The Optional Practical Training (OPT) program allows foreign students on F-1 visa to work for 12 (or up to 29 months, for holders of STEM degrees). The 12 (or 29) month period allows many students to apply for an H-1B work visa. Many employers (and OPT holders alike) are unaware of what happens when the OPT document expires while the H-1B application is pending. This guide seeks to provide some answers.
The Cap Gap
If the employer employs an F-1 nonimmigrant student on post-completion (OPT) and that student is the beneficiary of a pending or approved H-1B petition, the student may be able to continue working beyond the expiration date on his or her employment authorization document (EAD). In recent years, the number of H-1B petitions filed per year has exceeded the annual cap. Due to demand, the annual cap of 65,000 H-1B visas has been met during the initial filing period, beginning on April 1. All cap-subject petitions filed during this initial filing period indicate a requested start date of October 1 (the start of the government fiscal year). In the past, F-1 students who were the beneficiaries of an H-1B petition often had their F-1 status expire before their H-1B status began on October 1 –- a period known as the cap gap. The most common situation occurred when a student’s OPT ended in the spring or early summer, and the student’s F-1 status expired 60 days after that, leaving a gap of several months before the individual’s H-1B status began on October 1.
The OPT Interim Final Rule
On April 8, 2008, the Department of Homeland Security published an Interim Final Rule (IFR) titled, Extending Period of Optional Practical Training by 17 Months for F-1 Nonimmigrant Students With STEM Degrees and Expanding Cap-Gap Relief for All F-1 Students With Pending H-1B Petitions. The changes made by this rule became effective upon publication of the rule.
One provision of the rule applies to F-1 students who are the beneficiaries of a pending or approved H-1B petition that is subject to the annual cap. The IFR automatically extends the F-1 status and, for students in a period of approved post-completion OPT when the H-1B petition is filed, the OPT employment authorization.
The cap-gap extension of OPT is automatic for eligible students. A student does not file an application for the extension or receive a new EAD to cover the additional time. The only proof of continued employment authorization currently available to an affected student is an updated Form I-20 showing an extension of OPT, on page 3. This document serves as proof of continued employment authorization. However, this automatic extension of an F-1 student’s duration of status and employment authorization is terminated upon the rejection, denial, or revocation of the H-1B petition filed on the F-1 student’s behalf.
A student who is eligible for the cap-gap extension must work with a designated school official (DSO) at the student’s school to receive an updated Form I-20. If a student is eligible for the cap-gap extension of OPT, the student can continue to work while the update to his or her Form I-20 is being processed. Because the cap-gap extension is automatic, the updated Form I-20 is not required for a student to continue working; it merely serves as proof of the extension of OPT employment authorization.
To assist a student in obtaining an updated Form I-20, the employer may need to provide the student with an I-797 receipt or approval notice issued by USCIS for the H-1B petition filed on the student’s behalf. This receipt notice serves as proof of filing the H-1B petition and may need to be submitted to SEVP in order to update a student’s Form I-20 to show eligibility for the cap-gap extension.No comments
We wrote last week about the new Employer Handbook which was released by USCIS in connection with the revised Form I-9. The revised version of Form I-9 becomes mandatory on April 3, 2009 (barring any last-minute change by the Obama administration). Employers will have to complete the new Form I-9 for all newly hired employees to verify their credentials and authorization to work in the United States.
Obtain the new version of Form I-9.No comments
USCIS has released a memorandum, dated March 20, 2009, which provides additional clarifications about H-1B sponsorship by companies which are recipients of TARP funds. We have written extensively about these restrictions earlier this year but there were still questions outstanding. This USCIS guidance should provide final clarify on the subject.
The restrictions apply to any Labor Condition Application (LCA) and/or H-1B petition filed on or after Feb. 17, 2009, involving any employment by a new employer, including concurrent employment and regardless of whether the beneficiary is already in H-1B status. The EAWA also applies to new hires based on a petition approved before Feb. 17, 2009, if the H-1B employee had not actually commenced employment before that date.
However, one of the main questions after the Stimulus Bill passed was whether the new rule would apply for existing H-1B holders at TARP companies. The USCIS memorandum makes it clear that the restrictions do not apply to H-1B petitions seeking to change the status of a beneficiary already working for the employer in another work-authorized category. It also does not apply to H-1B petitions seeking an extension of stay for a current employee with the same employer.No comments
USCIS has released an updated Employer Handbook, Instructions for Completing Form I-9. The new handbook describes in detail the requirements imposed by Form I-9, Employment Eligibility Verification. Note that the new handbook contains procedures which should be used only on or after April 3, 2009.1 comment
CNNfn.com has an interesting article on the H-1B visas demand for this April’s H-1B quota. The article cites the weak economy, the H-1B restrictions imposed recently on TARP recipients and the bankruptcy of Satyam Computer Services (which filed ~2,000 H-1Bs in 2008) as one of the reasons that the H-1B demand will be weakest in years. The article suggests that it may take several weeks to fill the entire H-1B quota this April (as opposed to a few days over the past years).
We do not have good estimates that the H-1B demand will be less than the 65,000 (plus additional 20,000) and as a result there will not be a lottery to distribute the available visa. However, we do agree wholeheartedly with the article that the H-1B demand this April is likely to be the weakest it has been in many years.No comments
The cap-subject H-1B filing deadline of April 1 is approaching quickly. USCIS has advised that similar to last April’s filing window, this year, in the event that there are more H-1B applications than there are available visas (i.e. there will be a lottery), the filing window would be five (5) days, from Tuesday, April 1 until and including Tuesday, April 7th.
Some of our H-1B clients ask whether the recession will impact the H-1B processing and we understand that despite the slowdown in the economy, there is an expectation that there will be more than 65,000 H-1B visas which would result in there being a lottery to distribute the available H-1B numbers.
We would be happy to help you or your company with preparing and filing an H-1B cap-subject visa application this April. If you need our help and services, please contact us at your earliest convenience.No comments
A week after the Stimulus Bill was signed into law and the dust has started to settle, we have compiled a summary of the key points of the Stimulus Bill’s restriction on TARP-recipient companies to issue new H-1B visas. The law became effective upon the stimulus bill’s enactment, February 17, 2009. It is important to note that the law will remain effective for only two years after its enactment. Thus, it will sunset on February 16, 2011.
Final Text of the Stimulus Bill Imposing the H-1B Limitations
Section 1611 of the American Recovery and Reinvestment Act of 2009 (“ARRA”) reads:
SEC. 1611. HIRING AMERICAN WORKERS IN COMPANIES RECEIVING TARP FUNDING.
(a) SHORT TITLE.—This section may be cited as the ‘‘Employ American Workers Act’’.
(1) IN GENERAL.—Notwithstanding any other provision of law, it shall be unlawful for any recipient of funding under title I of the Emergency Economic Stabilization Act of 2008 (Public Law 110–343) or section 13 of the Federal Reserve Act (12 U.S.C. 342 et seq.) to hire any nonimmigrant described in section 101(a)(15)(h)(i)(b) of the Immigration and Nationality Act (8 U.S.C. 1101(a)(15)(h)(i)(b)) unless the recipient is in compliance with the requirements for an H–1B dependent employer (as defined in section 212(n)(3) of such Act (8 U.S.C. 1182(n)(3))), except that the second sentence of section 212(n)(1)(E)(ii) of such Act shall not apply.
(2) DEFINED TERM.—In this subsection, the term ‘‘hire’’ means to permit a new employee to commence a period of employment.
(c) SUNSET PROVISION.—This section shall be effective during the 2-year period beginning on the date of the enactment of this Act.
What Exactly Are the H-1B Restrictions?
Covered companies are not allowed to “hire” an H-1B worker unless the company has complied with additional LCA attestations which are generally imposed on H-1B dependent employers. These additional attestations are:
(1) that the employer has, prior to filing the H-1B petition, taken good-faith steps to recruit U.S. workers for the position for which the H-1B worker is sought, offering a wage that is at least as high as that required under law to be offered to the H-1B worker. The employer must also attest that, in connection with this recruitment, it has offered the job to any U.S. worker who applies and is equally or better qualified for the position; and
(2) that the employer has not laid off, and will not lay off, any U.S. worker in a job that is essentially equivalent to the H-1B position in the area of intended employment of the H-1B worker within the period beginning 90 days prior to the filing of the H-1B petition and ending 90 days after its filing.
Which Employers Are Covered Under the H-1B Restriction?
A company which receives funding under title I of the Emergency Economic Stabilization Act of 2008 (Public Law 110-343, the “TARP Bill”) or that receives funding under Section 13 of the Federal Reserve Act (12 U.S.C. § 342 et seq., authorizing the Federal Reserve’s “Discount Window” for short-term, secured loans to financial institutions and other companies) is covered under the H-1B restriction. USA Today has a chart with names of the TARP companies and the U.S. Treasury has a list of transaction reports under the TARP program.
Note that companies recipients of funds pursuant to the ARRA stimulus bill, but not under the TARP Bill, are not subject to the H-1B restriction.
Are There Exemptions?
Generally, employers who are H-1B dependent can claim one of two exemptions – having salary higher than $60,000 or having a master’s degree – and avoid having to provide the additional attestations. However, these two exemptions have been made explicitly unavailable to TARP companies.
What Happens to H-1B Workers at Existing TARP Companies?
The statute is drafted to prohibit any “new hires” between February 17, 2009 and February 16, 2011. “Hire” is defined as permitting “a new employee to commence a period of employment.” As a result, it seems that the H-1B restrictions do not apply to H-1B workers who are already employeed at the TARP companies. However, neither USCIS nor DOL have issued implementation guidance or regulations yet, so it is not completely certain that they will take the same view.2 comments
In late January we wrote an article which described the immigration implications and options available to H-1B workers who have been laid off or otherwise terminated from their employment. Our article was prompted by a Vermont Service Center (VSC) AILA Liaison guidance and has generated a fair amount of interest and comments.
Work Allowed While H-1B Transfer Pending Even if There is a Gap in Employment
Just this week, VSC’s AILA Liaison provides some clarifications which, in these difficult economic times, provide a fair amount of relief to terminated H-1B workers. Our article, and the previous guidance from VSC, indicated that in order to be eligible to “port” to a new H-1B employer, the new H-1B petition must be filed before termination or before the old petition is revoked or withdrawn by the old employer.
However, if the H-1B portability criteria are met, then the foreign national would be eligible to work pursuant to H-1B portability upon filing the H-1B transfer application even if s/he was not eligible for an extension or change of status. The H-1B portability criteria are: (1) the foreign national was lawfully admitted; (2) the new H-1B petition is “nonfrivolous;” (3) the new H-1B petition was filed before the date of expiration of period of authorized stay (as described on the I-94 card); and (4) subsequent to lawful admission, the foreign national has not been employed without authorization. (INA § 214(n))
For example, if an H-1B employee is terminated on February 1, and her employer requests revocation of her H-1B on February 1, then the H-1B status is automatically revoked pursuant to 8 C.F.R. § 214.2(h)(11)(ii). However, the foreign national remains in the U.S. and finds a job on March 1 and the new employer files a new, non-frivolous H-1B petition on her behalf. Since the foreign national was lawfully admitted, the petition is non-frivolous, the I-94 was not expired, and she has not worked without authorization between February 1 and March 1, then the foreign national is eligible to start work under INA § 214(n).
Scenarios Upon Approval of Pending H-1B Transfer Application
The foreign national is eligible to work until the petition is adjudicated. Once the H-1B petition is approved, this “interim” authorization to work ceases, and one of two things can happen. One, USCIS will use its discretion and approve an extension of status and the employee will continue to be able to work for the new sponsoring employer. Or, two, USCIS will deny the extension of status request and the employee will have to depart the U.S., and either obtain an H-1B visa at a U.S. consulate, or, if she already has a valid H-1B visa from her former employer, she will simply need to depart the U.S. and, upon re-entry, present her old visa with the new I-797 and continue working.
The guidance from VSC makes it easy for employees to understand their options in the event their H-1B employment is terminated. Working for the new H-1B employer while the application is pending allows an employee to continue to receive income especially when there is a period of unemployment between the old H-1B employment and the new one. However, it should be noted that it is possible that USCIS may decline to “forgive” the period of unemployment between the two H-1B jobs and as a result the foreign national will have to travel outside of the U.S.No comments
About the H-1B Visa and the Annual H-1B Cap
The H-1B visa is one of the most commonly used U.S. work visas for highly skilled foreign born workers in fields such as information technology, engineering, research, academia, and others. The H-1B visa is both highly desirable and, unfortunately, in short supply.
The H-1B visa category was created in 1990 through the Nationality and Immigration Act of 1990 (INA). An H-1B job must require a bachelor’s degree or equivalent and the foreign national must have a bachelor’s degree or equivalent in a field of study that is related to the job. Upon the creation of the H-1B visa type, INA imposed a numerical limitation (“cap”) on the number of H-1Bs that could be issued in each fiscal year. This “cap” (or quota) has varied over the past years but is set to 65,000 per year for the 2010 Fiscal Year starting on October 1, 2009. As part of the Visa Reform Act which went into effect as of May 5, 2005, an extra 20,000 H-1B visas were made available to foreign nationals graduating with a US Master’s or higher degree from a US institution. These 20,000 are counted in addition to the annual cap of 65,000 visas.
Who is Counted Towards the Cap?
Most H-1B applications are subject to the annual cap. Generally, all H-1B petitions which are filed for a new employment of an H-1B beneficiary (whether the foreign national is current outside of the U.S. or in the U.S. on a different visa type) and where the beneficiary has never held an H-1B visa in the past six years are subject to the cap.
However, some H-1B petitions are cap-exempt. Petitions filed by institutions of higher education or their affiliates or by non-profit or government research organizations are not subject to the H-1B cap (see our Guide to H-1B Cap-Exempt Employers) Additionally, H-1B petitions where the beneficiary has had H-1B visa approved within the last six years are also exempt – in many cases such cases are H-1B employer transfers or changes in terms of employment.
What is H-1B Season?
All H-1B petitions which are subject to the cap must be filed on April 1 with a starting date of not earlier than October 1. The demand for H-1B visas over the past several years has far exceeded the available 85,000 H-1B visas and as a result the government has instituted a lottery which randomly determines which H-1B applications submitted on or shortly after April 1 are to be considered. Because of this limited window of opportunity, H-1B petitions which are subject to the cap must be filed on April 1 or a day or two afterwards. Petitions filed late are automatically rejected. As a result, the months of February and March are generally referred to as the “H-1B Cap Season” because this is the only time of the year when H-1B cap cases can be prepared and filed.
Deadline is April 1
The H-1B Season is underway. We are already receiving many new H-1B cap inquiries and we are starting to get very busy with new H-1B cap applications. Because cap-subject H-1B applications have only one opportunity to be filed per year, it is very important that each application be properly prepared and timely filed and we take extra effort to do so. We still accept new cases so please contact us for a free initial consultation and evaluation on your case. We would be happy to evaluate whether your H-1B petition is subject to the cap and if so, guide you through the process.No comments
The final version of the stimulus bill, The American Recovery and Reinvestment Act of 2009 (H.R. 1, S. 1), was passed by the Congress late on Friday. The final version of ARRA included Senator Sanders’ amendment and the final version which is expected to be signed into law by President Obama on Tuesday, February 17th, will restrict the issuance of new H-1B visas by companies who are recipients of TARP funds. (List of TARP recpient companies)
We wrote and analyzed about the proposed amendment on Tuesday, February 10th, and we received a number of comments and reactions. There was a very intensive effort to try and defeat the Sanders amendment during the conference, but ultimately, the Sanders amendment survived the conference and made its way into the final stimulus bill.
Following the passage, one of the major issues with analyzing the bill were (1) ths size of ARRA and (2) the scanned PDF format in which it was distributed. Recognizing the urgency of the bill and its passage, we understand that to some extent transparency and convenience were sacrficed. However, the inability to properly parse the text of the bill delayed its analysis.
According to the Conference Report:
Section 1611 provides that it shall be unlawful for any recipient of funding of Title I of the Emergency Economic Stabilization Act of 2008 or section 13 of the Federal Reserve Act to hire any nonimmigrant described in section 101(a)(15)(h)(i)(b) of the Immigration and Nationality Act unless the recipient is in compliance with the requirements for an H-1B dependent employer as defined in that Act. This requirement is effective for a two-year period beginning on the date of enactment of this Act.
We would seek a final copy of the bill (as opposed to reading the PDF of the conference report) and post on this site any updates.No comments