As part of the Trump administration’s continuing focus on immigration issues, U.S. Immigration and Customs Enforcement (ICE) recently began investigating employers that sponsor foreign students working in the country after graduation. Specifically, ICE is seeking to verify compliance with a regulation that permits companies to employ foreign-born science, technology, engineering and mathematics (STEM) graduates from U.S. universities for up to three years.
For decades, these students could pursue one year of U.S. work authorization upon completing their degrees. But more recently, prompted by concerns the United States was losing vital, American-educated talent, the government amended the program known as Optional Practical Training (OPT) to allow certain graduates additional time to cultivate and apply their skills within the U.S. workforce.
Foreign graduates with qualifying STEM degrees from accredited U.S. schools may pursue an additional two years of work experience under the STEM OPT program. Sponsorship requires a U.S. employer to complete a detailed training plan and certify, under penalty of perjury, that it will deliver training in accordance with the plan, comply with other sponsorship obligations, and permit ICE to enforce the rules by conducting site visits.
The current STEM OPT regulation took effect in May 2016, but ICE only began conducting site visits this summer. The agency has been providing employers with at least 48 hours’ notice, as the regulation requires in non-exigent circumstances. ICE will email a Notice of Site Visit to the company official who signed the training plan, providing the date, time and location of the site visit, the employees whose training plans ICE would like to verify, and any individuals the officer would like to interview. This may include the STEM graduate, other management personnel within the employee’s value chain, and in-house immigration managers.
Thus far, it does not appear that the government is targeting a particular industry or type of employment. Immigration officers have focused on verifying the information provided in the training plan and how the graduate’s role relates to his or her STEM degree. Because the regulation requires the employer to have sufficient resources to provide on-site training and supervision, ICE also asks whether the STEM graduate works at a third-party site and who is responsible for his or her prescribed training and development.
It is too soon to know how widespread ICE site visits will become, but employers should use this opportunity to ensure their programs are compliant to minimize the potential for legal, financial, reputational and talent risks.
Identifying STEM OPT Employees
Risk assessment should begin by identifying who your STEM OPT employees are. This may not be easy if your organization does not mandate that sponsorships pass through a central, in-house immigration team or outside immigration counsel. Unlike with other U.S. work permits, such as H-1B visas, a STEM OPT employer is not required to submit an application to the government. Instead, the employer—often a hiring manager in a decentralized environment—works with the student to prepare and sign a training plan, which must be approved by the school that granted the STEM degree before the graduate may apply for employment authorization.
Especially now that site visits are occurring, in-house immigration professionals or outside immigration counsel should take ownership of the STEM OPT process if they have not already. At minimum, any STEM OPT training plan completed or executed by company personnel should be centralized for review, approval and guidance regarding the compliance and reporting obligations that must occur over a two-year period.
The training plan provides basic information about the sponsoring organization, the hours the STEM graduate is expected to work, and the components of his or her compensation. The employer has to describe the role the student will fill and how it will enhance the knowledge gained from his or her STEM degree, including a description of planned assignments and the degree-related knowledge, skills or techniques the student will gain from these duties. The employer must also explain how it will oversee and supervise the student as he or she works to attain the desired skills and measure the student’s progress towards these training goals.
Employers must report material changes to the approved training plan to the student’s school, specifically changes that would render the plan inaccurate. Compliance with this obligation necessitates regular monitoring of the employee’s job duties, location, compensation and advancement towards training goals throughout the two-year program. The manager or company official who signs the training plan may not be the one responsible for this monitoring. It is therefore crucial that the organization not only know who its STEM OPT graduates are but also assign personnel to monitor their progress at regular intervals.
The regulation requires that employers compensate STEM OPT graduates commensurate with the employer’s similarly situated U.S. workers. Depending on how the employer’s compensation system is structured, this may require an affirmative inquiry. Some hiring managers may be inclined to offer lower compensation to STEM OPT graduates based on their status as foreign students pursuing “training.” But if U.S. workers with similar credentials are performing essentially the same role, then the regulations require similar compensation.
If they do not have similarly situated U.S. workers, employers must compensate their STEM graduates on par with what other local employers pay comparable employees in the same occupation. The employer may obtain local wage data from published compensation surveys covering the occupation and geographic area.
Third-Party Concerns
The employer must also certify that its personnel will provide the STEM graduate with on-site supervision and training. Specifically, the regulation states, “The employer [must have] sufficient resources and personnel available and [be] prepared to provide appropriate training in connection with the specified opportunity at the location(s) specified in the [training plan].”
While this obligation applies to all STEM employers, its applicability to third-party placement was the subject of robust discussion and U.S. Department of Homeland Security (DHS) consideration during the rulemaking process. The agency responded to several comments seeking clarification on whether consulting and staffing agencies whose employees gain experience working at customer sites could serve as STEM OPT sponsors.
In its commentary on the final regulation, DHS explained that certain arrangements, including “temp” agencies, consulting companies that provide “labor for hire,” and “other relationships that do not constitute a bona fide employer-employee relationship” would not be suitable for STEM OPT sponsorship. Since the sponsor’s personnel must provide supervision and training at the graduate’s worksite, the agency reasoned that arrangements where the employment relationship between sponsor and graduate is unclear would likely not meet this regulatory requirement. The agency concluded, “Accordingly, DHS clarifies that students cannot qualify for STEM OPT extensions unless they will be bona fide employees of the employer signing the Training Plan, and the employer that signs the Training Plan must be the same entity that employs the student and provides the practical training experience.”
DHS concedes that employers whose employees carry out their duties at third-party client or customer sites may serve as STEM OPT sponsors so long as they maintain a bona fide employment relationship with the STEM OPT graduate and provide the graduate with on-site training and supervision. While the regulations refer to employer personnel providing training at the location where the STEM graduate performs his or her job, the law does not specify that the STEM graduate’s supervisor be permanently based in the same location or that in-person supervision occur at a specific cadence.
At the same time, STEM OPT sponsorship is not appropriate in cases where the indications of an employment relationship between sponsor and STEM graduate are not strong, such as with employers who serve merely as payroll and benefits providers, or where the sponsor places a STEM graduate at a third-party site and is uninvolved in his or her training and development.
Employers in the consulting industry, or with similar business models, should consider the government’s discussion of third-party placement when establishing STEM OPT programs and evaluating compliance and related risks. This means assessing whether the STEM graduate’s direct supervisor regularly works in the same location.
If not, employers should ensure the STEM graduate receives supervision from company staff on a routine basis through calls, emails or video conferences where the employer provides constructive feedback and monitors the STEM graduate’s progress. It is also important that in-person, on-site meetings between supervisor and STEM graduate take place at scheduled intervals.
Potential Site Visit Consequences
In the event of a site visit, the employer must be prepared to demonstrate how it supervises and trains the STEM graduate in keeping with the training plan and has the “right to control” the graduate’s employment, as this right is fundamental to a bona fide employment relationship. Where the STEM graduate and supervisor are not normally in the same location, the more evidence the employer can provide on how it ensures meaningful supervision and training, including the protocols in place to deliver that training, the easier it will be for ICE to confirm compliance.
Violations of STEM OPT rules can mean serious consequences for the employer and sponsored graduate. Criminal penalties under 18 U.S.C. 1001, including up to five years in prison, may apply to a corporate signatory who executes a training plan knowing it contains materially false representations. If a site visit reveals the STEM graduate’s employment is materially inconsistent with the training plan or that the sponsor or student has failed to comply with regulatory obligations, this could result in termination of the STEM graduate’s lawful immigration status and his or her removal from the United States. The employer, in turn, can lose a valuable resource and, depending on the gravity and frequency of a sponsor’s compliance failures, ICE could prohibit the employer from sponsoring STEM OPT graduates in the future. Given the low unemployment rate for STEM professionals and the limited availability of other U.S. work permits, such as H-1B visas, banning STEM OPT sponsorship could have significant consequences for an organization’s competitive position.
In addition, while STEM OPT site visits are not designed to enforce other workplace immigration rules, if ICE finds evidence of other immigration-related violations during the visit, the agency may address the violation or refer it to the appropriate agency or ICE unit.
Employers need to be aware of whom the company is sponsoring for STEM OPT and who is executing training plans and certifying compliance with all program rules. As greater focus is placed on immigration in the United States, strict adherence to these conditions will help employers avoid costly penalties and retain valuable members of their workforce.