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, 18944-18956 [E8-7427]

Agencies

• DEPARTMENT OF HOMELAND SECURITY

[Federal Register Volume 73, Number 68 (Tuesday, April 8, 2008)]
[Rules and Regulations]
[Pages 18944-18956]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-7427]


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DEPARTMENT OF HOMELAND SECURITY

8 CFR Parts 214 and 274a

[DHS No. ICEB-2008-0002; ICE No. 2124-08]
RIN 1653-AA56


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

AGENCY: U.S. Immigration and Customs Enforcement, U.S. Citizenship and 
Immigration Services; DHS.

ACTION: Interim final rule with request for comments.

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SUMMARY: Currently, foreign students in F-1 nonimmigrant status who 
have been enrolled on a full-time basis for at least one full academic 
year in a college, university, conservatory, or seminary certified by 
U.S. Immigration and Custom Enforcement's (ICE's) Student and Exchange 
Visitor Program (SEVP) are eligible for 12 months of optional practical 
training (OPT) to work for a U.S. employer in a job directly related to 
the student's major area of study. This interim final rule extends the 
maximum period of OPT from 12 months to 29 months for F-1 students who 
have completed a science, technology, engineering, or mathematics 
(STEM) degree and accept employment with employers enrolled in U.S. 
Citizenship and Immigration Services' (USCIS') E-Verify employment 
verification program. This interim rule requires F-1 students with an 
approved OPT extension to report changes in the student's name or 
address and changes in the employer's name or address as well as 
periodically verify the accuracy of this reporting information. The 
rule also requires the employers of F-1 students with an extension of 
post-completion OPT authorization to report to the student's designated 
school official (DSO) within 48 hours after the OPT student has been 
terminated from, or otherwise leaves, his or her employment with that 
employer prior to end of the authorized period of OPT.
    This rule also ameliorates the so-called ``cap-gap'' problem by 
extending the authorized period of stay for all F-1 students who have a 
properly filed H-1B petition and change of status request (filed under 
the cap for the next fiscal year) pending with USCIS. If USCIS approves 
the H-1B petition, the students will have an extension that enables 
them to remain in the United

[[Page 18945]]

States until the requested start date indicated in the H-1B petition 
takes effect. This interim final rule also implements a programmatic 
change to allow students to apply for OPT within 60 days of concluding 
their studies.

DATES: This interim final rule is effective April 8, 2008. Written 
comments must be submitted on or before June 9, 2008.

ADDRESSES: You may submit comments, which must be identified by 
Department of Homeland Security docket number ICEB-2008-0002, using one 
of the following methods:
     Federal Rulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments.
     Mail: Office of Policy, U.S. Immigration and Customs 
Enforcement, Department of Homeland Security, 425 I Street, NW., Room 
7257, Washington, DC 20536.
     Hand Delivery/Courier: The address for sending comments by 
hand delivery or courier is the same as that for submitting comments by 
mail. Contact telephone number is (202) 514-8693.
     Facsimile: Comments may be submitted by facsimile at (866) 
466-5370.
    Viewing Comments: Comments may be viewed online at https://
www.regulations.gov or in person at U.S. Immigration and Customs 
Enforcement, Department of Homeland Security, Chester Arthur Building, 
425 I Street, NW., Room 7257, Washington, DC 20536. You must call 
telephone number (202) 514-8693 in advance to arrange an appointment.

Public Participation

    This is an interim final rule with a request for public comment. 
The most helpful comments reference the specific section of the rule 
using section number, explain the reason for any recommended change, 
and include data, information, and the authority that supports the 
recommended change.
    Instructions: All submissions must include the agency name and 
Department of Homeland Security docket number ICEB-2008-0002. All 
comments (including any personal information provided) will be posted 
without change to https://www.regulations.gov. See ADDRESSES above for 
methods to submit comments. Mailed submissions may be paper, disk, or 
CD-ROM.

FOR FURTHER INFORMATION CONTACT: Louis Farrell, Director, Student and 
Exchange Visitor Program; U.S. Immigration and Customs Enforcement, 
Department of Homeland Security; Chester Arthur Building, 425 I Street, 
NW., Suite 6034, Washington, DC 20536; telephone number (202) 305-2346. 
This is not a toll-free number. Program information can be found at 
https://www.ice.gov/sevis/.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Background and Purpose
    A. Optional Practical Training and Need To Extend for F-1 
Students With STEM Degrees
    B. ``Cap-Gap'' and Need To Expand Relief to All F-1 Students 
With Pending H-1B Petitions
II. Discussion of This Interim Final Rule
    A. Extension of Optional Practical Training by 17 Months for F-1 
Students With STEM Degrees
    1. Requirements for Students Seeking a 17-Month OPT Extension
    2. Requirement for Employers of Students with a 17-Month OPT 
Extension
    B. Expansion of Cap-Gap Relief for All F-1 Students With Pending 
H-1B Petitions
    C. Related Changes to the OPT Provisions
    1. Changes to Post-Completion OPT
    2. Validation That OPT Employment Is Related to the Student's 
Degree Program
III. Regulatory Requirements
    A. Administrative Procedure Act
    B. Regulatory Flexibility Act
    C. Small Business Regulatory Enforcement Fairness Act of 1996
    D. Executive Order 12866
    E. Executive Order 13132
    F. Executive Order 12988 Civil Justice Reform
    G. Paperwork Reduction Act
List of Subjects in 8 CFR Part 214

                         Table of Abbreviations
------------------------------------------------------------------------
              Abbreviation                        Amplification
------------------------------------------------------------------------
APA....................................  Administrative Procedure Act
ASC....................................  Application Support Center
CEU....................................  Compliance Enforcement Unit
CBP....................................  U.S. Customs and Border
                                          Protection
CFR....................................  Code of Federal Regulations
DHS....................................  Department of Homeland Security
DSO....................................  Designated School Official
EAD....................................  Form I-766, Employment
                                          Authorization Document
ICE....................................  U.S. Immigration and Customs
                                          Enforcement
IIRIRA.................................  Illegal Immigration Reform and
                                          Immigrant Responsibility Act
                                          of 1996
INA....................................  Immigration and Nationality Act
                                          of 1952, as amended
INS....................................  Immigration and Naturalization
                                          Service
OMB....................................  Office of Management and Budget
OPT....................................  Optional Practical Training
RFA....................................  Regulatory Flexibility Act
SEVIS..................................  Student and Exchange Visitor
                                          Information System
SEVP...................................  Student and Exchange Visitor
                                          Program
STEM...................................  Science, Technology,
                                          Engineering, or Math
U.S....................................  United States
USA PATRIOT Act........................  Uniting and Strengthening
                                          America by Providing
                                          Appropriate Tools Required to
                                          Intercept and Obstruct
                                          Terrorism Act
USCIS..................................  U.S. Citizenship and
                                          Immigration Services
------------------------------------------------------------------------

I. Background and Purpose

A. Optional Practical Training and Need To Extend by 17 Months for F-1 
Students With STEM Degrees

    Section 101(a)(15)(F)(i) of the Immigration and Nationality Act of 
1952, as amended (INA), 8 U.S.C. 1101(a)(15)(F)(i), establishes the F-1 
nonimmigrant classification for individuals who wish to come to the 
United States temporarily to attend an academic or language training 
institution certified by the Student and Visitor Exchange Program 
(SEVP) for U.S. Immigration and Customs Enforcement (ICE). F-1 students 
may remain in the United States for the duration of their educational 
programs if they otherwise maintain status. 8 CFR 214.2(f)(5). Once an 
F-1 student has completed his or her course of study, and any 
authorized practical training following completion of studies, the 
student must either transfer to another SEVP-certified school to 
continue studies, change to a different nonimmigrant status, otherwise 
legally extend their period of authorized stay in the United States, or 
leave the United States. 8 CFR 214.2(f)(5)(iv). F-1 students are 
allowed 60 days after the completion of such studies and practical 
training to prepare for departure from the United States. 8 CFR 
214.2(f)(5)(iv).
    F-1 students generally are not authorized to work in the United 
States during the term of their educational program, with limited 
exceptions. Currently, students in F-1 nonimmigrant status who have 
been enrolled on a full-time basis for at least one full academic year 
in a college, university, conservatory, or seminary certified by SEVP, 
and have otherwise maintained status, are eligible to apply for up to 
12 months of optional practical training (OPT) to work for a U.S. 
employer in a job directly related to the student's major area of 
study. 8 CFR 214.2(f)(10). F-1 students may obtain OPT either during 
their educational program (``pre-completion OPT'') or after the student 
graduates (``post-completion OPT''). The student remains in F-1 status 
throughout the OPT period.

[[Page 18946]]

    An F-1 student in post-completion OPT, therefore, does not have to 
leave the United States within 60 days after graduation, but is 
authorized to remain in the United States for the entire post-
completion OPT period. If the student has not used any pre-completion 
OPT, then the student's post-completion OPT period could be up to 12 
months. Once the post-completion OPT period has concluded, the student 
must depart the United States within 60 days, unless he or she changes 
status or otherwise legally extends his or her stay in the United 
States (e.g., starts a graduate program).
    During his or her authorized period of stay, a qualified F-1 
student may receive a change of nonimmigrant status to H-1B 
nonimmigrant status if an employer has timely filed, and USCIS grants, 
a petition on behalf of that student. The employer must submit a Form 
I-129, Petition for a Nonimmigrant Worker to USCIS. The Form includes a 
section for the employer to indicate whether change of status is being 
requested for the beneficiary (if eligible), or whether the beneficiary 
will instead apply for a visa outside of the United States at a U.S. 
consulate. USCIS may grant H-1B status to eligible nonimmigrants 
employed in or offered a job by the petitioner in a specialty 
occupation. 8 CFR 214.2(h)(1)(ii)(B). A specialty occupation is one 
that requires the theoretical and practical application of a body of 
specialized knowledge and a bachelor's or higher degree in the specific 
specialty as a minimum qualification. INA Section 214(i).
    Congress, however, has prohibited USCIS from granting H-1B status 
to more than 65,000 nonimmigrant aliens during any fiscal year 
(referred to as the ``cap'').\1\ See INA Section 214(g). The H-1B 
category is greatly oversubscribed. When USCIS determines that the cap 
will be reached for that fiscal year, based on the number of H-1B 
petitions received, it announces to the public the final day on which 
USCIS will accept such petitions for adjudication in that fiscal year. 
USCIS refers to this day as the ``final receipt date.'' See 8 CFR 
214.2(h)(8)(ii)(B). USCIS then randomly selects from among the 
petitions received on the final receipt date the number of petitions 
necessary to reach the 65,000 cap. Id. If the final receipt date falls 
within the first five business days on which petitions subject to the 
applicable cap may be filed, USCIS will randomly select the number of 
petitions necessary to reach the 65,000 cap from among those filed 
during the acceptance period.
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    \1\ The 65,000 person cap does not, however, apply to certain 
limited classes of aliens, including individuals who are employed 
by, or have received offers of employment at: (1) An institution of 
higher education, or a related or affiliated nonprofit entity, or 
(2) a nonprofit research organization or a governmental research 
organization. Additionally, there is an exemption from the H-1B cap 
for up to 20,000 individuals who are advanced degree graduates 
(master's degree or higher) from U.S. institutions of higher 
education.
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    There is a significant amount of competition among employers of 
highly-skilled workers for the limited number of H-1B visas available 
each fiscal year. Each year, the cap has been reached earlier in the 
year. For FY05, the cap was reached on October 1, 2004, the first day 
of that fiscal year. In FY06, the cap was reached on August 10, 2005; 
and in FY 07, the cap was reached on May 26, 2006. Last year, the cap 
was reached on April 2, 2007, the first business day for filing. On 
that single day, USCIS received more than twice the number of petitions 
needed to reach the cap for that fiscal year.\2\
    Many employers who hire F-1 students under the OPT program 
eventually file a petition on the students' behalf for classification 
as an H-1B worker in a specialty occupation. If the student is 
maintaining his or her F-1 nonimmigrant status, the employer may also 
include a request to have the student's nonimmigrant status changed to 
H-1B. Because the H-1B category is greatly oversubscribed, however, OPT 
employees often are unable to obtain H-1B status within their 
authorized period of stay in F-1 status, including the 12-month OPT 
period, and thus are forced to leave the country. The inability of U.S. 
employers, in particular in the fields of science, technology, 
engineering and mathematics, to obtain H-1B status for highly skilled 
foreign students and foreign nonimmigrant workers has adversely 
affected the ability of U.S. employers to recruit and retain skilled 
workers and creates a competitive disadvantage for U.S. companies.
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    \2\ See USCIS Update at https://www.uscis.gov/files/pressrelease/
H1BFY08Cap040307.pdf.
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    The National Science Foundation (NSF), in its Science and 
Engineering Indicators 2008 (SEIND08),\3\ took note of these trends. 
NSF observed that globalization of science and technology has proceeded 
at a quick pace since the early 1990s. Increased international travel 
coincided with the development of the Internet as a tool for unfettered 
worldwide information dissemination and communication. ``By the late 
1990s,'' the report continues ``many governments had taken note of 
these developments. They increasingly looked to the development of 
knowledge-intensive economics for their countries' economic 
competitiveness and growth.'' SEIND08 at 0-4. NSF further reports that 
``twenty-five percent of all college-education science and engineering 
occupations in 2003 were foreign born, as were [forty percent] of 
doctorate holders in science and engineering.'' According to the Task 
Force on the Future of American Innovation, Measuring the Moment: 
Innovation, National Security and Economic Competitiveness (November 
2006),\4\ the proportion of American students in the United States 
obtaining degrees in STEM fields has fallen from 32% to 27%. Later, the 
report reveals that since 2000, there have been more foreign graduate 
students studying engineering and the physical, computer and 
mathematical sciences in U.S. graduate schools than U.S. citizens and 
permanent residents.
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    \3\ This publication may be found at https://www.nsf.gov/
statistics/seind08.
    \4\ This report may be accessed at https://
www.futureofinnovation.org/PDF/BII-FINAL-HighRes-11-14-06_
nocover.pdf.
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    The NSF goes on to say that ``U.S. [Gross Domestic Product] growth 
is robust but cannot match large, sustained increases in China and 
other Asian economies.'' And because of this globalization, the United 
States, while still the leading producer of scientific knowledge, faces 
a labor market in which it must increasingly compete with these 
countries. The economies of the Organization of Economic Cooperation 
and Development (OECD) countries, particularly Australia, Canada, and 
certain European countries, are also providing increased opportunities 
for STEM scientists. And STEM graduates from the growing economies of 
China, India, and Russia, for example, have increased employment 
opportunities in their native countries. Thus, the Task Force on the 
Future of American Innovation reports ``the impact of China and India 
on global R&D [research and development] is significant and growing 
rapidly: In 1990, these two countries accounted for 3.4% of foreign R&D 
staff, which increased to 13.9% by 2004. By the end of 2007, China and 
India will account for 31% of global R&D staff, up from 19% in 2004.'' 
See Measuring the Moment: Innovation, National Security and Economic 
Competitiveness (November 2006). In short, with their large and growing 
populations of STEM-graduate scientists, high-tech industries in these 
three countries and others in the OECD now compete much more 
effectively against the U.S. high technology industry.

[[Page 18947]]

    DHS has received communications from a wide range of concerned 
stakeholders, including companies in the high-tech industry, members of 
Congress, and U.S. educational institutions, about the adverse impact 
on the U.S. economy and the ability of U.S. schools to attract talented 
foreign students for STEM study programs due to the immigration and 
employment practices in the United States. Representatives of high-tech 
industries in particular have raised significant concerns that the 
inability of U.S. companies to obtain H-1B visas for qualified F-1 
students in a timely manner continues to result in the loss of skilled 
technical workers to countries with more lenient employment visa 
regimes, such as Canada and Australia. See Testimony of Bill Gates, 
Chairman, Microsoft Corporation, before the U.S. Senate Committee on 
Health, Education, Labor & Pensions, ``Strengthening American 
Competitiveness for the 21st Century'' (Washington, D.C.; March 7, 
2007).\5\
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    \5\ A copy of this testimony can be accessed at https://
help.senate.gov/hearings/2007_03_07/Gates.pdf.
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    Notably, the European Union recently proposed a ``Blue Card'' 
program, similar to the U.S. H-1B visa program, under which skilled 
workers would be able to obtain a temporary work visa for employment in 
the European Union. Unlike the H-1B program, the European Union's Blue 
Card program proposal would not have a cap. The European Union 
estimates that workers would usually be able to obtain their visas in 
90 days or less. If the Blue Card proposal is adopted, U.S. employers 
could be at a competitive disadvantage to employers in the European 
Union when recruiting foreign national candidates. U.S. high-tech 
employers are particularly concerned about the H-1B cap because of the 
critical shortage of domestic science and engineering talent and the 
degree to which high-tech employers are as a consequence necessarily 
far more dependent on foreign workers than other industries. See The 
National Science Foundation, Rising Above the Gathering Storm: 
Energizing and Employing America for a Brighter Economic Future (2007), 
pp. 78-83 (describing the critical shortages of science, math, and 
engineering talent in the United States) .\6\
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    \6\ This publication may be found at https://www.nap.edu/
catalog.php?record_id=11463.
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    Many F-1 students who graduated last spring will soon be concluding 
their 12-month periods of OPT. Unless employers for those students are 
able to obtain H-1B visas when the filing period commences on April 1, 
2008 for FY09 (October 1, 2008), many of these students will need to 
leave the United States when their current post-completion OPT period 
concludes.
    This interim final rule addresses the immediate competitive 
disadvantage faced by U.S. high-tech industries, and thus may quickly 
ameliorate some of the adverse impacts on the U.S. economy. It does 
this by allowing an F-1 student already in a period of approved post-
completion OPT to apply to extend that period by up to 17 months (for a 
maximum total period of 29 months of OPT) if the student received a 
STEM degree. As discussed in Section II below, this extension is only 
available to F-1 students with STEM degrees who have accepted 
employment with an employer registered and in good standing with USCIS' 
E-Verify employment verification program. In addition, employers of F-1 
students who qualify for this 17-month extension of post-completion OPT 
must report to the student's school DSO within 48 hours if the 
student's employment ends prior to the end of the student's authorized 
OPT employment period.

B. ``Cap-Gap'' and Need To Expand Relief to All F-1 Students With 
Pending H-1B Petitions

    As discussed above, nonimmigrant F-1 students on post-completion 
OPT maintain valid F-1 status until the expiration of the OPT period 
and the subsequent 60-day departure preparation period. Employers of 
students already working for the employer under OPT often file 
petitions to change the students' status to H-1B so that these 
nonimmigrant aliens may continue working in their current or a similar 
job. Many times, however, an F-1 student's OPT authorization will 
expire prior to the student being able to assume the employment 
specified in the approved H-1B petition.
    Currently, an employer may not file, and USCIS may not approve, an 
H-1B petition submitted earlier than six months before the date of 
actual need for the beneficiary's services or training. 8 CFR 
214.2(h)(9)(i)(B). As a result, the earliest date that an employer can 
file an H-1B petition for consideration under the next fiscal year cap 
is April 1, for an October 1 employment start date. If that H-1B 
petition and the accompanying change of status request are approved, 
the earliest date that the student may start H-1B employment is October 
1. Consequently, F-1 students who are the beneficiaries of approved H-
1B petitions, but whose period of authorized stay (including authorized 
periods of post-completion OPT and the subsequent 60-day departure 
preparation period) expires before the October 1 H-1B employment start 
date, would have a gap in authorized stay and employment. This 
situation is commonly referred to as the ``cap-gap.''
    An F-1 student in a cap-gap situation would have to leave the 
United States and return at the time his or her H-1B status becomes 
effective at the beginning of the next fiscal year. This gap creates a 
hardship to a number of students and provides a disincentive to 
remaining in the United States for employment. The cap-gap therefore 
creates a recruiting obstacle for U.S. employers interested in 
obtaining F-1 students for employment and submitting H-1B petitions on 
their behalf. Moreover, when the student is already working for a U.S. 
company on OPT and has to leave the United States, frequently for 
several months, during the cap-gap period, the employer suffers a major 
disruption.
    USCIS is already authorized to extend the status of F-1 students 
caught in a cap-gap between graduation and the start date on his or her 
approved H-1B petition. 8 CFR 214.2(f)(5)(vi). However, before USCIS 
can offer students any relief from the cap-gap, it must first determine 
that the cap has been reached for the current fiscal year, or is likely 
to be reached prior to the end of the current fiscal year, and then 
publish a notice in the Federal Register announcing that status is 
extended for students with pending H-1B petitions. Significantly, the 
existing regulations do not take into account the fact that the H-1B 
category is now oversubscribed to such a degree that USCIS' final 
receipt date for petitions is now announced even before the start of 
the fiscal year for which the petitions are being submitted and, in the 
absence of an expansion of the 65,000 cap by Congress, this state of 
affairs will likely continue indefinitely. The existing regulations, 
therefore, are not an effective means of addressing the cap-gap problem 
suffered by student beneficiaries of pending H-1B petitions (and their 
employers).
    This interim rule amends USCIS procedures by eliminating the 
requirement that USCIS issue a Federal Register notice. Instead, this 
rule extends the authorized period of stay, as well as work 
authorization, of any F-1 student who is the beneficiary of a timely-
filed H-1B petition that has been granted by, or remains pending with, 
USCIS. The extension of status and work authorization terminates on 
October 1 of the fiscal year for which the H-1B visa has been 
requested. This amendment better reflects the reality of the current 
situation, where demand for

[[Page 18948]]

H-1B visas is so high that USCIS regularly receives enough petitions to 
reach the cap before the beginning of the fiscal year for which 
petitions are filed, and offer more substantial cap gap relief to both 
students and employers.

II. Discussion of This Interim Final Rule

A. 17-Month Extension of Optional Practical Training for F-1 Students 
Who Have Obtained a STEM Degree

    This interim rule will allow F-1 students who have received a 
degree in a STEM field to obtain an extension of their existing post-
completion OPT period for up to 17 months, for a maximum period of 
post-completion OPT of 29 months. The extension, however, is only 
available to students who are employed, or will be employed, by an 
employer enrolled (and determined by USCIS to be in good standing) in 
USCIS' E-Verify employment verification program at the time the student 
applies for the 17-month extension. A student seeking an extension must 
agree to report to a DSO at his or her school the following: Changes to 
the student's name, the student's residential and mailing address, the 
student's employer, and the address of the student's employer. The 
student must also report to a DSO every six months from the date the 
OPT extension starts to verify this information. In addition, the 
employer of a student under extended OPT must report to the student's 
school DSO within 48 hours after the student leaves employment with 
that employer. The DSO must report all of this information in SEVIS.
1. Requirements for Students Seeking a 17-Month OPT Extension
    This interim final rule will allow qualified F-1 students who 
currently have approved post-completion OPT to apply for a 17-month 
extension of OPT. The student's degree, as shown is SEVIS, must be a 
bachelor's, master's, or doctorate degree with a degree code that is on 
the current STEM Designated Degree Program List.
    The STEM Designated Degree Program List is based on the 
``Classification of Instructional Programs'' (CIP) developed by the 
U.S. Department of Education's National Center for Education Statistics 
(NCES). See Classification of Instructional Programs--2000: (NCES 2002-
165) U.S. Department of Education, National Center for Education 
Statistics. Washington, DC: U.S. Government Printing Office.\7\ To be 
eligible for the 17-month OPT extension, a student must have received a 
degree in the following:
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    \7\ This publication may be found at https://nces.ed.gov/
pubs2002/2002165_2.pdf.

     Actuarial Science. NCES CIP Code 52.1304
     Computer Science: NCES CIP Codes 11.xxxx (except Data 
Entry/Microcomputer Applications, NCES CIP Codes 11.06xx)
     Engineering: NCES CIP Codes 14.xxxx
     Engineering Technologies: NCES CIP Codes 15.xxxx
     Biological and Biomedical Sciences: NCES CIP Codes 26.xxxx
     Mathematics and Statistics: NCES CIP Codes 27.xxxx
     Military Technologies: NCES CIP Codes 29.xxxx
     Physical Sciences: NCES CIP Codes 40.xxxx
     Science Technologies: NCES CIP Codes 41.xxxx
     Medical Scientist (MS, PhD): NCES CIP Code 51.1401

The approved list is available on SEVP's Web site at https://
www.ice.gov/sevis. DHS welcomes comment on the list and any 
recommendations for additional degrees that the Department should 
consider for inclusion in the list. DHS will continue to work with 
interested parties to evaluate the degrees that may be added to this 
list in the future, and will be reaching out to other agencies in the 
development of the final rule. The Department, however, must also 
continue to ensure that the extension remains limited to students with 
degrees in major areas of study falling within a technical field where 
there is a shortage of qualified, highly-skilled U.S. workers and that 
is essential to this country's technological innovative 
competitiveness.
    DHS will announce any future changes to the list on this Web site. 
Note that catch-all NCES CIP codes ending in ``99'' are not considered 
STEM designated degrees.
    Students who wish to extend OPT must request that their DSO 
recommend the 17-month OPT extension. DSOs recommending the extension 
must verify the student's eligibility, certify that the student's 
degree is on the STEM Designated Degree Program List, and ensure that 
the student is aware of his or her responsibilities for maintaining 
status while on OPT. The DSO must make the recommendation to extend OPT 
for the student through SEVP's Student and Exchange Visitor Information 
System (SEVIS), a Web-enabled database for the collection of 
information related to F, M and J nonimmigrants, certified schools, and 
State Department approved exchange visitor programs. SEVP will 
implement an interim update to SEVIS to ensure schools can recommend 
extending the authorized OPT period for 17 months for qualified 
students. The changes will be minimal due to the short time for 
planning and the reduced testing cycle. SEVP is also planning a major 
SEVIS release in the first part of FY 2009 to more fully support the 
new regulatory requirements. SEVP will publish interim instructions for 
the period between the interim update and the major release and provide 
training opportunities for DSOs. SEVIS help desk personnel will provide 
assistance with the proper interim procedures.
    Once the DSO recommends a student for the extension, the student 
must submit a Form I-765 and appropriate fees (as indicated in the form 
instructions) to USCIS. Instructions for filing the Form I-765 can be 
found at USCIS' Web site at https://www.uscis.gov.
    This interim final rule also extends EADs for students with pending 
requests for extension of post-completion OPT. An F-1 student who has 
properly filed Form I-765 prior to the end date of his or her post 
completion OPT is allowed to maintain continuous employment for up to 
180 days while USCIS adjudicates the request for the extension.
    To implement the changes discussed in this rulemaking, USCIS is 
making conforming amendments to Form I-765 to ensure that that the F-1 
students seeking a 17-month extension of their post-completion OPT are, 
in fact, eligible to do so. USCIS is amending this form to add, among 
other things, a new question 17 asking students to identify 
the degree they have received, so that USCIS may determine that the 
student has received a degree in a STEM field. The new Form I-765 also 
will ask the student seeking the extension to provide the name of their 
employer (as listed in E-Verify), and their employer's E-Verify Company 
I.D. number or, if the employer is using a Designated Agent to perform 
the E-Verify queries, a valid E-Verify Client Company I.D. number
2. Requirement for Employers of Students With a 17-Month OPT Extension
a. USCIS E-Verify Employment Verification Program
    As discussed above, only students who are employed by employers who 
have enrolled, and are determined by USCIS to be in good standing, in 
USCIS'

[[Page 18949]]

E-Verify program will be eligible for the 17-month extension of post-
completion OPT. The E-Verify program is an Internet-based system 
operated by USCIS, in partnership with the Social Security 
Administration (SSA). E-Verify is currently free to employers and is 
available in all 50 states, the District of Columbia, Puerto Rico, 
Guam, and the U.S. Virgin Islands. E-Verify electronically compares 
information contained on the Employment Eligibility Verification Form 
I-9 (herein Form I-9) with records contained in SSA and DHS databases 
to help employers verify identity and employment eligibility of newly-
hired employees. This program currently is the best means available for 
employers to determine employment eligibility of new hires and the 
validity of their Social Security Numbers.
    Before an employer can participate in the E-Verify program, the 
employer must enter into a Memorandum of Understanding (MOU) with DHS 
and SSA. This memorandum requires employers to agree to abide by 
current legal hiring procedures and to ensure that no employee will be 
unfairly discriminated against as a result of the E-Verify program. 
Violation of the terms of this agreement by the employer is grounds for 
immediate termination of its participation in the program.
    Employers participating in E-Verify must still complete a Form I-9 
for each newly hired employee, as required under current law. Following 
completion of the Form I-9, the employer must enter the newly hired 
worker's information into the E-Verify Web site, and that information 
is then checked against information contained in SSA and USCIS 
databases. E-Verify compares employee information against more than 425 
million records in the SSA database and more than 60 million records 
stored in the DHS database. Currently, 93 percent of all employer 
queries are instantly verified as work authorized.
    It is important to note that, once an employer enrolls in E-Verify, 
that employer is responsible for verifying all new hires, including 
newly hired OPT students with 17-month OPT extensions, at the hiring 
site(s) identified in the MOU executed by the employer and DHS. New 
hires must be verified to be authorized to work in the United States 
through E-Verify within three days of hire. If, however, an employer 
enrolls in E-Verify to retain the employment of an OPT student, the 
employer may not verify the employment eligibility of the OPT employee 
in E-Verify as the MOU prohibits the verification of existing 
employees. Additional information on enrollment and responsibilities 
under E-Verify can be found at https://www.uscis.gov/E-Verify.
    Employers can register for E-Verify on-line at https://
www.uscis.gov/E-Verify. The site provides instructions for completing 
the MOU needed to officially register for the program.
b. Employer Reporting Requirement
    SEVP's ability to track nonimmigrant students in the United States 
relies on reporting by the students' DSOs. DSOs obtain the needed 
information from the school's recordkeeping systems and contact with 
the students. Students on OPT, however, are often away from the 
academic environment, making it difficult for DSOs to ensure proper and 
prompt reporting on student status to SEVP. While DHS regulations 
currently require DSOs to update SEVIS, the current reporting 
requirements depend entirely on the student's timely compliance. DSOs 
are not currently required to review and verify information reported by 
students on a recurring basis. This combination of factors hinders 
systematic reporting and SEVP's ability to track F-1 students during 
OPT.
    Accordingly, DHS will only extend post-completion OPT for students 
employed by employers that agree to report when an F-1 student on 
extended OPT terminates or otherwise leaves his or her employment with 
the employer prior to end of the authorized period of OPT. The employer 
must report this information to the DSO of the student's school no 
later than 48 hours after the student leaves employment. Employers must 
report this information to the DSO at the student's school unless DHS 
announces another means to report such information through a Federal 
Register notice. The contact information for the DSO is on the 
student's Form I-20. DHS welcomes comments on possible means for 
directly reporting to DHS, such as through electronic means similar to 
or associated with the E-Verify platform.

B. Expansion of Cap-Gap Relief for All F-1 Students With Pending H-1B 
Petitions

    Currently, F-1 students who are the beneficiaries of approved H-1B 
petitions, but whose period of admission (including authorized periods 
of post-completion OPT and the subsequent 60-day departure preparation 
period) expires before the H-1B employment start date, have a gap in 
authorized stay and employment between the end of their F-1 status and 
the beginning of their H-1B employment. This situation is commonly 
referred to as the ``cap-gap.''
    USCIS is authorized to extend the status of F-1 students caught in 
a cap gap between the end of the student's F-1 status and the start 
date on his or her approved H-1B petition.\8\ 8 CFR 214.2(f)(5)(vi). 
The current regulations, however, do not provide for a commensurate 
extension of students' employment authorization to cover the gap 
period. Additionally, the regulations currently provide that USCIS must 
determine that the H-1B cap will be met prior to the end of the 
``current'' fiscal year before it may authorize an extension of stay 
for students subject to the cap gap for that fiscal year by means of a 
notice published in the Federal Register.
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    \8\ The current regulations also require that the 
``Commissioner'' issue the notice in the Federal Register. This is a 
technical error because this regulation has not been updated since 
the responsibilities of the Commissioner of the former INS were 
transferred to the Department of Homeland Security in March 2003 
under the Homeland Security Act of 2002. Because DHS is removing 
this provision altogether, there is no need to make the technical 
correction from ``Commissioner'' to ``Director [of USCIS]'' at this 
time.
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    This interim rule expands the relief offered by the existing cap 
gap provision by first eliminating the limitation that cap gap relief 
be authorized only when the H-1B cap is likely to be reached prior to 
the end of the current fiscal year. This interim rule also removes the 
requirement that USCIS issue a notice in the Federal Register to 
announce the extension of status and instead allows an automatic 
extension of status and employment authorization for F-1 students with 
pending H-1B petitions. If USCIS denies a pending H-1B petition, the 
student will have the standard 60-day period (from notification of the 
denial or rejection of the petition) before they have to leave the 
United States.
    Unlike the extension of post-completion OPT, which is limited to F-
1 students who have obtained STEM degrees, the extension of status for 
F-1 students in a cap-gap applies to all F-1 students with pending H-1B 
petitions during a fiscal year.

C. Related Changes to the OPT Requirements

1. Changes to Post-Completion OPT
    Currently, students must apply for post-completion OPT prior to 
completing their course requirements. 8 CFR 214.2(f)(10)(ii)(A). This 
is inconsistent with other regulatory provisions allowing students to 
transfer, apply for a new degree program, or change to another 
nonimmigrant status

[[Page 18950]]

during their 60-day post-completion departure preparation period. 
Problems also arise if students fail to complete their program after 
receiving authorization for post-completion OPT. Therefore, this rule 
allows students to apply for post-completion OPT during the 60-day 
departure preparation period.
2. Periods of Unemployment During OPT
    DHS regulations currently define the period of an F-1 student's 
status as the time the student is pursuing a full course of study at an 
SEVP-certified school or engaging in authorized post-completion OPT. 8 
CFR 214.2(f)(5). They do not specify how much time the student may be 
unemployed, making it difficult to determine when an unemployed student 
on post-completion OPT violates the requirements for remaining in F-1 
status. As status during OPT is based on the premise that the F-1 
student is working, there must be a limit on unemployment, just as the 
F-1 student's period in school is based on the premise that he is 
actually pursuing a full-time course of study, and there are limits on 
how often the student can reduce his course load. An F-1 student who 
drops out of school or does not pursue a full-time course of study 
loses status; an F-1 student with OPT who is unemployed for a 
significant period should similarly put his status in jeopardy. 
Therefore, this rule specifies an aggregate maximum allowed period of 
unemployment of 90 days for students on 12-month OPT. This maximum 
period increases by 30 days for F-1 students who have an approved 17-
month OPT period. In addition to clarifying the student's status, this 
measure allows time for job searches or a break when switching 
employers.

III. Regulatory Requirements

A. Administrative Procedure Act

    To avoid a loss of skilled students through the next round of H-1B 
filings in April 2008, DHS is implementing this initiative as an 
interim final rule without first providing notice and the opportunity 
for public comment under the ``good cause'' exception found under the 
Administrative Procedure Act (APA) at 5 U.S.C. 553(b). The APA provides 
that an agency may dispense with notice and comment rulemaking 
procedures when an agency, for ``good cause,'' finds that those 
procedures are ``impracticable, unnecessary, or contrary to the public 
interest.'' See 5 U.S.C. 553(b)(B). The exception excuses notice and 
comment, however, in emergency situations, or where ``the delay created 
by the notice and comment requirements would result in serious damage 
to important interests.'' Woods Psychiatric Institute v. United States, 
20 Cl. Ct. 324, 333 (1990), aff'd 925 F.2d 1454 (Fed. Cir. 1991); see 
also National Fed'n of Fed. Employees v. National Treasury Employees 
Union, 671 F.2d 607, 611 (D.C. Cir. 1982).
    Currently, DHS estimates, through data collected by SEVP's Student 
and Visitor Exchange Information System (SEVIS), that there are 
approximately 70,000 F-1 students on OPT in the United States. About 
one-third have earned a degree in a STEM field. Many of these students 
currently are in the United States under a valid post-completion OPT 
period that was granted immediately prior to the conclusion of their 
studies last year. Those students soon will be concluding the end of 
their post-completion OPT and will need to leave the United States 
unless they are able to obtain an H-1B visa for FY09 or otherwise 
maintain their lawful nonimmigrant status. DHS estimates that there are 
30,205 F-1 students with OPT expiring between April 1 and July 31 of 
this year. The 17-month extension could more than double the total 
period of post-completion OPT for F-1 students in STEM fields. Even if 
only a portion of these students choose to apply for the extension, 
this extension has the potential to add tens of thousands of OPT 
workers to the total population of OPT workers in STEM occupations in 
the U.S. economy.
    This interim rule also provides a permanent solution to the ``cap-
gap'' issue by an automatic extension of the duration of status and 
employment authorization to the beginning of the next fiscal year for 
F-1 students who have an approved or pending H-1B petition. This 
provision allows U.S. employers and affected students to avoid the gap 
in continuous employment and the resulting possible violation of 
status. This increases the ability of U.S. employers to compete for 
highly qualified employees and makes the United States more competitive 
in attracting foreign students. Based on the historical numbers of 
``cap-gap'' students taking advantage of a Federal Register Notice 
extending F-1 status, ICE estimates that up to 10,000 students will 
have approved H-1B petitions with FY09 start dates. At the end of their 
OPT, these students must terminate employment and either depart the 
United States within 60 days or extend their F-1 status by enrolling in 
another course of study. Unless this rule, and the cap gap relief it 
affords, is implemented this Spring, all these students must interrupt 
their employment and those who leave the United States will not be 
allowed to return until the October 1, 2008 start date on their H-1B 
petitions.
    The ability of U.S. high-tech employers to retain skilled technical 
workers, rather than losing such workers to foreign business, is an 
important economic interest for the United States. This interest would 
be seriously damaged if the extension of the maximum OPT period to 
twenty-nine months for F-1 students who have received a degree in 
science, technology, engineering, or mathematics is not implemented 
early this spring, before F-1 students complete their studies and, 
without this rule in place and effective, would be required to leave 
the United States.
    Accordingly, DHS finds that good cause exists under 5 U.S.C. 553(b) 
to issue this rule as an interim final rule. DHS nevertheless invites 
written comments on this interim rule. Further, because this interim 
final rule relieves a restriction by extending the maximum current 
post-completion OPT period for certain students from 12 months to up to 
29 months, DHS finds that this rule shall become effective immediately 
upon publication of this interim final rule in the Federal Register. 5 
U.S.C. 553(d).

B. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) (5 U.S.C. 605(b)), as amended 
by the Small Business Regulatory Enforcement and Fairness Act of 1996 
(SBRFA), requires an agency to prepare and make available to the public 
a regulatory flexibility analysis that describes the effect of the rule 
on small entities (i.e., small businesses, small organizations, and 
small governmental jurisdictions). RFA analysis is not required when a 
rule is exempt from notice and comment rulemaking under 5 U.S.C. 
553(b). DHS has determined that this rule is exempt from notice and 
comment rulemaking pursuant to 5 U.S.C. 553(b)(B). An RFA analysis, 
therefore, is not required for this rule.

C. Small Business Regulatory Enforcement Fairness Act of 1996

    This is not a major rule, as defined by Section 804 of the Small 
Business Regulatory Enforcement Act of 1996. This rule will not result 
in an annual effect on the United States economy of $100 million or 
more; a major increase in costs or prices; or significant adverse 
effects on competition, employment, investment, productivity, 
innovation, or the ability of United States-based companies to compete 
with foreign-

[[Page 18951]]

based companies in domestic and export markets.

D. Executive Order 12866

    This proposed rule has been designated as a ``significant 
regulatory action'' under Executive Order 12866. This rule therefore 
has been submitted to OMB for review. In addition, under section 
6(a)(3)(C) of the Executive Order, DHS has prepared an assessment of 
the benefits and costs anticipated to occur as a result of this 
regulatory action and provided the assessment to OMB for review. This 
assessment is as follows:
    Recent numbers: This rule will have an impact on a small percentage 
of international students in the United States. According to the DHS 
Office of Immigration Statistics, an average of approximately 642,000 
F-1 academic students, at all grade levels, have entered the United 
States per year in fiscal years 2004, 2005, and 2006.\9\ According to 
the Institute of International Education, approximately 583,000 of 
these students are college students.\10\ Of those, SEVP records 
indicate that close to 70,000 students currently participate in OPT 
and, of those, only about 23,000 are OPT participants who are studying 
in designated STEM fields. Thus, about 3.6 percent of F-1 students 
could potentially benefit from this rule. Nonetheless, as shown below, 
this may be a sufficient number to significantly benefit employers who 
are in need of workers in STEM-related fields.
---------------------------------------------------------------------------

    \9\ DHS Office of Immigration Statistics, Temporary Admissions 
of Nonimmigrants to the United States: 2006, ``Nonimmigrant 
Admissions (I-94 Only) by Class of Admission: Fiscal Years 2004 to 
2006.'' Available on line at https://www.dhs.gov/xlibrary/assets/
statistics/publications/NI_FR_2006_508_final.pdf.
    \10\ The Institute of International Education, ``International 
Student and Total U.S. Enrollment'' Available on line at: https://
opendoors.iienetwork.org/?p=113122.
---------------------------------------------------------------------------

    OPT extension volume estimate: A reasonable estimate of the number 
of students who will participate in this new OPT 17-month extension 
program is difficult for a number of reasons, but DHS estimates that 
about 12,000 students will apply for an OPT extension after this rule 
takes effect. Of the 23,000 OPT students, however, about 4,000 have 
bachelor's degrees, 13,000 have master's degrees, and 6,000 have a 
doctorate. Anecdotal evidence indicates that foreign students with a 
master's or bachelor's degrees often continue as students and pursue 
more advanced degrees. DHS experience indicates that many of these 
students will be granted H-1B status and will not need an OPT 
extension, although actual records do not exist on the rates at which 
F-1 OPT participants actually receive an H-1B position. Additionally, 
some students will not request an OPT extension because they are 
returning to their home country, while many students will want to stay. 
According to a report from the Oak Ridge Institute for Science and 
Education, 65 percent of 2000 U.S. science and engineering doctoral 
degree recipients with temporary visas were still in the United States 
in 2005, up from a 61 percent 5-year stay rate found in 2003.\11\ This 
implies that STEM students stay in the U.S. at a relatively high rate. 
And, finally, the changes made by this rule are expected to increase 
the attractiveness of the OPT program. Although a precise estimate of 
the effect is impossible, the OPT application volume is likely to 
increase at least a slight amount because of the impact of this rule on 
program flexibility, length of stay, and students' quality of life. 
Therefore, after considering these factors, DHS estimates that about 
12,000 of the 23,000 students who could apply for the OPT extension 
allowed by this rule, will apply in an average year after this rule 
takes effect.
---------------------------------------------------------------------------

    \11\ Finn, Michael, ``Stay Rates of Foreign Doctorate Recipients 
from U.S. Universities: 2005,'' Oak Ridge Institute for Science and 
Education (2007).
---------------------------------------------------------------------------

Public Costs
    Fees. The fee for Form I-765 is $340. 8 CFR 103.7(b)(1). Thus, the 
new filing fees to be collected by USCIS from students requesting an 
employment authorization document as a result of this rule will be 
about $4.1 million.\12\
---------------------------------------------------------------------------

    \12\ $340 x 12,000 = $4,080,000.
---------------------------------------------------------------------------

    Paperwork burden. The public reporting burden for completion of the 
Form I-765 information is estimated at 3 hours and 25 minutes per 
response, including the time for reviewing instructions, completing and 
submitting the form. As discussed below in the Paperwork Reduction Act 
section of this rule, this form is being amended to add a space for 
STEM students to provide their degree, the name of their employer, and 
their employer's E-Verify Company I.D. number or, if the employer is 
using a Designated Agent to perform the E-Verify queries, a valid E-
Verify Company Client Company I.D. Number. Therefore, the 12,000 
students requesting OPT will expend approximately 3.42 hours per 
application for a total of 41,040 burden hours per year.\13\ Based on 
the private industry employer average compensation costs of $28.03 per 
hour worked,\14\ this requirement will result in an estimated total 
cost of $1.15 million.\15\
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    \13\ 3.42 hours (25 minutes = .42 hours) x 12,000.
    \14\ Employer Costs for Employee Compensation, All civilian 
occupations, 3rd Quarter 2007, U.S. Department of Labor, Bureau of 
Labor Statistics at https://data.bls.gov/cgi-bin/surveymost. No 
consideration is given to possibly lower wage rates being applicable 
for students.
    \15\ 3.42 hours x 12,000 applications = 41,040. 41,040 x 28.03 = 
$1,150,351 (rounded).
---------------------------------------------------------------------------

    New burden. This rule adds to the current regulation's DSO and 
student reporting requirements. A student with a 17-month extension to 
post-completion OPT must also make a validation report to the DSO every 
six months starting from the date of the extension, within 10 business 
days, and ending when the student's F-1 status ends, if the student 
changes educational levels at the same school or the student transfers 
to another school or program. The validation is a confirmation that the 
student's information in SEVIS is current and accurate. The DSO is 
responsible for updating the student's record with SEVIS within 21 
days. The DSO must also report in SEVIS when the employer of a student 
with the 17-month OPT extension reports that the student no longer 
works for that employer.
    Also, this rule makes failure to report a basis for terminating the 
student's status and provides that failure to report can impact the 
future visa program and OPT eligibility of the school, employer, and 
student. Further, the school is required by this rule to report to 
SEVIS whether there have been any changes in the student's 
circumstances or not. Although the student is already required to 
report to the school DSO any changes in their address and their OPT 
employer's name and address, and the school is then required to report 
this information to SEVIS, program familiarity and anecdotal evidence 
indicates that full compliance is lacking. The increased incentives to 
comply with the reporting requirements provided in this rule will 
result in about 2.5 additional reports per student per extension period 
from students to schools and schools to SEVIS. Each report or update 
will require an estimated 10 minutes. Thus, for the 12,000 students and 
graduates expected to benefit from this rule, an additional reporting 
burden of 5,000 hours (12,000 x .42 hours) is estimated to occur for 
both the student and school for a total of 5,000 additional hours of 
burden. Based on the private industry employer average compensation 
costs of $28.03 per hour worked,\16\ this requirement

[[Page 18952]]

will result in an estimated total cost of $140,150 (5,000 hours x 
$28.03).
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    \16\ Employer Costs for Employee Compensation, All civilian 
occupations, 3rd Quarter 2007, U.S. Department of Labor, Bureau of 
Labor Statistics at https://data.bls.gov/cgi-bin/surveymost. No 
consideration is given to possibly lower wage rates being applicable 
for students.
---------------------------------------------------------------------------

    DHS has determined that the currently approved information 
collection burden for SEVIS contains a high enough estimate of that 
program's paperwork burden on program participants to encompass this 
rule's requirements because reporting requirements were already 
imposed, although not with the utmost clarity. Also, current 
regulations do not impose any penalty on a school or student for 
failure to report. SEVP will work with schools on the best way to 
implement this new reporting requirement so as to maximize its benefit 
while minimizing its burden on participating students and schools. SEVP 
is making conforming amendments to its approved information collection 
for SEVIS and has included the updated burden estimates. Public 
comments are especially welcome on these changes.
    E-Verify Registration. This rule requires employers of F-1 students 
participating in the 17-month OPT extension to enroll in E-Verify. That 
will require the employer to register for E-Verify if they wish to hire 
an employee under the extended OPT. Less than 1 percent of the total 
number of employers in the United States are currently enrolled in E-
Verify and a similar percentage of enrollment in E-Verify would be 
expected for OPT employers. Thus, DHS anticipates that most employers 
who would want to employ these students under the 17-month extension 
would need to register for E-Verify.\17\
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    \17\ No allowance is made for the few employers that would 
choose to no longer hire students under OPT because of this 
requirement.
---------------------------------------------------------------------------

    The time and cost associated with registering for E-Verify largely 
depends on the access method a company chooses. The vast majority of 
companies will sign up for employer access which requires approximately 
3 to 4 hours for a person to register online, read and review the 
Memorandum of Understanding, and take the tutorial. A recent cost 
analysis for the E-Verify program looked at the associated costs for an 
organization to undertake the above tasks based on an average salary 
and the time required. According to this analysis, a company would 
spend an average of $170 per registration for the Employer Access 
method. This cost could increase if an employer chose to use a 
Designated Agent or Web Services as their access method. The Designated 
Agent costs can vary greatly and would be difficult to estimate as many 
employers contract with a Designated Agent to perform a variety of 
human resources related tasks. Web Services would also likely involve a 
significant cost and time to the employer as they would need to design 
their own software to interface with the E-Verify system.
    DHS has no record of the numbers or identity of employers hiring 
students under OPT, no figures on those that hire students and also 
participate in E-Verify, no data on the average number of employees in 
such firms, and no data on the average number of employees hired by 
such firms for which the immigration status will have to be verified. 
However, since this rule is applicable only to STEM students and recent 
graduates, it is estimated that the employers and positions will be 
similar in characteristics to those hiring employees in the H-1B 
specialty worker program. In that program, USCIS records show that in 
FY 2007, about 29,000 different employers employed at least one of the 
65,000 initial H-1B employees (based on employer identification number) 
with about 20,000 employing only one H-1B employee. Thus, employers 
hiring new H-1B employees in FY 2007 hired an average of 2.24 each. If 
the 12,000 students per year that DHS is estimating will receive an OPT 
extension are distributed along those same lines, as is expected, they 
will work for approximately 5,357 employers (12,000/2.24). Since about 
1.0 percent of employers are already enrolled in E-Verify already, 
5,300 employers are estimated to have to enroll in E-Verify as a result 
of this rule. At $170 per registration for the Employer Access method, 
the total initial enrollment costs from this rule would be 
$901,000.\18\
---------------------------------------------------------------------------

    \18\ It is assumed for this analysis that there would be no 
initial costs for acquiring computers or Internet connections for 
employers that would hire an OPT student or graduate with an STEM 
major study area.
---------------------------------------------------------------------------

    At the end of registration, the company is required to read and 
sign a Memorandum of Understanding (MOU) that provides the terms of 
agreement between the employer, SSA, and USCIS. It is expected that 
each company will have a Human Resources manager review the MOU and 
that many companies will also have a lawyer and or a general manager 
review the MOU. Using the Bureau of Labor Statistics (BLS) estimates 
for the average hourly labor rate, plus a multiplier of 1.4 to account 
for fringe benefits, DHS calculated a labor rate of $48.33 for an HR 
manager, $60.93 per hour for a general manager, and $76.09 for legal 
counsel.\19\ Based on the amount of time that company employees are 
expected to spend reviewing and approving the MOU, DHS estimates this 
rule will cost the 5,300 establishments that must enroll in E-Verify in 
order to hire OPT students about $64 each or a total of $339,200 to 
review, approve, and sign the MOU.
---------------------------------------------------------------------------

    \19\ The 1.4 multiplier used here to adjust base compensation 
levels to account for private industry compensation costs was taken 
from the BLS publication ``Employer Costs for Employee 
Compensation--March 2007.''
---------------------------------------------------------------------------

    New hire verification. This rule will require the affected 
employ