[Federal Register Volume 77, Number 92 (Friday, May 11, 2012)]
[Rules and Regulations]
[Pages 27593-27612]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-11253]


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DEPARTMENT OF STATE

22 CFR Part 62

RIN 1400-AD14
[Public Notice 7875]


Exchange Visitor Program--Summer Work Travel

AGENCY: Department of State.

ACTION: Interim final rule with request for comment.

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SUMMARY: The Department of State (Department) published an initial 
interim final rule with request for comment on April 26, 2011) (2011 
IFR) to amend the regulatory requirements of the Summer Work Travel 
category of the Exchange Visitor Program. In this second interim final 
rule (2012 IFR), the Department expands upon and provides guidance on 
additional regulatory changes and bolsters portions of the regulations 
to both further to protect the health, safety, and welfare of Summer 
Work Travel Program participants and to reinforce the cultural exchange 
aspects of the Program to promote mutual understanding in accordance

[[Page 27594]]

with the Mutual Educational and Cultural Exchange Act of 1961. The 
Department has reviewed the comments submitted in response to the 2011 
IFR, and this rule reflects those comments. Also, this 2012 IFR 
reinforces the cultural exchange aspect of the Program through the 
addition of a cultural component, and provides additional protection to 
program participants by describing types of job placements that are 
appropriate and by expanding the list of jobs prohibited under the 
Summer Work Travel Program. The enforcement of parts of this IFR is 
delayed until November 1, 2012.

DATES: This rule is effective May 11, 2012, with the exception of 22 
CFR 62.32(h)(11) that will go into effect November 1, 2012. The 
Department will accept written comments from the public up to 60 days 
from July 10, 2012.

ADDRESSES: You may submit comments by any of the following methods:
     Online: Persons with access to the Internet may view this 
notice and provide comments by going to the regulations.gov Web site 
and searching on its RIN (1400-AD14) at: http://www.regulations.gov/index.cfm.
     Mail (paper, disk, or CD-ROM submissions): U.S. Department 
of State, Office of Designation, SA-5, Floor 5, 2200 C Street NW., 
Washington, DC 20522-0505.
     Email: [email protected]. You must include the RIN 
(1400-AD14) in the subject line of your message.

FOR FURTHER INFORMATION CONTACT: Robin J. Lerner, Deputy Assistant 
Secretary for Private Sector Exchange, U.S. Department of State, SA-5, 
Floor 5, 2200 C Street NW., Washington, DC 20522-0505; phone (202) 632-
2805; fax (202) 632-6442.

SUPPLEMENTARY INFORMATION: 

Executive Summary

    Statement of Need. In recent years, the work component of the 
Summer Work Travel Program has too often overshadowed the core cultural 
component necessary for the Program to be consistent with the 
Fulbright-Hays Act. In addition, there have been complaints regarding 
job placements, work conditions, and participant accommodations. As a 
result, the Department initiated a comprehensive review of the Summer 
Work Travel Program in mid-2010, and issued the 2011 IFR based on this 
review. However, events that occurred in the summer of 2011 confirmed 
to the Department that it needed to enhance its scrutiny of the Summer 
Work Travel Program and take additional steps to amend regulations to 
protect program participants.
    The Department is keenly aware, however, that the salutary foreign 
affairs goals of the Exchange Visitor Program, including the Summer 
Work Travel Program can be seriously jeopardized, when even a single 
participant has a harmful or abusive exchange experience, or is 
inappropriately placed without due regard for the core cultural 
requirements and intended benefits of the Program. Therefore, through 
this second IFR, the Department seeks to continue: (i) Reforming the 
Summer Work Travel Program; (ii) ensuring that the Program better 
protects the health, safety, and welfare of program participants; and 
(iii) fortifying the Program's prestige as a world class U.S. public 
diplomacy initiative.
    Statement of Legal Authority. The Exchange Visitor Program (of 
which the Summer Work Travel Program is one of 15 categories of program 
types) was authorized by the Mutual Educational and Cultural Exchange 
Act of 1961 (Pub. L. 87-256, 75 Stat. 527) (Fulbright-Hays Act or Act) 
and implemented through 22 CFR part 62. Enacted by the 87th United 
States Congress on September 21, 1961, the Act's stated purpose was 
``to increase mutual understanding between the people of the United 
States and the people of other countries by means of educational and 
cultural exchange; to strengthen the ties which unite us with other 
nations by demonstrating the educational and cultural interests, 
developments, and achievements of the people of the United States and 
other nations, and the contributions being made toward a peaceful and 
more fruitful life for people throughout the world. * * *'' In the half 
century since the Act's passage, millions of people--program 
participants, Americans with whom they interact, and friends and family 
of the participants with whom they share their experiences upon 
returning home--have benefitted from the mutual understanding and 
peaceful relations that can derive best from such person-to-person 
contact. The Summer Work Travel Program embodies and carries forward 
the stated purpose and intent of the Act.
    Provisions of the 2011 IFR. The 2011 IFR presented four major 
changes (and several minor changes) to the Summer Work Travel Program 
regulations that were designed to strengthen sponsors' oversight of 
both their program participants and the third parties who assist them 
in performing the core administrative functions of the Exchange Visitor 
Program. Those changes were:
    1. Sponsors were required to vet and confirm the validity of all 
host employers and fully vet all job offers;
    2. Only Summer Work Travel Program participants from countries that 
participated in the Visa Waiver Program could depart their home 
countries without pre-placed jobs;
    3. Sponsors were required to fully vet all third parties who they 
engaged to assist in performing certain enumerated core functions; and
    4. Sponsors were required to contact active program participants on 
a monthly basis to monitor both their welfare and their geographical 
physical location.

However, in spite of these changes, events that occurred in the summer 
of 2011 confirmed the need to take additional steps to amend the 
regulations that safeguard program participants.
    Changes to the 2011 IFR. Following the publication of the 2011 IFR, 
the Department reviewed comments received from 35 parties. Effective 
immediately, this rule makes further changes to some provisions 
introduced in the 2011 IFR to reflect those comments, clarify 
ambiguities, and make necessary corrections. These changes include:
    1. The Department corrected two inadvertent changes to the 
regulations: Sponsors must continue to offer participants assistance in 
finding job placements starting one week (versus two) after 
participants initiate their job searches; and it reinserted language 
prohibiting employers from paying participants less than their American 
counterparts;
    2. Sponsors are not required to maintain listings of bona fide job 
offers (but must offer participants reasonable assistance in finding 
new jobs);
    3. Sponsors are not required to verify the Employee Identification 
Numbers (EIN) of host employers (although they must obtain them);
    4. Sponsors must obtain evidence that potential host employers are 
registered to do business in the jurisdictions where participants will 
be placed;
    5. Sponsors must input job titles and sites of activity in the 
Student and Exchange Visitor Information System (SEVIS) prior to 
participants' visa interviews (and not prior to issuing Forms DS-2019);
    6. Host employers may not assist sponsors in the monthly monitoring 
of participants; and
    7. Acknowledging the Department does not have jurisdiction over 
host employers, the ``host employer obligation'' section is renamed 
``host

[[Page 27595]]

employer cooperation'' and refocused to urge sponsors to work only with 
host employers willing to make good faith efforts to comply with the 
requirements therein.
    The provisions of the 2011 IFR, as amended by the 2012 IFR, are 
considered final upon publication of this 2012 IFR. The Department is 
not soliciting further notice and comment on these provisions.
    New Provisions in the 2012 IFR. Additional changes to the Summer 
Work Travel Program regulations presented in the 2012 IFR allows the 
U.S. government to better regulate sponsors in order to protect 
participants, the program itself, and U.S. communities that support 
Summer Work Travel participants. The 2012 IFR implements new 
regulations to expand sponsors' obligations with respect to the 
cultural component mandated by the Act, clarify characteristics of jobs 
that are consistent with the purpose of the Act, identify jobs that are 
inconsistent with the purpose of the Act, and otherwise provide 
guidance to sponsors to ensure appropriate administration of the Summer 
Work Travel Program, with one exception, starting with the 2012 summer 
season. The 2012 IFR clarifies several issues that commenting parties 
raised:
    1. The requirement that participants contact sponsors within ten 
days following their arrivals does not conflict with the requirement 
that sponsors validate SEVIS records within 30 days of participants' 
arrivals;
    2. Individuals enrolled full time in on-line universities are not 
eligible for the program;
    3. Sponsors and foreign entities cannot provide host employers cash 
or gift incentives (though they may host job fairs);
    4. Sponsors must provide itemized annual cost schedules for all 
fees participants pay for program participation (including fees charged 
by foreign entities);
    5. Sponsors must terminate (versus end) the programs of 
participants who do not comply with certain requirements that sponsors 
are obligated to enumerate during program orientation;
    6. Sponsor outreach to participants must be answered in order for 
the contacts to be considered monthly monitoring;
    7. Sponsors must annually vet host employers and third parties 
(foreign and domestic) and each season must reconfirm the number of 
jobs available with each host employer; and
    8. Sponsors must vet initial, subsequent, and additional jobs 
before participants start work.
    A significant enhancement presented in the 2012 IFR is the refocus 
of the program on the cultural experience of participants, which in 
recent years has been overshadowed by the goal of income production. In 
addition, the 2012 IFR makes changes to better protect the health, 
safety, and welfare of participants. To this end, the 2012 IFR makes 
several changes including adding the following requirements:
    1. Sponsors must provide information to incoming participants 
explaining the cultural component of the Summer Work Travel Program, 
including guidance on how best to experience U.S. culture and/or 
descriptions of cultural opportunities that sponsors have arranged;
    2. Job placements must be seasonal or temporary and must provide 
opportunities for participants to interact regularly with U.S. citizens 
and experience U.S. culture during the work portion (i.e., not travel 
portion) of their programs;
    3. In addition to the job prohibitions expanded in the 2011 IFR, 
sponsors must not place participants:
    a. With employers that fill non-seasonal or non-temporary job 
openings with participants with staggered vacation schedules;
    b. In positions that require licensing or as operators or drivers 
of vehicles or vessels for which drivers' licenses are required 
regardless of whether they carry passengers or not;
    c. In jobs for which there is another specific J visa category;
    d. In positions requiring work hours that fall predominantly 
between 10:00 p.m. and 6:00 a.m.;
    e. In positions declared hazardous to youth by the Secretary of 
Labor at Subpart E of 29 CFR part 570;
    f. In positions that require sustained physical contact with other 
people and/or adherence to the Center for Disease Control and 
Prevention's Universal Blood and Body Fluid Precautions guidelines 
(e.g., body piercing, tattooing, massage, manicure);
    g. In positions that are substantially commission-based and thus do 
not guarantee that participants will be paid minimum wage in accordance 
with federal and state laws;
    h. In positions involved in gaming and gambling that include direct 
participation in wagering and/or betting;
    i. In positions in chemical pest control, warehousing, catalogue/
online order distribution centers;
    j. In positions with travelling fairs or itinerant concessionaires; 
and
    k. After November 1, 2012, in positions in the North American 
Industry Classification System's (NAICS) Goods-Producing Industries 
occupational categories industry sectors 11, 21, 23, 31-33 (set forth 
at http://www.bls.gov/iag/tgs/iag_index_naics.htm).
    Sponsors are also required to take more active roles in ensuring 
that participants have access to suitable, affordable, and safe housing 
and reliable and affordable transportation between their residences and 
worksites.
    The 2012 IFR also includes new protections for U.S. workers. Each 
season, sponsors must confirm that the host employers with which they 
intend to place participants:
    1. Will not displace U.S. workers at worksites where they place 
program participants;
    2. Have not experienced layoffs in the past 120 days; and
    3. Do not have workers on lockout or on strike.
    The Department seeks comment on the new provisions presented in the 
2012 IFR.

Background

    On April 26, 2011, the Department of State (Department) issued an 
interim final rule with request for comment modifying the regulations 
of the Summer Work Travel category of the Exchange Visitor Program 
(2011 IFR) (see 76 FR 23177). Those regulations became effective on 
July 15, 2011. The Department has reviewed the comments of 35 parties, 
and this rule modifies the regulations to reflect those comments. 
Effective immediately, this rule makes further changes on an interim 
final basis to the Summer Work Travel Program regulations and requests 
comments.
    The Department is aware of and appreciates the efforts the sponsor 
community has undertaken to adjust in a short timeframe to the new 
regulatory model presented in the 2011 IFR. It is imperative, however, 
to amend further the Summer Work Travel Program regulations before the 
next large wave of participants arrives. The changes included in the 
2012 IFR bear most directly on the health, safety, and welfare of the 
participants and reinforce the cultural exchange aspects of the Program 
to promote mutual understanding in accordance with the Mutual 
Educational and Cultural Exchange Act of 1961, as amended; 22 U.S.C. 
2451 et seq. (Fulbright-Hays Act or Act). The Department will propose 
other modifications to the Summer Work Travel Program later in 2012 
through a Notice of Proposed Rulemaking (NPRM).

[[Page 27596]]

    The focus of the 2012 IFR is three-fold. First, the Department will 
introduce new requirements to remind sponsors of the centrality of the 
cultural component of the Summer Work Travel Program and, in this 
regard, prescribe characteristics of certain job placements and types 
of cultural activities that can appropriately promote mutual 
understanding, a core purpose of the Fulbright-Hays Act. Second, the 
Department will discuss changes it adopted in the 2011 IFR in light of 
the comments it received and will announce the final regulatory changes 
associated with that effort. Finally, it will implement new 
regulations, most of which are effective with the publication of this 
rule, to expand sponsors' obligations with respect to the cultural 
component, clarify characteristics of jobs that are consistent with the 
purpose of the Act, identify jobs that are inconsistent with the 
purpose of the Act, and otherwise provide guidance to sponsors to 
ensure appropriate administration of the Summer Work Travel Program 
starting with the 2012 summer season, during which roughly 80 percent 
of all program participants come to the United States.
    Summer Work Travel Program. The Summer Work Travel Program allows 
foreign post-secondary students (mostly between the ages of 18 and 30) 
to come to the United States--for a maximum of four months--during 
their major academic breaks to travel and work in largely unskilled 
jobs. For nearly 50 years, this category of the Exchange Visitor 
Program has been a part of U.S. public diplomacy efforts, under the 
auspices of the Fulbright-Hays Act. As reflected in a Statement of 
Policy dated March 28, 1996 (see 61 FR 13760), this category of the 
Exchange Visitor Program was implemented to open the program to those 
persons who were otherwise financially unable to visit the United 
States. During the initial 50 years of the program, more than one 
million foreign students have participated in the Sumer Work Travel 
Program. The popularity of this Program--both with participants and 
U.S. embassies and consulates abroad as part of their public diplomacy 
efforts--arises from the participants' ability to enjoy cultural 
exchange experiences while offsetting at least a portion of their 
travel costs through temporary employment in the United States. 
However, despite its popularity, the Program is not without challenges.
    In recent years, the work component has too often overshadowed the 
core cultural component necessary for the Summer Work Travel Program to 
be consistent with the intent of the Fulbright-Hays Act. Also, the 
Department learned that criminal organizations were involving 
participants in incidents relating to the illegal transfer of cash, the 
creation of fraudulent businesses, and violations of immigration law. 
There also were increasing numbers of complaints related to the 
Program, such as reports of improper or unsafe job placements, 
fraudulent job offers, post-arrival job cancellations, inappropriate 
work hours, and problems regarding housing and transportation.
    In response, the Department initiated a comprehensive review of the 
Summer Work Travel Program in mid-2010, intended both to enhance the 
Department's governance of the designated Summer Work Travel Program 
sponsors and to tighten the regulations these sponsors must follow. To 
this end, the Department has been re-evaluating the regulations and 
making changes to the Summer Work Travel Program regulatory model. In 
January 2011, following a series of meetings with law enforcement 
agencies, employers, industry associations, and sponsors, the 
Department adopted a pilot program for Summer Work Travel Program 
participants from certain countries with a higher prevalence of 
problems (Pilot Program). The second step to safeguarding and 
strengthening the Summer Work Travel Program was incorporating Pilot 
Program concepts as key elements of the 2011 IFR. The 2011 IFR 
presented four major changes (and several minor changes) to the Summer 
Work Travel Program regulations that were designed to strengthen 
sponsors' oversight of both their program participants and third 
parties who assist them in performing core functions that are inherent 
in the administration of the Exchange Visitor Program (i.e., 
participant screening, selection, orientation, placement, and 
monitoring; and the promotion of mutual understanding). First, sponsors 
were required to vet and confirm the legitimacy of all host employers 
and fully vet all job offers. Second, only Summer Work Travel Program 
participants from countries that participated in the Visa Waiver 
Program could depart their home countries without pre-placed jobs. 
Third, sponsors were required to vet fully all third parties whom they 
engaged to assist in performing certain enumerated core functions. 
Finally, sponsors were required to contact active program participants 
on a monthly basis to monitor both their welfare and their geographical 
physical location. The incorporation of these concepts into the overall 
Summer Work Travel Program regulations in the 2011 IFR formally ended 
the separate Pilot Program.
    Events that occurred in the summer of 2011 confirmed the 
Department's initial assessment that it needed to enhance further its 
scrutiny of the Summer Work Travel Program and take additional steps to 
amend regulations that safeguard program participants. While the 2011 
IFR established procedures for confirming the existence of proposed job 
placements, it did not provide guidance for assessing the suitability 
of job offers or preventing the displacement of U.S. workers. In 
August, the Department learned of inappropriate job placements for 
Summer Work Travel Program participants who were staffing a packaging 
plant. Summer Work Travel Program participants: (1) Were concentrated 
in single locations for long hours in jobs that provided little or no 
opportunity to interact with U.S. citizens; (2) were exposed to 
workplace safety and health hazards; and (3) were subjected to 
predatory practices through wage deductions for housing costs. These 
circumstances informed the Department that additional regulatory 
changes were necessary in order better to regulate the sponsors to 
protect participants, the program itself and U.S. communities that 
support Summer Work Travel participants.
    As part of the overall Program review, in September 2011, the 
Department announced and initiated on-site reviews of 14 Summer Work 
Travel Program sponsors. (See 76 FR 59182 (Sept. 23, 2011).) In 
addition to assessing sponsor compliance with the current regulations, 
these reviews allowed the Department to consult with sponsors regarding 
the impact of the 2011 IFR on their operations. The Department 
completed these site visits and is in the process of analyzing the 
results.
    Next, the Department announced a cap on the maximum number of 
Summer Work Travel Program participants for calendar year 2012 and a 
moratorium on the designation of additional organizations as sponsors 
in the Summer Work Travel Program category. (See 76 FR 68808 (Nov. 7, 
2011)) Peaking at just over 153,000 participants in 2008, the Summer 
Work Travel Program will proceed for the near future at a level not to 
exceed 109,000 participants annually. The cap is sponsor-specific and 
based on the number of participants for each sponsor with program start 
dates between January 1 and December 31, 2011 (i.e., for the calendar 
year). The Department intends to retain these restrictions until it is 
confident that the program

[[Page 27597]]

regulations are sufficient to remedy identified concerns.
    In November 2011, the Department hosted an open meeting with the 
sponsor community, including the Alliance for International Educational 
and Cultural Exchange. On December 13, 2011, the Department issued 
Guidance Directive 2011-05. See http://j1visa.state.gov/wp-content/uploads/2012/01/2011-GD05-12_13_2011Summer-Work-Travel-A-Cultural-Experience.pdf. The Department used these forums to announce its 
heightened scrutiny of the Summer Work Travel Program and its intention 
to publish new program regulations through additional rulemakings, 
including the 2012 IFR. The Department invited comments on both 
occasions. A number of sponsors criticized the Department for opting to 
modify the Summer Work Travel Program regulations through another 
interim final rule. The Department concluded that it must issue another 
interim final rule in order to promptly improve its existing regulatory 
framework given the potential impact on individual participants' 
health, safety, and well-being. The use of traditional notice and 
comment procedures would not allow for implementation of these 
important safeguards prior to the summer of 2012. Accordingly, the 
Department is making certain rule changes in the 2012 IFR and will 
publish additional modifications through NPRM procedures later this 
year. To further monitor and ensure the health, safety, and welfare of 
program participants, the Department of State is in discussion with the 
Department of Homeland Security and other federal agencies and 
enforcement authorities regarding the appropriateness of an 
information-sharing memorandum of understanding (MOU). Such MOU would 
establish guidelines and a protocol for the exchange of, analysis of, 
and appropriate action on, information indicating possible criminal 
abuse or misuse of the Summer Work Travel Program.
    Cultural exchange. The Summer Work Travel Program is intended to 
allow foreign nationals, who could not otherwise afford to visit the 
United States as tourists or students, the opportunity to experience 
U.S. culture by defraying part of their travel and living expenses by 
working while in the United States. Over time, however, some sponsors, 
participants, and host employers lost sight of the central cultural 
exchange focus of the Act. Additionally, many participants viewed the 
Program as an opportunity simply to work in jobs that allow them to 
earn more money than they would in their home countries. The Program's 
evolution did not comport with the intentions of the Act or the purpose 
of international exchange programs to increase mutual understanding. 
Accordingly, the 2012 IFR refocuses the Summer Work Travel Program 
towards the U.S. cultural experience and away from its income and labor 
opportunities.
    The cultural dimension of the Summer Work Travel Program experience 
is essential to all participants. Sponsors must consider the cultural 
component in all placement decisions. Rather than mandating specific 
types of cultural programs, however, the Department offers as guidance 
two examples of ways sponsors can meet the cultural component 
requirement. Sponsors could organize activities that acquaint 
participants with recognized features of U.S. culture and history 
(e.g., national parks, historic sites, major cities, scenic areas) and/
or offer activities that engage participants with the communities in 
which they work and live. A core presumption underlies the Department's 
renewed focus on the cultural component of the Summer Work Travel 
Program: solely work-based cultural exposure is insufficient. Only 
those sponsors that demonstrate that their Summer Work Travel Program 
participants engage in cultural exchange activities outside of their 
places of employment will qualify to be considered for biannual re-
designation.
    Summer Work Travel Program participants historically have been 
placed in a wide variety of jobs in all 50 states and the District of 
Columbia. The Department recognizes that it would be difficult, at 
best, to prescribe specific cultural activities that the current 49 
designated sponsors must offer to their program participants. With this 
in mind, the Department changes the Summer Work Travel Program 
regulations to ensure that participants are placed in jobs that are 
conducive to experiencing U.S. culture. To that end, the 2012 IFR 
enumerates criteria that sponsors must meet when approving job offers, 
and it expands the list of prohibited placements. More specifically, it 
requires sponsors to ensure participants have specific opportunities to 
interact with U.S. citizens and experience U.S. culture outside their 
workplaces.
    Many sponsors already provide cultural opportunities for their 
Summer Work Travel Program participants. The Department commends those 
sponsors and encourages them to share their ``best practices'' when 
commenting on the 2012 IFR. Sponsors must focus their placements on 
jobs that are clearly appropriate under these new regulations and that 
offer opportunities to interact with U.S. citizens. Sponsors must also 
enable regular interaction with Americans during work and non-work 
hours. For example, a significant majority of Summer Work Travel 
Program participants work in vacation areas--in or near beach 
communities, amusement parks, and campgrounds in the summer and at or 
around ski resorts in the winter. These service industry jobs provide 
routine opportunities for participants to interact with U.S. citizens--
both as customers and co-workers.
    Although the new placement criteria and prohibitions together 
establish that the participants' jobs must provide them interactions 
with U.S. citizens (e.g., co-workers, customers), such exposure during 
the course of the work-day will not satisfy the cultural requirement of 
the Summer Work Travel Program. Sponsors must intentionally plan and 
implement cultural activities to augment this quotidian exposure in 
order to be in compliance with the purpose of the Act. The Department 
understands that the more widely participants are geographically 
dispersed, however, the more difficult it may be for sponsors to 
arrange and/or monitor directly these mandatory cultural events. 
Accordingly, the Department reassesses both the types of third parties 
that sponsors may use to assist them in performing core programmatic 
functions, e.g., promoting mutual understanding, as well as the 
specific functions third parties may perform.
    Specifically, this 2012 IFR allows sponsors to enlist third parties 
to oversee cultural activities designed to expose participants to U.S. 
citizens and U.S. culture. That is, domestic third parties--including 
employers--may assist sponsors in ``the promotion of mutual 
understanding'' by arranging sightseeing tours, trips to sporting 
events, local community activities, etc. As the 2012 IFR modifies the 
2011 IFR to allow only sponsors to complete the monthly monitoring 
requirement, third party arranged cultural activities are not a 
substitute for the monthly monitoring requirement. The Department 
reminds sponsors that they are responsible for the actions of third 
parties they may engage to fulfill the cultural component requirement 
and that such actions will be imputed to the sponsors. The Department 
seeks comment on sponsors' provision of cultural opportunities, 
especially with respect to best practices that can be shared with the 
sponsor community.

[[Page 27598]]

    Comment analysis received on the 2011 IFR. Thirty-five parties 
submitted comments to the 2011 IFR. Of those, 12 parties were 
designated sponsors and one was an association that represents 
designated sponsors. Most of the commenting parties recognized both the 
value of the Summer Work Travel Program and the need for modified 
regulations. However, both sponsors and small businesses who hire 
Summer Work Travel Program participants stated that the regulatory 
changes were administratively burdensome. Sponsors argued that the 
Department had understated the cost to implement the changes. Two 
research organizations and two individual citizens recommended shutting 
down or sharply reducing the Program's size. The 14 non-sponsor 
participants who supported the Summer Work Travel Program included 
small businesses, an amusement park industry association, and 
individual citizens. The small businesses noted that they often cannot 
find sufficient numbers of qualified Americans to fill the positions 
where J-1 exchange visitors are traditionally placed. The Department 
has carefully considered all comments and has accordingly made 
modifications to the regulations proposed in the 2011 IFR as described 
below.
    Purpose. One commenting party remarked on redundant language about 
program duration in the ``Purpose'' section of the regulations, and the 
Department has accordingly eliminated that language. However, the 
refocus of the cultural component of the Program has been added to this 
section. The Department has modified the language both to emphasize the 
cultural aspect of the Program and to call attention to the types of 
jobs that are appropriate for Summer Work Travel participants.
    Duration. Seven parties commented about the length and timing of 
participants' Summer Work Travel programs. Several of them urged the 
Department to allow participants to stay past Labor Day, as seasonal 
employers may require their continued presence in order to meet this 
final concentration of demand. Others commented that the Department had 
adopted countrywide dates for program participation without regard for 
individual schools' academic calendars. Some disputed the requirement 
that final year students be restricted to those schedules, citing no 
reason for them to have to return home.
    Other than final-year students who are expected to return home to 
start their careers, participants are expected to return to their 
studies following participation in the Summer Work Travel Program. 
Thus, these dates must necessarily reflect academic calendars--without 
regard for host employers' specific needs. To facilitate appropriate 
participation in the Summer Work Travel Program, the Department has 
established country-specific program start and end dates according to 
the academic year calendars of each country's universities. The 
Department may modify the list of country-specific program dates should 
a particular need arise (e.g., a shift in the academic year in a 
particular country). The Department notes that it does not allow final 
year participants to extend their programs beyond the country-specific 
end dates.
    Participant screening and selecting. The 2011 IFR reintroduced the 
concept of ``core'' programmatic functions (see 61 FR 13760 (published 
March 28, 1996)). Several parties commented on the concept of core 
functions, seeking further definition and clarification. The six core 
programmatic functions which are differentiated from more general 
business administrative functions are: participant screening, 
selection, orientation, placement, monitoring; and the promotion of 
mutual understanding. While the Department requires sponsors to undergo 
the rigorous designation and re-designation processes, it has 
correspondingly less influence and oversight over third parties who 
assist sponsors in the administration of their programs. Accordingly, 
the new Summer Work Travel Program paradigm prevents wholesale 
delegation of sponsor duties to parties unknown to the Department both 
by limiting the functions third parties can perform and by delineating 
steps sponsors must undertake to confirm the bona fides of such third 
parties. The Department continues to impute the actions of all third 
parties to the sponsors that engage them.
    The 2011 IFR states that ``sponsors are solely responsible for 
adequately screening and making the final selection of their program 
participants. * * * '' The Department has since realized that third 
parties should not assist sponsors in the core function of selecting 
participants, and it modifies the regulations accordingly. However, the 
Department broadly construes activity of ``screening'' to include 
recruiting, interviewing, assessing English language proficiency, etc. 
While foreign entities may screen participants, sponsors remain 
solely--and ultimately--responsible both for setting the standards for 
screening and for making final participant selection, based upon 
information foreign entities gathered as part of the screening process.
    English language. Two parties commenting on the 2011 IFR remarked 
about the importance of participants being proficient in English (e.g., 
safety of students and success of program depend on English language 
skills). In the 2011 IFR, the Department allowed sponsors to interview 
participants via video conference, thereby providing sponsors with a 
low-cost means of interviewing participants ``in person.'' Despite this 
change, the Department continues to notice a significant number of 
Summer Work Travel Program applicants who are denied visas because 
their English proficiency is not sufficient to participate in the 
Program. Since the lack of adequate English ability may put 
participants at risk during their exchanges, the 2012 IFR establishes 
more explicit English proficiency standards that applicants to the 
Summer Work Travel Program must demonstrate to their sponsors' 
satisfaction. Specifically, applicants must have sufficient English 
proficiency not just to perform their jobs, but also to navigate daily 
life; read and comprehend program materials; fully understand their job 
benefits and responsibilities and their rights and protections; and 
know how to obtain assistance, if necessary. The Department reminds 
sponsors that the addition of video-conferencing as an interview tool 
provided them a cost-effective means of conducting these interviews 
themselves should they find foreign entities not fully capable of 
accurately assessing applicants' English proficiency. The Department 
will interpret inordinately high visa rejection rates because of 
insufficient English language proficiency as an indication that 
sponsors are not sufficiently screening potential applicants.
    Accredited academic institutions. The 2011 IFR also added the 
requirement that participants in the Summer Work Travel Program be 
``enrolled full-time and pursuing studies at accredited post-secondary 
academic institutions located outside the United States'' (emphasis 
added). One party commented on this change, specifically with respect 
to the absence in the language of a requirement that these institutions 
have a formal campus of the ``bricks and mortar'' variety, and not be 
on-line schools. The Department did not intend to open the door to 
students enrolled in purely Internet-based schools. Summer Work Travel 
participants must have an academic pull back in their home countries 
(or in the foreign countries where they are studying) that requires 
them to leave the United States at the end of their academic breaks. 
Accordingly, the Department clarifies that the post-secondary 
institutions in

[[Page 27599]]

which participants must be enrolled to participate in the Summer Work 
Travel Program must be classroom based, in addition to being accredited 
and academic in nature.
    Participant orientation. The Department adds to the list of 
required orientation materials and information that sponsors must 
provide Summer Work Travel Program participants before they depart 
their home countries. Sponsors must explain the importance of the 
cultural component of the Summer Work Travel Program. They must provide 
guidance on how best to experience U.S. culture and/or describe 
cultural opportunities they have arranged. For participants with pre-
placed jobs, sponsors must provide details on job offers and 
information about housing and transportation to and from work. 
Additionally, sponsors must inform participants that they risk program 
termination if they (1) fail timely to report their arrival and/or 
changes of residence; (2) start work at un-vetted jobs; and/or (3) fail 
timely to respond to sponsors' monthly monitoring outreach contacts. 
Many commenting parties opined that it would be difficult to get 
college students to respond to sponsors' outreach. The Department 
disagrees. By providing sufficient orientation and a clear 
understanding of the conditions of program participation at the outset, 
sponsors should be able to gain the cooperation of their participants 
to comply with program rules. The Department encourages sponsors that 
already achieve this level of cooperation from their participants to 
share their best practices with the Department during the comment 
period.
    Consequences of non-compliance by participants. With respect to how 
to respond to participants who fail to meet the obligations enumerated 
above, the preamble accompanying the 2011 IFR stated: ``As a point of 
clarification of existing regulations, sponsors are obligated to end 
the exchange programs of participants who do not report their arrival 
within ten days following the program start date or who do not report 
changes in their U.S. addresses or sites of activity within ten days of 
such moves.'' (76 FR 23177, 23180) (April 24, 2011)) During the on-site 
reviews, at association meetings, and in comments filed in response to 
the 2011 IFR, many sponsors inquired whether they should simply ``end'' 
programs of non-compliant participants' programs or actually terminate 
their status in the Student and Exchange Visitor Information System 
(SEVIS). The Department recognizes that this statement needs further 
clarification. Sponsors must inform participants that their non-
compliance will result in their termination from the program, and that 
program termination puts at risk their ability to travel to the United 
States in the future.
    Many commenting parties expressed concern that the requirement that 
participants contact their sponsors within ten days of arrival in the 
United States conflicted with the requirement that sponsors validate 
participants' records in the SEVIS within 30 days. The Department 
clarifies that this new notification requirement does not change the 
requirement in 22 CFR 62.70(b) that sponsors update SEVIS records 
within 21 days of learning of changes of current U.S. addresses, or the 
requirement in 22 CFR 62.70(d) that sponsors validate SEVIS records of 
Summer Work Travel Program participants within 30 days of their program 
start dates. These are obligations of sponsors with respect to SEVIS 
maintenance; the new regulatory language imposes an obligation on 
participants to report their arrivals and any address changes promptly 
to their sponsors. Since implementing the 2011 IFR, however, the 
Department has determined that participants cannot change or add jobs 
independently. If they wish to change or add jobs, they must first 
consult with their sponsors who must verify the terms and conditions of 
prospective jobs and fully vet potential host employers. This change 
has made unnecessary the previous requirement that participants inform 
sponsors within ten days of changing jobs. Accordingly, the Department 
modifies the regulations to make clear that the participants' ten-day 
notification requirement applies only to reporting participants' 
arrivals and changes of residences (including securing initial 
residences). It further clarifies that sponsors must inform 
participants that they may not start, change, or add jobs before their 
sponsors have vetted the host employers and the terms and conditions of 
the jobs pursuant to 22 CFR 62.32(n). The Department requires sponsors 
to act promptly (i.e., within 72 hours) to verify this information and 
to report back to the participants the results of such action.
    The Department considers participants starting work before their 
sponsors fully vet their jobs to be engaged in unauthorized employment 
and reminds sponsors of 22 CFR 62.16(b), which states: ``An exchange 
visitor who engages in unauthorized employment shall be deemed to be in 
violation of his or her program status and is subject to termination as 
a participant in an exchange visitor program.'' The requirement that 
program participants not change jobs without permission from their 
sponsors in no way suggests that participants must remain in unsuitable 
positions such as those that are not consistent with written job offers 
or in other ways do not meet the expectations of participants or the 
purpose of the Act. The Department expects that sponsors will not 
unreasonably withhold their assistance or permission for participants 
who have valid reasons for wishing to change or add jobs.
    Employees at will. One sponsor sought clarification of the 
requirement that sponsors provide pre-placed participants with 
information about the ``contractual obligations'' between the 
participants and their employers. This party asked what kind of 
information was required and how a ``contract'' could exist given that 
most participants--like their U.S. counterparts in these jobs--would be 
considered ``employees at will.'' The Department agrees that Summer 
Work Travel Program participants are employees at will, but 
nevertheless requires sponsors to inform participants about the terms 
and conditions of their job offers. This creates a degree of 
transparency that can ensure that the participants' expectations are in 
line with the jobs and conditions that they will encounter upon their 
arrival in the United States. The Department is developing a Summer 
Work Travel Program Job Placement Form (i.e., Form DS-7007) to capture 
the information necessary for sponsors to demonstrate that they have 
fully vetted potential jobs (e.g., the name and address of the host 
employer, the hourly wage, benefits, the range of hours per week the 
participants likely will work, whether the host employer has arranged 
housing, and if so, its cost to the participant). The Department 
published the form in the Federal Register and sought comment on its 
design (see 76 FR 72996 (Nov. 28, 2011)). Until such time as the DS-
7007 Form is finalized and adopted, as a ``best practice,'' sponsors 
may voluntarily begin using forms similar to the Form DS-7007 for 
informing participants about the details of their vetted jobs.
    Cultural component. Sponsors are required to inform participants 
prior to their departure from their home countries about the importance 
of the cultural aspects of the Summer Work Travel Program. They must 
provide specific guidance on how participants can avail themselves of 
cultural opportunities in general as well as identify specific 
activities that the

[[Page 27600]]

sponsors intend to arrange to further promote cultural exchange. 
Sponsors must screen out those applicants whose interests in the Summer 
Work Travel Program predominantly appear focused on earning income. 
Accordingly, the Department will view the lack of documented evidence 
of participants' cultural activities required by Summer Work Travel 
Program regulation as, among other things, a deficiency by sponsors 
adequately to screen and orient program participants. The Department 
seeks comment on the Program's refocus on the cultural component and 
encourages sponsors to share their best practices.
    Participant placement. In the 2011 IFR, the Department established 
a new process by which sponsors must vet both potential job offers and 
potential host employers. The Department's experience with this 
requirement--both for the Pilot Program this past summer and this most 
recent winter session--has demonstrated the benefits of this new model. 
No sponsor commenting on the 2011 IFR objected to this new requirement; 
accordingly, the Department makes no substantive changes to the job and 
employer vetting requirements. It does clarify, however, that sponsors 
must vet potential host employers annually and that prior to each 
season, sponsors must confirm the number of jobs each host employer 
seeks to fill with program participants. The Department clarifies, 
however, that placement is one of the core functions that sponsors may 
not enlist third parties to perform. In this context, placement means 
matching particular participants with specific job opportunities. In 
other words, third parties (foreign and domestic alike) may provide 
sponsors with leads for potential jobs, but sponsors must determine the 
suitability of individual participants for specific jobs and make all 
placements.
    In the 2011 IFR, the Department prohibited sponsors and foreign 
entities from providing incentives to employers to accept program 
participants for job placements. In the 2012 IFR, the Department 
clarifies that participant placement is the sole responsibility of 
sponsors, i.e., foreign entities may not match participants with 
available jobs. The Department, however, realizes that despite this 
restriction, both U.S. and foreign third parties could play an 
ancillary role in finding job placements, e.g., by informing sponsors 
or participants (who find their own jobs) about potential job openings. 
Accordingly, the 2012 IFR expands the prohibition to include the 
provision of incentives to employers by all third parties acting on 
behalf of sponsors. While the regulations continue to prohibit such 
third parties from actually placing participants, the Department wishes 
to ensure that third parties or sponsors in no way provide potential 
host employers with incentives to accept any participants for job 
placements.
    With respect to the definition of ``incentives'' in this context, 
seven commenting parties urged the Department to clarify that it does 
not intend to prohibit sponsors from funding travel expenses for 
employers of Summer Work Travel Program participants to international 
job fairs that provide hiring entities the opportunity to meet their 
prospective workers. The Department understands that the cost of 
travel, accommodations, meetings, and meals would be included in the 
cost of such job fairs. It considers job fairs to be opportunities for 
potential host employers to meet their prospective employees and, 
therefore, not incentives to hire particular sponsors' participants. 
Likewise, the Department does not seek to prohibit meetings between 
prospective or current host employers and sponsors at mealtimes. 
However, the Department does consider gifts, cash payments, and trips 
paid for by sponsors that do not include opportunities to meet 
prospective participants to be prohibited ``incentives'' to host 
employers.
    Confirm all jobs. Under the terms of the Pilot Program, sponsors 
were required to confirm all jobs prior to participants' departures 
from their home countries by verifying both the bona fides of the 
potential employers and the terms and conditions of the job offers 
themselves. In the 2011 IFR, this requirement was extended to all 
participants from non-Visa Waiver Program countries. In comments on the 
2011 IFR, one party urged the Department to allow participants from 
Visa Waiver Program countries to begin work as soon as they obtained 
job offers and allow sponsors five days to vet the employers and the 
jobs in order to allow participants to start work immediately. 
Theoretically, this could apply also to participants from non-Visa 
Waiver Program countries who wanted to change or add jobs or to 
participants from Visa Waiver Program countries both under those 
circumstances and in the case of their initial employment. The 
Department respectfully rejects this recommendation because it believes 
it will cause unnecessary confusion as to which participants could 
start unverified jobs and under what conditions. Once participants have 
arrived in the United States and secured job offers, sponsors must vet 
initial, subsequent, and additional jobs within 72 hours. The 
Department requires sponsors to have sufficient staff and resources to 
ensure the jobs of all participants to whom they offer exchange 
programs are timely and fully vetted. The Department seeks comment on 
potential barriers to sponsors meeting this 72 hour deadline.
    Obligation to work with participants seeking new or additional 
jobs. The 2011 IFR proposed new requirements for vetting both host 
employers and the terms and conditions of individual job offers. The 
Department adopts those provisions with limited change. Although the 
text of the regulation has been slightly restructured to provide more 
clarity, the only substantive change the Department makes is in 
response to comments on the 2011 IFR and during the on-site reviews. 
There was widespread objection to retaining the requirement that 
sponsors maintain rosters of bona fide job listings for participants 
seeking job placements. Some commented that not only is it difficult to 
keep these lists updated, this requirement is also an anachronism in 
the Internet era. The Department agrees and eliminates the requirement 
that sponsors maintain such lists of available jobs. Instead, the 
Department now explicitly requires sponsors to offer reasonable 
assistance to participants seeking additional or subsequent jobs 
(regardless of whether participants were initially direct-placed or 
self-placed). The 2011 IFR incorrectly changed from one to two weeks 
the amount of time non-pre-placed participants must attempt to find 
work before obtaining assistance from their sponsors. The Department 
clarifies that sponsors are expected to undertake reasonable efforts to 
assist non-pre-placed participants (i.e., those from Visa Waiver 
Program countries) who have not found suitable employment within one 
week of commencing job searches.
    The Department recognizes that there are many reasons that 
participants may be unsatisfied with their initial jobs and that the 
expectations of some participants may differ from the reality of their 
placements. Although sponsors are required to make reasonable efforts 
to find replacement jobs for participants, under certain circumstances, 
it would be appropriate for sponsors to end (not terminate) programs of 
participants for whom subsequent suitable jobs cannot reasonably be 
arranged. While participants who end the work portion of their programs 
early may travel in the United States before returning home,

[[Page 27601]]

those with terminated programs may not.
    New criteria for appropriate job placements. The Department adds 
new criteria that sponsors must consider when determining the 
suitability of job placements. In addition, it expands the list of 
prohibited job placements. The goal is further to ensure the placement 
of participants in appropriate jobs that provide them better 
opportunities to experience U.S. culture and to ensure that 
participants work in environments that are safe and appropriate for the 
Exchange Visitor Program. Jobs must be seasonal or temporary in nature. 
Employment is of a seasonal nature when the required services or labor 
are traditionally tied to a season of the year by an event or pattern, 
and employers require labor levels above and beyond existing worker 
levels. Employment is of a temporary nature when employers' needs for 
duties to be performed are short-term, a one-time occurrence, a peak 
load need, or an intermittent need. It is the nature of employers' 
needs, not the nature of the duties that is controlling.
    Sponsors must place participants only in jobs that offer 
opportunities to interact routinely with U.S. citizens and experience 
U.S. culture. Sponsors may place participants only in those jobs that 
adhere to the participant placement criteria listed in 22 CFR 
62.32(g)(4-6), which among other things includes prohibited jobs found 
at 22 CFR 62.32(h). Sponsors must use extra caution when placing 
participants in positions with host employers in lines of business that 
have been associated with trafficking in persons (e.g., modeling 
agencies, housekeeping, janitorial services). When sponsors follow the 
previously cited regulations and guidance, the result will be job 
placements that:
    [ssquf] Do not have the effect of displacing U.S. workers, 
especially young U.S. citizens (18-25 years old), a group that is 
currently experiencing high unemployment levels;
    [ssquf] Do not overly concentrate program participants or isolate 
program participants from interactions with U.S. citizens, both of 
which will diminish the cultural exchange component of the program; and
    [ssquf] Permit participants to work alongside U.S. citizens in the 
same or similar jobs.
    Sponsors may place participants with employment or job placement 
agencies only under the following three circumstances: First, 
participants must be employees of and paid by the staffing agencies; 
second, staffing agencies must provide full-time, primary, on-site 
supervision of the participants; and third, staffing agencies must 
effectively control the work sites, e.g., have hands-on management 
responsibility for the participants. If these three conditions are not 
met, staffing agencies are not fulfilling the role of employers, and 
sponsors may not place participants with them.
    Program exclusions. Notwithstanding its development of this new 
guidance for identifying appropriate jobs, the Department retains and 
enhances the list of prohibited positions that have traditionally been 
incorporated in Summer Work Travel Program regulations. As the 
Department's concern for the health, safety, and welfare of 
participants and the integrity of the Summer Work Travel Program remain 
of paramount importance, it views this approach to job selection 
guidance as both prudent and necessary.
    First, the Department clarified that sponsors cannot place 
participants in jobs as operators or drivers of vehicles or vessels, 
even if they are not carrying passengers. It also articulated 
additional examples of prohibited jobs in the adult entertainment 
industry. Moreover, due to concerns about participants' health, safety 
and welfare, the Department further expanded this list to include jobs 
that have already been declared by the Secretary of Labor to be 
hazardous to youth; jobs that require adherence to the Center for 
Disease Control and Prevention's Universal Blood and Body Fluid 
Precautions guidelines and/or require sustained physical human contact; 
jobs in warehouses; and chemical pest control jobs. Further, jobs that 
fall under the North American Industrial Classification System (NAICS) 
Goods-Producing Industries occupational categories industry sectors 11, 
21, 23, 31-33 are prohibited, specifically: Natural Resources and 
Mining (including Agriculture, Forestry, and Fishing and Hunting as 
well as Mining, Quarrying, and Oil and Gas Extraction); Construction; 
and Manufacturing. This prohibition is the only portion of the 2012 IFR 
that will be effective, not with publication of the 2012 IFR, but on 
November 1, 2012.
    Two other job positions are now excluded. Sponsors may not place 
participants in positions for which the compensation is substantially 
commission-based because they do not guarantee that participants will 
be paid minimum wage in accordance with federal and state standards. 
Also, positions with traveling fairs or itinerant concessionaires are 
also now prohibited due to health and safety concerns associated with a 
nomadic lifestyle, as well as the resulting difficulty in tracking the 
locations of such participants in SEVIS. Finally, as part of its effort 
to refocus the program on its cultural purpose, the Department further 
expands the list of excluded positions in the 2012 IFR to include types 
of employment that are incompatible with a cultural exchange program: 
including positions requiring work hours that fall predominantly 
between the hours of 10:00 p.m. and 6:00 a.m. and positions in 
catalogue/online order distribution centers. Consistent with Executive 
Order 13563, and its particular emphasis on the importance of public 
participation, the Department requests comments on these expanded job 
prohibitions in this interim final rule.
    The Department recognizes that in light of the timing of this 
interim final rule, the immediate implementation of the NAICS 
prohibitions at this date may cause serious economic hardship for 
certain employers, sectors, or locations for the immediate summer 2012 
season. For this reason, the Department is adopting a phased approach 
and implementation of those specific prohibitions will not go into 
effect until November 1, 2012, after the immediate summer season. On or 
before that date, sponsors that place participants in these jobs, must 
either end the participants' programs or place the participants in 
permitted jobs.
    The Department emphasizes that all other provisions of the 2012 IFR 
are effective immediately upon publication. This means that the 
programs of participants placed this summer in jobs that will be 
prohibited starting November 1, 2012 are still subject to all program 
regulations during the upcoming summer season. For example, sponsors 
must ensure those positions provide participants opportunities to 
interact routinely with U.S. citizens during the day and after, do not 
fall predominantly between the hours of 10:00 p.m. and 6:00 a.m., and 
do not prevent participants from actively and routinely taking part in 
cultural activities. In addition, such placements may not create over-
concentration of participants in any one location, or displace U.S. 
citizen workers at the specific worksites.
    Housing and transportation. The regulations adopted in the 2011 IFR 
required sponsors to advise only participants from Visa Waiver Program 
countries how to find appropriate and reasonably priced housing. The 
Department now amends the regulations to include all Summer Work Travel 
Program participants. When evaluating the suitability of potential 
jobs, sponsors must consider the availability,

[[Page 27602]]

affordability, and suitability of local housing and transportation. 
When host employers do not offer housing and transportation or 
participants do not wish to avail themselves of employer-provided 
housing and transportation, sponsors must actively and immediately 
assist Summer Work Travel Program participants in arranging suitable, 
affordable, and safe housing, and ensuring that reliable and affordable 
transportation between their residences and work sites is available. To 
be considered safe, housing must, at a minimum, meet all applicable 
local laws and regulations, including with respect to ventilation, 
utilities, and occupancy rates. If it is difficult for sponsors to 
identify appropriate housing and/or transportation under certain 
circumstances, this should signal the sponsors to search for other jobs 
in other locations. The Department seeks comment on the expanded roles 
of sponsors in ensuring the availability of appropriate housing and 
transportation.
    Often, host employers provide housing and/or transportation to 
program participants and reduce their hourly pay or otherwise deduct 
from their pay to cover the cost of such housing and/or transportation. 
In these cases, job offers must explicitly describe such arrangements 
and specify the market value of the housing and/or transportation. In 
this way, it is clear whether the participants are being compensated in 
compliance with program regulations, including compliance with state 
wage requirements and section 531 of the Fair Labor Standards Act 
(FLSA), which requires that such deductions be voluntary and not 
include a profit to the employer or to any affiliated person.
    Forms DS-2019. Four parties objected to the requirement that 
sponsors enter the host employer sites of activities and job titles in 
SEVIS prior to issuing Forms DS-2019. One party commented that this 
requirement was unworkable because it forces employers to commit months 
before knowing their summer employment needs. It recommended that, 
instead, the language be changed to require collection of employment 
information in SEVIS before applicants' visa interviews. Others 
expressed concern that employers do not know the sites of activity 
prior to the preparation of Forms DS-2019, and one stated that 
participants are often assigned specific job titles only after they 
report to work.
    The Department disagrees with respect to participants from non-visa 
waiver countries. Sponsors must vet their potential employers as set 
forth at 62.32(n), confirm the terms and conditions of their job 
offers, and input complete and correct data into SEVIS prior to issuing 
Forms DS-2019 to participants from non-visa waiver countries. In the 
rare cases where sponsors do not know the sites of activity, they may 
initially enter the employers' main addresses in the site of activity 
fields, noting that such information will change, and update SEVIS 
prior to the visa interview. Clearly, such job and employer information 
is available for participants from visa-waiver countries only if they 
opt to secure placements prior to departing their home countries--in 
which case, they will be treated as participants from visa-waiver 
countries for purposes of determining when such information must be 
entered into SEVIS. Accordingly, sponsors can issue Forms DS-2019 for 
non-pre-placed participants from visa waiver countries prior to 
entering any of this information into SEVIS. However, sponsors must 
always vet employers and job offers prior to entering the data into 
SEVIS.
    Participant compensation. Sponsors must ensure that host employers 
fairly compensate participants for their work. In the 2011 IFR, the 
Department adopted the requirement that Summer Work Travel Program 
participants, regardless of age, be compensated at the higher of the 
applicable state minimum wage or the federal minimum wage. One party 
commented that the broader and more protective language of the prior 
regulations (i.e., ``shall ensure that participants receive pay and 
benefits commensurate with those offered to their American 
counterparts'') should be retained. The Department notes that this 
language was unintentionally dropped from the 2011 IFR and hereby 
reinserts it. Another commenting party expressed concern that the 
regulations did not include the minimum wage exemption for jobs with 
amusement and recreational establishments found in the FLSA. By 
reinserting the dropped language, the regulations implicitly recognize 
the minimum wage exemption of the FLSA for such placements. If a 
sponsor has reason to suspect that a participant is not being 
compensated in accordance with Federal, State or local law, the sponsor 
must contact the appropriate authorities, including, but not limited to 
the U.S. Department of Labor's Wage and Hour Division.
    Monitoring. There are numerous reasons for sponsors to stay in 
regular and direct communication with their participants. First, this 
type of contact allows sponsors to check on participants' health, 
safety, and welfare. Also, it reinforces the primacy of the sponsor/
participant relationship in the Summer Work Travel Program so that 
participants with concerns about their programs will reach out to their 
sponsors for assistance should they need it. Further, it provides 
sponsors with the opportunity to confirm that they have the 
participants' correct ``Current U.S. Addresses'' and ``Sites of 
Activity'' listed in SEVIS, so they may maintain accurate SEVIS records 
in the interest of National Security. It also allows sponsors to 
confirm that participants are enjoying the mandatory cultural 
experiences. For these reasons, the 2011 IFR expanded the obligations 
of sponsors to monitor their program participants by requiring personal 
contact with all participants on a monthly basis. Sponsors must 
document such monthly contacts, which can be in-person, by telephone, 
or via email exchange. Many sponsors commenting on the 2011 IFR 
objected to having to actually reach participants to meet this 
obligation, suggesting that it would be difficult if not impossible to 
compel participants to respond to sponsors' outreach. The Department 
disagrees and subsequently clarifies that although broadcast or 
individual texts, emails, or voice messages, for example, may be 
considered attempts to initiate contact with participants, participants 
must respond to communications in order for such contacts to be 
considered complete. Sponsors must terminate the programs of 
participants who exhibit a pattern of failing to respond to the monthly 
monitoring. Accordingly, sponsors must not place participants in 
locations where it is difficult for them to access the normal forms of 
communications.
    Sponsors' use of third parties. One commenting party urged the 
Department to allow foreign entities to participate in the monitoring 
function of participants, stating that foreign entities provide native 
language support, and the parents of participants appreciate their 
supportive roles. The Department recognizes the critical role that 
foreign entities can play in reaching out to participants when unusual 
circumstances require clear communication, and it clarifies that these 
regulations in no way prohibit foreign entities from contacting 
participants and/or their parents. Such contacts, however, do not count 
as part of the sponsors' monthly monitoring requirement. The Department 
does not allow host employers or any other third party to assist in 
conducting monthly monitoring. If program participants are having 
problems with their employers or the conditions of their jobs, allowing 
employers to assist in monthly

[[Page 27603]]

monitoring effectively denies participants' access to neutral 
advocates. In sum, sponsors may not delegate their monthly monitoring 
responsibilities to third parties, but must themselves initiate, 
complete, and document monthly contacts with all program participants.
    With renewed focus on the cultural component of the Summer Work 
Travel Program and the understanding that sponsors often place 
participants throughout the United States, the Department has 
determined that sponsors may have third parties assist them in the core 
programmatic function of promoting mutual understanding. That is, 
sponsors may engage third parties to arrange local activities, 
sightseeing trips, or other events that allow participants to interact 
with U.S. citizens and/or learn about U.S. culture. Sponsors may wish 
to work together to offer joint activities. Sponsors must vet these 
domestic third parties according to the requirements set forth in Sec. 
62.32(n).
    Vetting third parties (foreign entities). The 2011 IFR also 
required sponsors to vet all foreign entities (i.e., overseas agents or 
partners) that assist them in fulfilling the core programmatic 
functions that may be conducted outside the United States and to 
maintain current listings of such parties in a new ``Foreign Entity 
Report.'' Specifically, sponsors must obtain proof of these entities' 
business licenses, disclosures of previous bankruptcies or pending 
legal actions, three written references, summaries of the entities' 
prior J-1 experience, criminal background check reports, and copies of 
sponsor-approved advertising materials. After sponsors have 
successfully vetted foreign entities, they must provide the Department 
with this information to allow the Department to update the Foreign 
Entity Report. Although applicants do not need to work with foreign 
entities, they may not work with those foreign entities who are not 
included in the Report. If any material information (e.g., contact 
information, financial status, criminal backgrounds of principals, 
relationship with sponsor) changes, sponsors must promptly provide this 
information to the Department.
    Eight parties commented on these requirements, voicing almost 
unanimous concern that it would be too expensive to maintain English 
translations of foreign entities' marketing materials, especially given 
the Internet-focus of today's advertising environment. They requested 
that instead, sponsors approve the major marketing themes of their 
foreign entities. The Department disagrees. The foreign entities' 
initial outreach to potential program participants sets the stage for 
participants' expectations about the Summer Work Travel Program. 
Sponsors must be aware of what the foreign entities are posting on web 
sites, communicating through social media, and distributing in printed 
materials to ensure the information conforms to the purpose and intent 
of the program and meets regulatory requirements. It is important, for 
example, that the cultural exchange aspects of the program are 
accentuated, and that students' expectations about how much money they 
can earn are realistic.
    During its on-site reviews, the Department had the opportunity to 
assess several sponsors' compliance with foreign entity verification 
requirements for the winter 2011-2012 season. Overall, the Department 
found that sponsors were readily able to obtain almost all the 
requested documents without undue cost or burden. Accordingly, the 
Department makes only minor changes to the provisions enumerated in 
this section of the regulations to correct for errors in the text that 
allowed foreign entities to select participants and failed to require 
annual vetting of foreign third parties.
    Although not included in the regulations, the preamble to the 2011 
IFR mentioned that sponsors must obtain notarized financial statements 
to demonstrate the financial solvency of potential foreign entities 
(See 76 FR 23177-23179). Two parties commenting on this language 
suggested that it would be difficult to obtain notarized financial 
statements and recommended that the Department require sponsors to 
obtain copies of bank statements instead. The Department does not 
believe that a single view of an entity's bank account provides 
sufficient evidence of its financial viability, while it believes 
notarized statements are a step in fraud prevention. The Department 
also clarifies that sponsors must annually update the records and 
credentials of the foreign entities they engage to help administer 
their Summer Work Travel Programs. Additionally, pursuant to 22 CFR 
62.32(p)(2), the Department takes this requirement one step further and 
now requires sponsors to inform the Department when and why particular 
foreign entities are no longer under contract with them.
    Vetting third parties (domestic entities). The 2011 IFR limited the 
domestic entities that could assist sponsors in performing core 
programmatic functions to host employers of participants. However, the 
broad range of structured and planned cultural events that can satisfy 
the cultural component requires flexibility with respect to the types 
of third parties sponsors can engage. For example, sponsors may partner 
with individuals who voluntarily assist in arranging local community 
events or major international corporations in the tourism line-of-
business. As a result, there can be no one-size-fits-all process for 
vetting such third parties.
    Accordingly, sponsors who engage business entities to provide 
cultural events or activities for which participants must pay (either 
directly or through the sponsors) must vet these entities according to 
the standards required for host employers set forth in the 2011 IFR and 
clarified in the 2012 IFR. In addition, they must enter into written 
agreements with such parties, and these agreements must explicitly 
describe the activities or events and itemize all costs. Private 
individuals or local groups (e.g., local consortia created to assist 
with the assimilation of Summer Work Travel Participants into the 
community, including church groups) that do not charge for 
participation need not be similarly vetted or enter into such written 
agreements. For this purpose, the Department would not consider, e.g., 
participants buying their own tickets to or food at local sporting 
events to be paying for participation, even if an individual or group 
made the arrangements. Sponsors should engage in assisting the 
provision of cultural events only with local individuals or groups that 
are known and reputable in the community.
    The 2011 IFR requires that sponsors directly contact potential 
employers to verify key information as well as utilize publicly 
available information to confirm the existence and legitimacy of the 
potential host employers. Nine parties commented on this proposed rule 
change, with most of them either seeking clarification of the 
requirement that they verify potential host employers' Employer 
Identification Numbers (EINs) or opposing altogether the requirement to 
obtain EINs. One party recommended that the Department alternatively 
require sponsors to obtain copies of employers' current business 
licenses. The Department agrees and replaces the requirement that 
sponsors verify EINs with the requirement that they obtain proof that 
the businesses (e.g., corporations, partnerships) are authorized to 
operate in the state or jurisdiction. Such information is generally 
available from the Web sites of each state's Secretary of State. Copies 
of such registration documents should

[[Page 27604]]

sufficiently demonstrate that potential host employers are active and 
registered businesses in the locations where they will place 
participants.
    Commenting parties sought guidance on what constitutes sufficient 
verification of host employer's worker's compensation coverage. First, 
sponsors must be aware of current state-specific requirements. Second, 
sponsors must obtain each host employer's workers' compensation policy 
identification number and a copy of the policy's Cover Page and/or Deck 
Sheet, confirming that the coverage is sufficient and active during the 
period of placement. Third, sponsors must determine whether the host 
employer has been recently sanctioned by the U.S. Department of Labor's 
Occupational Safety and Health Administration or Wage and Hour 
Division. Sponsors can check the Department of Labor's sanctioned list 
at: http://ogesdw.dol.gov/. Sponsors should hesitate to place 
participants with recently sanctioned employers.
    One sponsor inquired whether there were certain conditions under 
which verification of an employer would be unnecessary (e.g., a 
previously vetted host employer or a host employer with whom the 
sponsor has worked for more than two years). The Department understands 
that many sponsors place program participants with the same host 
employers year after year. However, the cost and effort required to 
reconfirm the bona fides of past host employers are modest enough to 
warrant annual reconfirmation of all organizations' basic information. 
Also, the Department has observed too many job offers that were used in 
the summer and again in the winter season even though those host 
employers had no need for winter seasonal employees. Accordingly, the 
Department hereby modifies the regulations to require sponsors to vet 
host employers annually, and each season to verify the actual number of 
job placements available.
    Host employer cooperation. The 2011 IFR also added a new section on 
host employer obligations. Nine parties commented on these new 
regulations, noting that the Department has no jurisdiction over 
employers, rendering unenforceable this entire new section of the 
rules. There also was concern about the inability of host employers to 
guarantee that participants would work a certain number of hours each 
week. Some commented that many seasonal and temporary jobs are 
dependent upon weather and customer demand, and employers do not 
guarantee U.S. summer workers a minimum number of hours. While the 
Department acknowledges these comments, it believes that sponsors 
should work only with employers who agree to make good faith efforts to 
comply with certain terms of employment. Accordingly, the Department 
changed the title of the section ``Host employer obligations'' to 
``Host employer cooperation,'' thereby removing language suggesting it 
has jurisdiction over employers and has placed the obligation on 
sponsors to work only with those employers who would voluntarily commit 
to comply with these requirements.
    With respect to ensuring participants are working sufficient hours 
to cover their basic expenses and meet their program expectations, 
sponsors should avail themselves of the monthly contact with 
participants to inquire about their job satisfaction and financial 
state. If conditions are such that participants simply are not earning 
enough money to cover their basic expenses, it is incumbent upon the 
sponsors to assist them in finding new or additional jobs.
    Reporting requirements. Three parties opposed the Department's 
requirement that sponsors submit semi-annual placement reports. They 
contended that there is no value in identifying second or subsequent 
jobs or that the information is already available in SEVIS. The 
Department disagrees: SEVIS does not retain such information. Moreover, 
the Department believes that the more carefully sponsors screen 
participants and match their expectations to vetted job placements, the 
less frequently participants will change jobs, and such improved 
screening will be reflected in these reports. Accordingly, it retains 
this requirement to monitor participant job change rates and other 
program statistics.
    Annual price lists. In the 2011 IFR, the Department adopted a 
requirement that written agreements between sponsors and foreign 
entities contain annually updated price lists. During the on-site 
reviews, Department staff reviewed many such sponsor agreements and 
determined that the inconsistent formats sponsors used to present 
program costs made it necessary for the Department to request 
information in a more standardized format. Accordingly, the Department 
has qualified this requirement so that sponsors specify the itemized 
costs that participants must pay to both foreign agents and sponsors to 
participate in the Summer Work Travel Program. Recent criticism of the 
program has included alleged exorbitant costs that program participants 
must pay to work in minimum wage jobs. The Department requests this 
information in order to protect participants, sponsors, and the 
integrity of the program.
    Cultural exchange. While legitimate employment is an important 
component that defrays a portion of participants' program costs, it is 
neither the only element nor the primary element of the J-1 Exchange 
Visitor Program. Instead of merely lining up summer jobs for 
participants, sponsors must also consider--at the outset of any job 
placement consideration--the availability of housing and 
transportation, as well as the location of the position and the 
opportunities for cultural activities and community engagement. The 
balance between work time and free time, including the nature of the 
work itself and the opportunities for interaction with U.S. citizens 
during the workday, are also key considerations.
    With this in mind, sponsors must place students in jobs that 
provide daily and ongoing interaction with U.S. citizens. Additionally, 
sponsors must ensure that participants have opportunities to engage in 
cultural exchange outside of work. During the biannual re-designation 
of sponsors as well as in the day-to-day oversight and monitoring of 
program sponsors, the Department will look specifically for evidence 
that sponsors are actively facilitating or offering non-work cultural 
opportunities for participants. Clearly, sponsors should consider the 
accessibility of cultural opportunities as an important factor in 
determining whether specific jobs are suitable for program 
participants. Implementation of cultural activities is further 
facilitated by group excursions to sporting events, establishing local 
volunteer networks that pair exchange visitors with local citizens, or 
otherwise making intentional efforts to integrate program participants 
into local communities. Finally, as noted above, sponsors may engage 
third parties to assist in providing this cultural component to their 
program participants.
    Sponsors are not permitted to use cultural opportunities associated 
with the participants' employment to fulfill this requirement (e.g., 
amusement park visits are not acceptable cultural offerings for 
participants working at amusement parks). Registering participants on 
publicly available listserves of events is not sufficient by itself to 
meet this requirement; nor does the Department consider exclusively on-
line interactions to be satisfactory cultural offerings. How well 
sponsors develop and implement the program's cultural component will 
carry significant weight in the Department's biannual re-designation 
process for

[[Page 27605]]

sponsors. The Department will presume that participants' significant 
non-participation in organized cultural activities is caused by 
inadequacies in the sponsors' cultural offerings, their inability to 
adequately calibrate participants' work/non-work experiences, and/or 
sponsors' failure to select participants who are seeking cultural 
exchange.
    Sponsors are permitted to use cultural offerings as part of the 
required monthly contact with participants as long as any issues 
affecting the participants' health, safety, and welfare identified 
through such contacts are promptly and appropriately addressed. 
Sponsors should maintain evidence of participants' attendance in 
cultural events in their program files (e.g., event sign-up lists or 
emails confirming attendance at cultural events, signed and executed 
agreements with local organizations for volunteer service 
opportunities, cultural or educational excursions, group participation 
in cultural events).

Regulatory Analysis

Administrative Procedure Act

    The Department of State is of the opinion that administration of 
the Exchange Visitor Program, including the Summer Work Travel Program, 
is a foreign affairs function of the U.S. Government and that rules 
implementing this function are exempt from Sec. 553 (Rulemaking) and 
Sec. 554 (Adjudications) of the Administrative Procedure Act (APA). As 
reflected in the Fulbright-Hays Act, the purpose of such programs is to 
increase mutual understanding between the people of the United States 
and those of other countries, ``unite us with other nations'', and ``to 
promote international cooperation''. Pursuant to law, policy, and 
longstanding practice, the Department of State has supervised either 
directly or through private sector program sponsors or grantee 
organizations, those foreign nationals who come to the United States as 
participants in exchange visitor programs, one of which is the Summer 
Work Travel Program. Summer Work Travel participants come to the United 
States from over 190 countries and when problems occur in a program 
such as this, foreign governments often directly engage the Department 
of State regarding the treatment of their nationals, regardless of who 
is responsible for the problems.
    The Department emphasizes that many provisions of this interim 
final rule--indeed, the majority--reflect careful consideration of 
public comments received on a previous interim final rule, issued on 
April 26, 2011. Those provisions have been subject to detailed comments 
and this interim final rule has greatly benefited from those comments. 
At the same time, some provisions of this interim final rule are new. 
Some of these provisions will be enforced immediately, but others will 
not be enforced until November 1, 2012.
    The Department has two overriding purposes for issuing this interim 
final rule. One purpose is to put in place urgently needed measures to 
protect the health, safety, and welfare of foreign nationals entering 
the United States to participate in the Summer Work Travel Program for 
a finite period of time (up to four months) and then return to their 
countries of nationality or last legal permanent residence upon 
completion of their programs.
    The need for such efforts was made evident by a situation where 
Summer Work Travel participants were placed in nightshift jobs 
requiring long work hours in a packing warehouse and did not have free 
time available or the ability to interact daily with Americans, an 
experience in its totality that is contrary to a cultural exchange 
program. It is critical that Summer Work Travel sponsors currently 
planning for the summer of 2012 cycle of Summer Work Travel 
participants are now informed by regulation that exposure to such 
placements, and other jobs contrary to a cultural exchange program, are 
now strictly prohibited henceforth, starting with the summer 2012 
cycles of Summer Work Travel participants. Failure to act swiftly and 
decisively with an interim final rule to protect the health, safety, 
and welfare of these program participants will have direct, 
foreseeable, and substantial adverse effects on the foreign affairs and 
relations of the United States.
    The incidents were sufficiently of concern to cause the Department 
to engage in outreach to concerned officials from foreign affairs 
ministries around the world both to assuage them about our response to 
those incidents and to reaffirm the Department's intent to continue the 
Summer Work Travel program, but with necessary repairs (as was done in 
recent discussions the Department had with the governments of four of 
the largest countries sending Summer Work Travel participants). In 
short, a number of foreign governments have unequivocally informed the 
Department that they regard this program as important to their 
bilateral relationship with the United States and also important to 
their nationals who seek to participate in that program. Participating 
countries, therefore, look to the Department to keep the program alive 
but to fix it in a way that helps protect their nationals.
    The second overriding purpose of this interim final rule is to help 
restore the Summer Work Travel program to its original raison 
d'[ecirc]tre as a U.S. public diplomacy program intended to promote 
international cultural understanding in line with the overall purposes 
of the Fulbright-Hays Act, as discussed above. These two overriding 
goals are mutually reinforcing and provide the requisite foreign 
affairs function basis on which to adopt this interim final rule. 
Although the Department is of the opinion that this interim final rule 
is exempt from the rulemaking provisions of the APA, the Department is 
aware of the importance of public comment consistent with Executive 
Order 13563 and is publishing this rule as an interim final rule, with 
a discretionary 60-day provision for public comment and without 
prejudice to its judgment that the Exchange Visitor Program is a 
foreign affairs function. As noted above and discussed below, certain 
provisions of this interim final rule will not be enforced immediately, 
and will be delayed until November 1, 2012; comments are specifically 
invited on those provisions.
    In addition, and without prejudice to its determination that the 
function discussed herein is a foreign affairs function of the United 
States, the Department also finds that there is ``good cause'' under 5 
U.S.C. 553(b) and (d) for forgoing prior publication of an NPRM and for 
making this interim final rule effective upon publication, for the 
reasons summarized in this analysis, above, and explained more fully in 
the preamble.

Small Business Regulatory Enforcement Fairness Act of 1996

    This interim final rule is not a major rule as defined by 5 U.S.C. 
804 for the purposes of Congressional review of agency rulemaking under 
the Small Business Regulatory Enforcement Fairness Act of 1996 (5 
U.S.C. 801 et seq.). This interim final rule will not result in an 
annual effect on the economy of $100 million or more; a major increase 
in costs or prices; or significant adverse effects on competition, 
employment, investment, productivity, innovation, or on the ability of 
U.S.-based companies to compete with foreign-based companies in 
domestic and export markets.

Unfunded Mandates Reform Act of 1995

    This interim final rule will not result in the expenditure by 
State, local and

[[Page 27606]]

tribal governments, in the aggregate, or by the private sector, of $100 
million in any year and it will not significantly or uniquely affect 
small governments. Therefore, no actions were deemed necessary under 
the provisions of the Unfunded Mandates Reform Act of 1995.

Executive Order 13175--Consultation and Coordination With Indian Tribal 
Governments

    The Department has determined that this rulemaking will not have 
tribal implications, will not impose substantial direct compliance 
costs on Indian tribal governments, and will not pre-empt tribal law. 
Accordingly, the requirements of Executive Order 13175 do not apply to 
this rulemaking.

Regulatory Flexibility Act/Executive Order 13272: Small Business 
Impacts

    Since this interim final rule (2012 IFR) is exempt from 5 U.S.C. 
553, and no other law requires the Department of State to give notice 
of such rulemaking, it is not subject to the Regulatory Flexibility Act 
(5 U.S.C. 601, et seq.) and Executive Order 13272, Sec. 3(b). However, 
to better inform the public as to the costs and burdens of this rule 
upon designated program sponsors, the Department notes that the 2012 
IFR will affect the operations of 49 corporate, academic, and tax-
exempt program sponsors designated by the Department to conduct Summer 
Work Travel Programs. Further information follows.

Numbers of Small Businesses

    Of the 49 currently designated Summer Work Travel Program sponsors, 
33 sponsors have annual revenues of less than $7 million. These 33 
small program sponsors accounted for approximately 36,000 of the 
109,000 Summer Work Travel Program participants in 2011.

Prohibited Job Placements

    The 2012 IFR specifically expands the list of prohibited job 
placements (at 22 CFR 62.32(h) Program Exclusions) to now include: 
positions declared hazardous to youth by the Secretary of Labor at 29 
CFR 570.50 through 570.72; positions that require sustained physical 
contact with other people and/or adherence to the Center for Disease 
Control and Prevention Universal Blood and Body Fluid Precautions 
guidelines (e.g., body piercing, tattooing, massage, manicure); 
positions that are substantially commission-based and thus do not 
guarantee that participants will be paid minimum wage in accordance 
with federal and state standards; positions in the North American 
Industry Classification System's (NAICS) Goods-Producing Industries 
(set forth at http://www.bls.gov/iag/tgs/iag_index_naics.htm), 
specifically NAICS Sectors 11, 21, 23, and 31-33: Natural Resources and 
Mining (including Agriculture, Forestry, and Fishing and Hunting as 
well as Mining, Quarrying, and Oil and Gas Extraction); Construction; 
and Manufacturing (e.g., industrial food processing); positions 
requiring work hours that fall predominantly between the hours of 10 
p.m. and 6 a.m.; positions directly involved in gaming and gambling 
that include direct participation in wagering and/or betting; positions 
in chemical pest control, warehousing, or catalogue/online order 
distribution centers; and in positions with travelling fairs or 
itinerant concessionaires.
    Collectively, these positions accounted for approximately eight 
percent (8%) of all Summer Work Travel Program placements in 2011. A 
single large program sponsor, which voluntarily terminated its Summer 
Work Travel Program designation in 2012, sponsored approximately 40% of 
2011 participants placed in jobs prohibited by the 2012 IFR. Of the 
remaining placements last year in prohibited jobs, 24% were sponsored 
by small program sponsors. The Department estimates the cost of 
transferring participants scheduled for prohibited jobs to new 
placements at approximately $6,000 to $18,000 (one to three man hours 
at $20 per hour for the approximately 300 new positions to be arranged) 
for the 24 sponsors that made placements last year that will be 
prohibited by the 2012 IFR.
    The Department notes that there will be some indirect impact in the 
short-run on the U.S. businesses that have historically employed Summer 
Work Travel Program participants in positions prohibited by the 2012 
IFR. However, the Department is not imposing any direct regulatory 
requirements on these U.S. businesses.

Cultural Requirement

    The 2012 IFR requires program sponsors to ensure that all 
participants have opportunities to interact regularly with U.S. 
citizens and experience U.S. culture during the work portion of their 
Summer Work Travel Programs and to participate in organized events, 
trips, or other activities outside of work. The Department estimates 
that the new cultural component requirement will cost, on average, $20 
per participant, or approximately $2.2 million for the program. The 
Department notes that the actual cost of this requirement is likely 
less than $20 per participant: Many sponsors already provide such 
cultural activities for their participants and a significant majority 
of Summer Work Travel Program participants work in touristic areas 
where such activities may be organized for less than this estimated 
cost. The Department also emphasizes that it desires the cost of the 
cultural component not to be a burden on sponsors, and reiterates the 
number and variety of ways this requirement may be achieved. The 
Department accordingly estimates that approximately $720,000 of the 
cultural component cost of the 2012 IFR would fall upon small program 
sponsors. Collectively, the 2012 IFR will impose new costs of no more 
than $738,000 on the 33 small program sponsors. These costs as a 
percentage of small sponsor revenue are as follows: for 26 sponsors, 
the cost of these new requirements are between one and five percent (1-
5%) of their annual revenues; for six sponsors the cost of these new 
requirements are between five and ten percent (5-10%) of their annual 
revenues; and for one small sponsor, the cost of these new requirements 
is approximately 20% of its annual revenue.
    The Department determines that costs of the 2012 IFR are not 
significant to 26 of the 33 small program sponsors. The Department thus 
certifies that it does not believe that these regulatory changes will 
have a significant economic impact on a substantial number of small 
entities.

 Executive Order 13563 and Executive Order 12866

    As discussed above, the Department is of the opinion that the 
subject of this rulemaking constitutes a foreign affairs function of 
the United States, and thus is exempt from the provisions of Executive 
Order 12866. The Department has nevertheless reviewed this rulemaking 
to ensure its consistency with the regulatory philosophy and principles 
set forth in Executive Orders 12866 and 13563. The Department of State 
does not consider this interim final rule to be a ``significant 
regulatory action'' under Executive Order 12866, Sec. 3(f), Regulatory 
Planning and Review, and Executive Order 13563. However, to better 
inform the public as to the costs and benefits of this rule, the 
Department presents a discussion below.
    Affected Population. The Department estimates this rule will affect 
49 currently designated Summer Work Travel Program sponsors hosting a 
maximum of 109,000 participants. These sponsors are responsible for the 
individuals, many between the ages of

[[Page 27607]]

18 and 25, while in the Summer Work Travel Program. Sponsors provide 
the necessary information, support, and guidance for program 
participants. Although sponsors will be provided with professional 
automony regarding how they incorporate the requirements presented in 
the 2012 IFR, the Department estimates sponsors may still incur costs 
due to the rule.
    Costs. Implementation of certain of the provisions set forth in the 
2012 IFR may result in costs for the sponsors--those provisions are: 
implementation of placement prohibitions, implementation of a cultural 
requirement for program participants, and implementation of additional 
vetting, reporting, and record keeping requirements.
    Prohibited Job Placements. This IFR prohibits certain jobs that 
sponsors may already have selected for participant placements. The cost 
of finding replacement jobs will be minimal for the prohibitions that 
do not become effective until November 1, 2012. For the category of 
jobs that are immediately prohibited based on concerns for health, 
safety and welfare, participants already placed in these jobs will need 
to be re-located to new placements. The Department estimates that 
number to be no more than 300 and has calculated the cost of 
transferring participants scheduled for those jobs to be approximately 
$6,000 to $18,000 (one to three man hours at $20 per hour times 300) 
for the 24 sponsors that made placements last year that will be 
prohibited by the 2012 IFR.
    Cultural Component. The 2012 IFR requires program sponsors to 
ensure that all participants have opportunities to interact regularly 
with U.S. citizens and experience U.S. culture during the work portion 
of their Summer Work Travel programs and to participate in organized 
events or other activities outside of work. The Department estimates 
that the new cultural component requirement will cost an average of $20 
per participant for up to 109,000 participants; or approximately $2.18 
million annually for the program.
    Vetting, Reporting, and Recordkeeping. The 2012 IFR places 
additional vetting, reporting, and recordkeeping requirements on 
sponsors. The Department calculates that the new requirements may 
entail up to two additional hours of work per placement for Summer Work 
Travel sponsors that include an additional half hour for participant 
orientation; one additional hour towards third party screening, vetting 
and monitoring; and an additional half hour for the recordkeeping of 
the cultural component that each Summer Work Travel participant 
receives. The Department estimates that half of the participating 
sponsors already incorporate these additional requirements into their 
business practices. The Department estimates the costs for vetting the 
host employers and participant placements for all Summer Work Travel 
sponsors at $2.18 million [\1/2\ x (2 hrs. x $20/hr. x 109,000 
participants)].
    Total Costs. The Department estimates that total costs to sponsors 
from implementation of the 2012 IFR requirements are estimated at $4.37 
to $4.38 million in the first year. Recurring costs for the 2012 IFR 
requirements are estimated at $4.36 million for the cultural component 
of the program and the additional vetting, reporting, and recordkeeping 
component of the program.
    Benefits. The 2012 IFR is a continuation of efforts the State 
Department is implementing based on a comprehensive review of the 
Summer Work Travel Program. The Department issued the 2011 IFR based on 
this review. However, events that occurred in the summer of 2011 
confirmed to the Department that it needed to enhance its scrutiny of 
the Summer Work Travel Program and take additional steps to amend 
regulations to protect program participants. Several foreign 
governments and entities complained to the Department about job 
placements, work conditions, and participant accommodations. 
Additionally, in recent years, the work component of the Summer Work 
Travel Program has too often overshadowed the core cultural component 
necessary for the Program to be consistent with the Fulbright-Hays Act.
    The changes included in the 2012 IFR bear most directly on the 
health, safety, and welfare of the participants and serve to reinforce 
the cultural exchange aspects of the program to promote mutual 
understanding in accordance with the Fulbright-Hays Act. These changes 
are expected to protect/improve the health, safety, and welfare of 
participants by reducing the number of improper or unsafe job 
placements, fraudulent job offers, post-arrival job cancellations, 
inappropriate work hours, and problems regarding housing and 
transportation. Additionally, these changes are designed to help ensure 
participants are properly compensated, thereby helping to defray their 
travel costs.
    The cultural dimension of the Summer Work Travel Program experience 
is essential to all participants. The changes in the 2012 IFR require 
sponsors to consider the cultural component in all placement decisions. 
However, rather than mandating a specific type of cultural program, the 
Department offers flexibility in implementing this requirement. This 
cultural component is essential to promoting cultural exchanges with 
foreign governments. A number of foreign governments have unequivocally 
informed the Department that they regard this program as important to 
their bilateral relationship with the United States and also important 
to their nationals who seek to participate in that program. 
Participating countries, therefore, look to the Department to keep the 
program alive but to fix it in a way that helps protect their 
nationals. These changes help accomplish this goal.
    The changes in the 2012 IFR will allow the United States government 
to better regulate the sponsors in order to protect participants, the 
program itself and U.S. communities that support Summer Work Travel 
participants. Sponsors are also required to take more active roles in 
ensuring that participants have access to suitable, affordable, and 
safe housing and reliable and affordable transportation between their 
residences and worksites. These changes will help ensure the health, 
safety, and welfare of participants as well as promote the intent of 
the Fulbright-Hays Act through cultural exchanges.

Executive Order 12988

    The Department of State has reviewed this interim final rule in 
light of Sec. 3(a) and 3(b)(2) of Executive Order 12988 to eliminate 
ambiguity, minimize litigation, establish clear legal standards, and 
reduce burden.

Executive Orders 12372 and 13132

    This regulation will not have 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, it is determined that this 
interim final rule does not have sufficient federalism implications to 
require consultations or warrant the preparation of a federalism 
summary impact statement. Executive Order 12372, regarding 
intergovernmental consultation on federal programs and activities, does 
not apply to this regulation.

Paperwork Reduction Act

    The information collection requirements contained in this interim 
final rule (2012 IFR) are pursuant to the Paperwork Reduction Act, 44 
U.S.C. chapter 35 and OMB Control Number

[[Page 27608]]

1405-0147, Form DS-7000. As part of this rulemaking, the Department is 
seeking comment regarding the additional administrative burden placed 
on sponsors due to the corresponding requirements for the sponsors to 
maintain additional records in the administration of their programs 
(see 22 CFR 62.10(f)).
    (1) Type of Information Collection: Revision of a Currently 
Approved Collection.
    (2) Title of the Form/Collection: Recording, Reporting, and Data 
Collection Requirements Under 22 CFR part 62.
    (3) Agency form number: DS-7000.
    (4) Affected public: This is an expansion and continuation of an 
existing information collection utilized by the Bureau of Educational 
and Cultural Affairs in its administration and program oversight of the 
Exchange Visitor Program (J-Visa) under the provisions of the Mutual 
Educational and Cultural Exchange Act, as amended. The Department seeks 
comment from Summer Work Travel Program sponsors and other persons 
directly involved in the administration of the Summer Work Travel 
Program.
    (5) Change to information collected by the Department of State: The 
existing Placement Report and Foreign Entity Report data collections 
are current collections required by all Summer Work Travel sponsors, 
and due to electronic reporting, do not impose any further 
recordkeeping burden. The 2012 IFR requires Summer Work Travel sponsors 
to submit annual price lists for all foreign entities to the 
Department, which is expected to place a minimal additional 
administrative burden on the 49 currently designated Summer Work Travel 
program sponsors. The Department believes that the additional 
regulatory requirements for documenting interviews, monthly contact 
with participants, and vetting host employers are already a standard 
business practice; however, the new requirements will bring all 
sponsors into conformity with program administration and will add a 
minimal administration burden as well.
    Based on the current 2011 Foreign Entity Report, Summer Work Travel 
sponsors are working with approximately 960 foreign entities. The 
Department requires Summer Work Travel sponsors to conduct thorough 
vetting and institute formal agreements with each third party entity 
that assists in certain core programmatic functions. The Department 
believes this screening is already conducted in the routine 
administration and only foresees the additional cost of criminal 
background checks for those sponsors not already conducting such 
checks. In addition, the 2012 IFR requires Summer Work Travel sponsors 
to ensure that all participants have opportunities to interact 
regularly with U.S. citizens and experience U.S. culture during the 
work portion of their Summer Work Travel Programs and to accordingly 
organize events, trips, or other activities to provide them exposure to 
U.S. culture. The Department outlines the increased cost and burden 
hours associated with this collection requirement and discussed it 
fully in the Regulatory Flexibility Act/Executive Order 13272: Small 
Business section above.
    (6) You may submit comments by any of the following methods: Direct 
comments to the Department of State Desk Officer in the Office of 
Information and Regulatory Affairs at the Office of Management and 
Budget (OMB). You may submit comments by the following methods:
     Email: [email protected]. You must include the 
DS form number, information collection title, and OMB control number in 
the subject line of your message.
     Fax: 202-395-5806. Attention: Desk Officer for Department 
of State.
    (7) The Department seeks public comment on:
     Whether the collection of information is necessary for the 
proper performance of the functions of the agency, including whether 
the information will have practical utility;
     The accuracy of the agency's estimate of the burden of the 
collection of information, including the validity of the methodology 
and assumptions used;
     The quality, utility, and clarity of the information to be 
collected; and collection of information on those who are to respond, 
including through the use of appropriate automated, electronic, 
mechanical, or other technological collection techniques or other forms 
of information technology, e.g., permitting electronic submission of 
responses.
    (8) An estimate of the total number of respondents and the amount 
of time estimated for an average respondent to respond: The total 
number of respondents is estimated to be those 49 organizations 
designated by the Department to conduct the Summer Work Travel Program 
activities.
    (9) An estimate of the total annual public burden (in hours) 
associated with the collection: The Department calculates that the new 
requirements under the 2012 IFR may require up to two additional hours 
of work per placement for Summer Work Travel sponsors that include an 
additional half hour for participant orientation; one additional hour 
towards third party screening, vetting and monitoring; and an 
additional half hour for the recordkeeping of the cultural component 
that each Summer Work Travel participant receives.
    The Department estimates that for approximately half of the 109,000 
annual Summer Work Travel placements, a minimal additional burden will 
be imposed to the sponsors given current business practices of some 
sponsors with respect to vetting host employers. The total burden for 
vetting the host employers and participant placements for all Summer 
Work Travel sponsors is two hours, or 218,000 hours of work, which is 
an increase of one hour per placement. The increased burden will be 
imposed on those sponsors not currently documenting host employer 
interviews, obtaining references and court documents, financial 
viability, and housing being provided.
    In addition, the Department estimates that the vetting 
recordkeeping obligations of third party foreign agents is a standard 
business practice and that the total burden of a half hour per third 
party, should be added to the estimated half hour that it already takes 
to vet and establish contracts of the 960 existing foreign agents. The 
additional reporting of annual price lists for each foreign entity is 
expected to be minimal. There are approximately 960 foreign entities 
and the time to collect and report the price list is expected to be a 
half hour.

List of Subjects in 22 CFR Part 62

    Cultural exchange programs, Reporting and recordkeeping 
requirements.

    Accordingly, 22 CFR Part 62 is amended as follows:

PART 62--EXCHANGE VISITOR PROGRAM

0
1. The authority citation for Part 62 continues to read as follows:

     Authority: 8 U.S.C. 1101(a)(15)(J), 1182, 1184, 1258; 22 U.S.C. 
1431-1442, 2451 et seq.; Foreign Affairs Reform and Restructuring 
Act of 1998, Pub. L. 105-277, Div. G, 112 Stat. 2681 et seq.; 
Reorganization Plan No. 2 of 1977, 3 CFR, 1977 Comp. p. 200; E.O. 
12048 of March 27, 1978; 3 CFR, 1978 Comp. p. 168; the Illegal 
Immigration Reform and Immigrant Responsibility Act (IIRIRA) of 
1996, Pub. L. 104-208, Div. C, 110 Stat. 3009-546, as amended; 
Uniting and Strengthening America by Providing Appropriate Tools 
Required to Intercept and Obstruct Terrorism Act of 2001 (USA 
PATRIOT ACT), Pub. L. 107-56, section 416, 115 Stat. 354; and the 
Enhanced Border

[[Page 27609]]

Security and Visa Entry Reform Act of 2002, Pub. L. 107-173, 116 
Stat. 543.


0
2. Section 62.32 is revised to read as follows:


Sec.  62.32  Summer work travel.

    (a) Introduction. The regulations in this section (in combination 
with any other provisions of 22 CFR part 62, as applicable) govern 
participation in Summer Work Travel programs conducted by Department of 
State-designated sponsors pursuant to the authority granted the 
Department of State under Public Law 105-277.
    (b) Purpose. The purpose of this program is to provide foreign 
college and university students with opportunities to interact with 
U.S. citizens, experience U.S. culture while sharing their own cultures 
with Americans they meet, travel in the United States, and work in jobs 
that require minimal training and are seasonal or temporary in order to 
earn funds to help defray a portion of their expenses. Employment is of 
a seasonal nature when the required service is tied to a certain time 
of the year by an event or pattern and requires labor levels above and 
beyond existing worker levels. Employment is of a temporary nature when 
an employer's need for the duties to be performed is a one-time 
occurrence, a peak load need, or an intermittent need. It is the nature 
of employers' needs, not the nature of the duties that is controlling.
    (c) Duration of participation. Summer Work Travel participants are 
authorized to participate in the Exchange Visitor Program for up to 
four months during the long break between academic years as determined 
by the Department of State. Extensions of program participation are not 
permitted.
    (d) Participant screening and selection. In addition to satisfying 
the requirements set forth at Sec.  62.10(a), sponsors are solely 
responsible for adequately screening and making the final selection. 
The screening process requires that sponsors (or vetted foreign 
entities acting on their behalf) at a minimum must:
    (1) Conduct and document interviews with potential participants 
either in-person or by video-conference;
    (2) Verify proficiency in conversational English and reading 
comprehension through either recognized language tests administered by 
academic institutions or English language schools or through the 
required documented interviews;
    (3) Select applicants who demonstrate their intention to 
participate in the cultural aspects of the Summer Work Travel Program.
    (4) Confirm that at the time of application, applicants (including 
final year students) are enrolled full-time and pursuing studies at 
accredited post-secondary, classroom-based, academic institutions 
physically located outside of the United States and have successfully 
completed at least one semester, or equivalent, of post-secondary 
academic study.
    (e) Participant orientation. In addition to satisfying the 
requirements set forth at Sec.  62.10(b) and (c), sponsors must provide 
program participants, prior to participants' departures from their home 
countries, the following information and/or documentation:
    (1) A copy of the Department of State's Summer Work Travel 
Participant Letter;
    (2) A copy of the Department of State's Summer Work Travel Program 
Brochure;
    (3) The Department of State's toll-free help line telephone number;
    (4) The sponsor's 24/7 immediate contact telephone number;
    (5) Information advising participants of their obligations to 
notify their sponsors within ten days after they arrive in the United 
States and within ten days after they initially secure or change 
residences;
    (6) Information advising participants that they may not begin 
working at initial, replacement, or additional jobs until their 
sponsors have verified the terms and conditions of such employment and 
fully vetted their host employers as set forth at paragraph (n) of this 
section;
    (7) For participants with jobs secured prior to departing from 
selected home countries, documentation explaining the terms and 
conditions of such jobs and providing information about available 
housing and transportation to and from work;
    (8) Information explaining the cultural component of the Summer 
Work Travel Program, including guidance on how to best experience U.S. 
culture and/or descriptions of cultural opportunities arranged by the 
sponsor; and
    (9) Information explaining that sponsors will terminate the 
programs of participants who fail to comply with enumerated program 
regulations (i.e., reporting their arrivals, reporting changes of 
residence, not starting work at unverified jobs, responding to sponsor 
monthly outreach/monitoring efforts).
    (f) Cultural exchange. (1) Sponsors must ensure that all 
participants have opportunities to work alongside U.S. citizens and 
interact regularly with U.S. citizens to experience U.S. culture during 
the workday portion of their Summer Work Travel programs; and
    (2) Sponsors must ensure that all participants have opportunities 
to engage in cultural activities or events outside of work by planning, 
initializing, and carrying out events or other activities that provide 
participants' exposure to U.S. culture.
    (g) Participant placement. (1) Sponsors and third parties acting on 
their behalf may not pay or otherwise provide any incentive to 
employers to accept program participants for job placements with such 
employers.
    (2) Sponsors must confirm initial, replacement, and additional jobs 
placements of all Summer Work Travel Program participants before 
participants may start work by verifying, at a minimum, the terms and 
conditions of such employment and fully vetting their host employers as 
set forth at paragraph (n) of this section. Once participants have 
arrived in the United States and identified initial, replacement, or 
additional jobs, sponsors must vet such jobs within 72 hours.
    (3) Sponsors must not pose obstacles to job changes, but must offer 
reasonable assistance to participants wishing to change jobs regardless 
of whether their jobs were secured by the sponsors (direct-placed) or 
by the participants (self-placed).
    (4) Sponsors may place participants only in jobs that:
    (i) Are seasonal or temporary as defined in paragraph (b) of this 
section; and
    (ii) Provide opportunities for regular communication and 
interaction with U.S. citizens and allow participants to experience 
U.S. culture.
    (5) Sponsors may not place participants in jobs:
    (i) That require licensing;
    (ii) That are on the program exclusion list set forth at paragraph 
(h) of this section; or
    (iii) For which there is another specific J visa category (e.g., 
Camp Counselor, Trainee, Intern).
    (6) Sponsors may not place participants with staffing agencies 
unless the placements meet the following three criteria:
    (i) Participants must be employees of and paid by the staffing 
agencies;
    (ii) Staffing agencies must provide full-time, primary, on-site 
supervision of the participants;
    (iii) Staffing agencies must effectively control the work sites, 
e.g., have hands-on management responsibility for the participants.
    (7) Sponsors may not place participants with employers that fill 
non-seasonal or non-temporary job

[[Page 27610]]

openings with exchange visitors with staggered vacation schedules.
    (8) Sponsors must use extra caution when placing students in 
positions at employers in lines of business that are frequently 
associated with trafficking persons (e.g., modeling agencies, 
housekeeping, janitorial services).
    (9) Sponsors must consider the availability of suitable, affordable 
housing (e.g., that meets local codes and ordinances) and reliable, 
affordable, and convenient transportation to and from work when making 
job placements.
    (i) If employers do not provide or arrange housing and/or 
transportation, or if participants decline employer-provided housing or 
transportation, sponsors must actively and immediately assist 
participants with arranging appropriate housing and transportation.
    (ii) If employers provide housing and/or transportation to and from 
work, job offers must include details of all such arrangements, 
including the cost to participants; whether such arrangements deduct 
such costs from participants' wages; and the market value of housing 
and/or transportation in accordance with the Fair Labor Standards Act 
regulations set forth at 29 CFR part 531, if they are considered part 
of the compensation packages.
    (10) For participants who are nationals of non-Visa Waiver Program 
countries and participants who are nationals of Visa Waiver Program 
countries with job placements screened in advance by the sponsors 
(direct placement) or jobs found by the participants (self-placement), 
prior to issuing Form DS-2019, sponsors must vet the potential 
employers as set forth at paragraph (n) of this section, confirm the 
terms and conditions of the job offers, and input complete and correct 
data into the Student and Exchange Visitor Information System (SEVIS) 
pursuant to the requirements set forth in Sec.  62.70(f).
    (11) Sponsors of applicants who are nationals of Visa Waiver 
Program countries and who have not secured jobs prior to departing from 
their home countries must:
    (i) Ensure that such participants receive pre-departure information 
that explains how to seek employment and secure lodging in the United 
States, and clearly identifies the criteria for appropriate jobs set 
forth at paragraph (g) of this section and the categories of employment 
and positions that are on the program exclusion list set forth at 
paragraph (h) of this section;
    (ii) Ensure that such participants have sufficient financial 
resources to support themselves during their searches for employment;
    (iii) Assist participants who have not found suitable employment 
within one week of commencing their job searches;
    (iv) Instruct participants of their obligation to notify their 
sponsors when they obtain job offers (and that they cannot start such 
jobs until the sponsors vet them); and
    (v) Promptly (i.e., within 72 hours) confirm the initial jobs of 
such participants, at a minimum, by verifying the terms and conditions 
of such employment and fully vetting their host employers as set forth 
at paragraph (n) of this section.
    (h) Program exclusions. Sponsors must not place participants:
    (1) In positions that could bring notoriety or disrepute to the 
Exchange Visitor Program;
    (2) In sales positions that require participants to purchase 
inventory that they must sell in order to support themselves;
    (3) In domestic help positions in private homes (e.g., child care, 
elder care, gardener, chauffeur);
    (4) As pedicab or rolling chair drivers or operators;
    (5) As operators or drivers of vehicles or vessels for which 
drivers' licenses are required regardless of whether they carry 
passengers or not;
    (6) In positions related to clinical care that involves patient 
contact;
    (7) In any position in the adult entertainment industry (including, 
but not limited to jobs with escort services, adult book/video stores, 
and strip clubs);
    (8) In positions requiring work hours that fall predominantly 
between 10:00 p.m. and 6:00 a.m.;
    (9) In positions declared hazardous to youth by the Secretary of 
Labor at Subpart E of 29 CFR part 570;
    (10) In positions that require sustained physical contact with 
other people and/or adherence to the Centers for Disease Control and 
Prevention's Universal Blood and Body Fluid Precautions guidelines 
(e.g., body piercing, tattooing, massage, manicure);
    (11) In positions that are substantially commission-based and thus 
do not guarantee that participants will be paid minimum wage in 
accordance with federal and state standards;
    (12) In positions involved in gaming and gambling that include 
direct participation in wagering and/or betting;
    (13) In positions in chemical pest control, warehousing, catalogue/
online order distribution centers;
    (14) In positions with travelling fairs or itinerant 
concessionaires;
    (15) In positions for which there is another specific J category 
(e.g., camp counselor, intern, trainee); or
    (16) After November 1, 2012, in positions in the North American 
Industry Classification System's (NAICS) Goods-Producing Industries 
occupational categories industry sectors 11, 21, 23, 31-33 numbers (set 
forth at http://www.bls.gov/iag/tgs/iag_index_naics.htm).
    (i) Participant compensation. (1) Sponsors must inform program 
participants of Federal, State, and Local Minimum Wage requirements, 
and ensure that at a minimum, participants are compensated at the 
higher of:
    (i) The applicable Federal, State, or Local Minimum Wage (including 
overtime); or
    (ii) Pay and benefits commensurate with those offered to their 
similarly situated U.S. counterparts.
    (2) Sponsors must demonstrate that participants are also 
compensated according to the above standards in the following (and 
similar) situations:
    (i) The host employers provide housing and/or transportation as 
part of participants' compensation, but the compensation package does 
not explain that the lower hourly wage reflects such benefits; or
    (ii) The employers compensate participants on a ``piece'' basis 
(e.g., number of rooms cleaned). If at the end of each pay period, the 
participant's earnings under the piece rate do not equal at least the 
amount the participant would have earned had the participant been paid 
the predominant local wage as provided in subparagraph (1), the 
participant's pay must be supplemented at that time so that the 
participant's earnings are at least as much as the required local wage 
as provided in subparagraph (1).
    (3) Sponsors must ensure that appropriate assistance is provided to 
participants on an as-needed basis and that sponsors are available to 
participants (and host employers) to assist as facilitators, 
counselors, and information resources.
    (j) Monitoring. Sponsors must:
    (1) Maintain, at a minimum, monthly personal contacts with program 
participants. Such contact may be in-person, by telephone, or via 
exchanges of electronic mail (including a response from the 
participant) and must be properly documented. Sponsors must promptly 
and appropriately address issues affecting the participants' health, 
safety, and welfare identified through such contacts; and
    (2) Provide appropriate assistance to participants on an as-needed 
basis and be available to participants (and host employers) to assist 
as facilitators, counselors, and information resources.

[[Page 27611]]

    (k) Internal controls. Sponsors must utilize organization-specific 
standard operating procedures for training and supervising all 
organization employees. In addition, sponsors must establish internal 
controls to ensure that employers and/or foreign entities comply with 
the terms of agreements with such third parties involved in the 
administration of the sponsors' exchange visitor programs (i.e., affect 
the core programmatic functions).
    (l) Sponsors' use of third parties. (1) If sponsors utilize foreign 
third party entities to assist in fulfilling the core programmatic 
functions of screening and orientation that may be conducted outside 
the United States, they must first obtain written and executed 
agreements with such third parties. For the purpose of this section, 
U.S. entities operating outside the United States (or its possessions 
or territories) are considered foreign entities. At a minimum, these 
written agreements must:
    (i) Outline the obligations and full relationship between the 
sponsors and such third parties on all matters involving the 
administration of the sponsors' exchange visitor programs;
    (ii) Delineate the parties' respective responsibilities;
    (iii) Include annually updated price lists for Summer Work Travel 
Programs marketed by the foreign entities including itemizations of all 
costs charged to participants;
    (iv) Contain representations that such foreign entities will not 
engage in, permit the use of, or otherwise cooperate or contract with 
other third parties (including staffing or employment agencies or 
subcontractors) for the purpose of outsourcing any core programmatic 
functions of screening and orientation covered by the agreement; and
    (v) Confirm that the foreign entities agree not to pay or provide 
incentives to employers in the United States to accept program 
participants for job placements.
    (2) If sponsors utilize domestic third party entities to assist in 
fulfilling the core programmatic functions of orientation and promoting 
mutual understanding, they must first obtain written and executed 
agreements with such third parties. Domestic third parties engaged by 
sponsors may not engage or subcontract any other parties to assist in 
fulfilling these core programmatic functions. Only host employers may 
assist in providing orientation to program participants. At a minimum, 
these written agreements must:
    (i) Outline the obligations and full relationship between the 
sponsors and such third parties on all matters involving the 
administration of the sponsors' exchange visitor programs; and
    (ii) Delineate the parties' respective responsibilities.
    (m) Vetting third party foreign entities. Sponsors must undertake 
appropriate due diligence in the review of potential overseas agents or 
partners (i.e., foreign entities) who assist in fulfilling the 
sponsors' core programmatic functions that may be conducted outside the 
United States (i.e., screening and orientation) and must, at a minimum, 
annually review and maintain the following documentation for potential 
or existing foreign entities:
    (1) Proof of business licensing and/or registration to enable them 
to conduct business in the venue(s) where they operate;
    (2) Disclosure of any previous bankruptcy and of any pending legal 
actions or complaints against such an entity on file with local 
authorities;
    (3) Written references from three current business associates or 
partner organizations;
    (4) Summary of previous experience conducting J-1 Exchange Visitor 
Program activities;
    (5) Criminal background check reports (including original and 
English translations) for all owners and officers of the organizations;
    (6) A copy of the sponsor-approved advertising materials the 
foreign entities intend to use to market the sponsors' programs 
(including original and English translations); and
    (7) A copy of the foreign entity's notarized recent financial 
statements.
    (n) Vetting domestic third party entities. Annually, sponsors must 
undertake appropriate due diligence in the vetting of domestic third 
parties who assist in the promotion of mutual understanding and 
potential host employers.
    (1) Sponsors must ensure that third parties assisting in promoting 
mutual understanding (i.e., providing opportunities for participants to 
engage in cultural activities) are reputable individuals or 
organizations that are qualified to perform the activities agreed to 
and that they have sufficient liability insurance, if appropriate. All 
third parties that are registered business entities must be vetted 
according to the host employer procedures set forth in paragraphs 
(n)(2)(i) through (iii) of this section.
    (2) Sponsors must ensure that potential host employers are 
legitimate and reputable businesses by, at a minimum:
    (i) Making direct contact in person or by telephone with potential 
employers to verify the business owners' and/or managers' names, 
telephone numbers, email addresses, street addresses, and professional 
activities;
    (ii) Utilizing publicly available information, for example, but not 
limited to, state registries, advertisements, brochures, Web sites, 
and/or feedback from prior participants to confirm that all job offers 
have been made by viable business entities;
    (iii) Obtaining potential host employers' Employer Identification 
Numbers and copies of their current business licenses; and
    (iv) Verifying the potential host employers' Worker's Compensation 
Insurance Policy or equivalent in each state where a participant will 
be placed or, if applicable, evidence of that state's exemption from 
requirement of such coverage.
    (3) At the beginning of each placement season, sponsors must 
confirm:
    (i) The number of job placements available with host employers;
    (ii) That host employers will not displace domestic U.S. workers at 
worksites where they will place program participants; and
    (iii) That host employers have not experienced layoffs in the past 
120 days and do not have workers on lockout or on strike.
    (o) Host employer cooperation. Sponsors may place participants only 
with host employers that agree to:
    (1) Make good faith efforts to provide participants the number of 
hours of paid employment per week as identified on their job offers and 
agreed to when the sponsors vetted the jobs;
    (2) Pay eligible participants for overtime worked in accordance 
with applicable State or Federal law;
    (3) Notify sponsors promptly when participants arrive at the work 
sites to begin their programs; when there are any changes or deviations 
in the job placements during the participants' programs; when 
participants are not meeting the requirements of their job placements; 
or when participants leave their positions ahead of their planned 
departures;
    (4) Contact sponsors immediately in the event of any emergency 
involving participants or any situations that impact their health, 
safety, or welfare; and
    (5) In those instances when the employer provides housing or 
transportation, agree to provide suitable and acceptable accommodations 
and/or reliable, affordable, and convenient transportation.

[[Page 27612]]

    (p) Reporting requirements. Sponsors must electronically comply 
with the following reporting requirements utilizing Department-provided 
templates:
    (1) Submit placement reports on January 31 and July 31 of each 
year, identifying all Summer Work Travel Program participants who began 
exchange programs during the preceding six-month period. The reports 
must include the exchange visitors' names, SEVIS Identification 
Numbers, countries of citizenship or legal permanent residence, names 
of host employers, and the length of time it took non-pre-placed 
participants to secure job placements. For participants who change jobs 
or have multiple jobs during their programs, the report must include 
all such placements;
    (2) Maintain listings of all active foreign agents or partners on 
the Foreign Entity Report by promptly informing the Department of any 
additions, deletions, or changes to foreign entity information by 
submitting new versions of their reports that reflect all current 
information. Reports must include the names, addresses, and contact 
information, including physical and mailing addresses, telephone 
numbers, and email addresses of all foreign entities that assist the 
sponsors in fulfilling the provision of core programmatic services. 
Sponsors must utilize only vetted foreign entities identified in the 
Foreign Entity Report to assist in fulfilling the sponsors' core 
programmatic functions outside the United States, and they must inform 
the Department promptly when and why they have cancelled contractual 
arrangements with foreign entities; and
    (3) Submit annual participant price lists to the Department on 
January 31 of each year in a format approved by the Department to 
provide itemized breakdowns of the costs that exchange visitors must 
pay to both foreign agents and sponsors to participate in the Summer 
Work Travel Program on a country-specific (and, if appropriate, foreign 
agent-specific) basis.

    Dated: May 4, 2012.
Robin J. Lerner,
Deputy Assistant Secretary for Private Sector Exchanges, Bureau of 
Educational and Cultural Affairs, Department of State.
[FR Doc. 2012-11253 Filed 5-10-12; 8:45 am]
BILLING CODE 4710-05-P