IMPACT – HIGH

U.S. Citizenship and Immigration Services (USCIS) announced today that it has updated its website to indicate that STEM OPT F-1 students are now permitted to engage in training programs that take place at a third-party worksite, such as a client site, as long as all training obligations and requirements are met. The update removes language that the agency had previously added to its website without notice stating that STEM OPT students were prohibited from being placed at client sites.

Key points:

  • Employers may place students who are on the Optional Practical Training (OPT) extension for students in science, technology, math, and engineering (STEM) fields at a site other than the employer’s principal place of business as long as they meet all training obligations, including demonstrating a bona fide employment relationship.
  • The employer who signs the training plan must have a bona fide employer-employee relationship with the student and maintain such a relationship.
  • The Department of Homeland Security will review on a case-by-case basis whether a student is a bona fide employee of the employer and whether the employer who signs the training plan is the same entity that employs the student and provides the practical training experience.

Background: Earlier this year, USCIS quietly updated its website to explicitly prohibit employers from placing STEM OPT students at third-party worksites. However, the STEM OPT regulation did not prohibit third-party placements as long as the employer could prove that it retained the required control and supervision over the student. The change in policy was not officially promulgated or announced, and USCIS did not issue guidance on the new prohibition.

The update caused uncertainty for employers and students, particularly in light of a separate USCIS policy change that altered how “unlawful presence” is calculated for foreign students and exchange visitors. In July, a trade association for IT staffing companies filed a federal lawsuit alleging that the government violated the Administrative Procedure Act by implementing the third-party placement policy without going through the formal notice-and-comment rulemaking process.

BAL Analysis: The USCIS announcement allows employers to place STEM OPT students at offsite locations and provides greater clarity to employers after months of uncertainty. Before placing a student at a third-party worksite, employers should consult with counsel and be prepared to demonstrate that the student is and will remain their bona fide employee and have practices in place to meet all compliance and reporting obligations under the STEM OPT regulations. The student and employer must report all material changes to the designated school official (DSO) as soon as possible; the employer must report a student’s termination or departure within five business days; and the student must report certain changes, such as changes to the employer’s name and address, within 10 business days.

This alert has been provided by the BAL U.S. Practice group. For additional information, please contact berryapplemanleiden@bal.com.

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