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Jun 7, 2018

STEM OPT Third-Party Placements Placed in Doubt

Joshua H. Rolf and Jonathan A. Grode

Since May 2016, F-1 STEM graduates have enjoyed up-to three years of employment authorization through post-completion Optional Practical Training (“OPT”). In issuing its final rule to increase STEM OPT extensions from 17 to 24 months, USCIS placed additional burdens on employers and F-1 students alike, including both parties completing/updating a training plan, as well as setting tighter restrictions on self-employment and unpaid work. Following a recent change to its website, USCIS appears to have placed an additional limit on STEM OPT employment – a prohibition on third-party placements.

USCIS’ position on this issue derives from one of the new requirements that accompanied the 24-month STEM OPT Extension. Namely, all Form I-765 Applications for STEM OPT Extensions must include a Training Plan completed on Form I-983. In this Form, the STEM OPT Employer must confirm, amongst other items, that there exists a valid “employer-employee” relationship between the STEM OPT employee, and the employer executing the Training Plan. Both the STEM OPT employer providing the training and the STEM OPT employee receiving the training described therein must execute this Training Plan.

While we interpreted these attestations to limit self-employment and volunteer/unpaid work, as well as work placements through staffing agencies, this requirement should not prohibit all third-party work placements. Indeed, the existence of a valid “employer-employee” relationship – that an employer retains control over the manner and methods of an employee’s job duties, evaluates performance, directly compensates them for services rendered, and has the power to terminate his/her employment – is a well-known principle in employment-based immigration. Indeed, it is a key element of H-1B employment – and, probably not by coincidence, one that has also come under closer scrutiny from USCIS.

For this reason, it makes sense that USCIS’ website for STEM OPT advises that:

STEM OPT employer may not assign, or otherwise delegate, its training responsibilities to a non-employer third party (e.g., a client/customer of the employer, employees of the client/customer, or contractors of the client/customer).

Shifting the responsibility for overseeing a STEM OPT employee’s training to a third-party would suggest that the STEM OPT employer does not ultimately exercise the requisite level of control to maintain a valid “employer-employee” relationship. By analogy, an H-1B worker placed at a third-party worksite would not comply with the applicable Regulations if that third-party performed the H-1B employee’s performance review.

However, whereas a valid “employer-employee” relationship may exist in the H-1B context, USCIS’ recent alteration to its website suggests that such arrangements are prohibited for employees with STEM OPT. Specifically, USCIS changed its website to read, in pertinent part:

For instance, the training experience may not take place at the place of business or worksite of the employer’s clients or customers because ICE would lack authority to visit such sites.

(Emphasis added).

Under this guidance, no third-party placement for STEM OPT employees is allowed – even if there exists a valid employer-employee relationship between the STEM OPT employer and employee at this work location. Even if this direct supervision would qualify as a valid “employer-employee” relationship for H-1B purposes.

For example – Automation Company has a contract with Pharmaceutical Manufacturer to design and install a new production system that utilizes Automation Company’s advanced, proprietary technology. In the H-1B context, with sufficient proof of direct supervision/control, an employee could be stationed at this client-site to perform the analysis, installation, and testing needed to complete the project. However, according to USCIS’ website, this situation in which a valid employer-employee relationship could exist, in which the STEM OPT employee is receiving valuable training from its STEM OPT employer, is categorically prohibited.  

According to the American Immigration Lawyers Association (“AILA”), “[t]his issue has been brought to the attention of DHS and interested members of Congress through industry groups and others and we understand that the issue is currently under review. “ We will also continue to monitor this situation as it unfolds. If you are a STEM OPT employer or employee and have questions regarding the validity of your STEM OPT work, please do not hesitate to contact our office.

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