (v); and
0
b. Revising paragraph (c)(3).
The revisions read as follows:

Sec. 274a.12 Classes of aliens authorized to accept employment.

(b) * * *
(6) * * *
(iv) A Form I-766, ``Employment Authorization Document,'' under 8
CFR 274a.12(c)(3)(i)(C) based on a 17-month STEM Optional Practical
Training extension, and whose timely filed Form I-765, ``Application
for Employment Authorization,'' is pending and Form I-766 issued under
8 CFR 274a.12(c)(3)(i)(B) has expired. Employment is authorized
beginning on the expiration date of Form I-766 issued under 8 CFR
274a.12(c)(3)(i)(B) and ending on the date of USCIS' written decision
on Form I-765, but not to exceed 180 days; or
(v) Or pursuant to 8 CFR 214.2(h) is seeking H-1B nonimmigrant
status and whose duration of status and employment authorization have
been extended pursuant to 8 CFR 214.2(f)(5)(vi).
* * * * *
(c) * * *
(3) A nonimmigrant (F-1) student who:
(i)(A) Is seeking pre-completion practical training pursuant to 8
CFR 214.2(f)(10)(ii)(A)(1)-(2);
(B) Is seeking authorization to engage in post-completion Optional
Practical Training (OPT) pursuant to 8 CFR 214.2(f)(10)(ii)(A)(3); or
(C) Is seeking a 17-month STEM OPT extension pursuant to 8 CFR
214.2(f)(10)(ii)(C);
* * * * *

Dated: April 2, 2008.
Michael Chertoff,
Secretary.
[FR Doc. E8-7427 Filed 4-7-08; 8:45 am]
BILLING CODE 4410-10-P