On March 11, 2016, the Department of Homeland Security issued a long-anticipated final rule allowing certain foreign students with science, technology, engineering and math (STEM) degrees earned in the U.S. to extend their optional practical training (OPT) period by two years (up from 17 months under the prior regulation), in addition to the one-year OPT available for graduates in all fields. The new rule will become effective on May 10, 2016.

The result of this new rule is that STEM graduates will effectively have three years of STEM OPT work authorization per U.S. degree level, allowing students to stay in the United States after graduation to receive practical training relating to their fields of studies and offering employers more time to test the foreign workers educated in the U.S. prior to deciding whether to pursue temporary or permanent employment sponsorship. The new rule allows STEM graduates and employers more flexibility and makes the U.S. an even more attractive destination for potential STEM international students.

As a practical matter, STEM students whose 17-month STEM OPT extension will expire on May 10, 2016, or later will be able to extend their OPT for another seven months. Also, the revisions to the STEM OPT rule in combination with the existing H-1B cap-gap rules will allow STEM students graduating in May three "bites" at the annual H-1B lottery "apple," which is the main but tremendously oversubscribed nonimmigrant category available to U.S. employers to sponsor professional foreign workers. With the possibility of three years of work authorization, some employers may make it through the permanent residency sponsorship process with their STEM graduates who are from countries with currently available visa numbers, without the need to rely on H-1B work authorization.

Consistent with the former rule, STEM OPT extensions are only available for students employed by employers participating in E-Verify. The new rule adds increased oversight of the STEM OPT program, including: (i) individualized training plans developed by the employer and the student; (ii) regular student reporting to the university's designated school official; (iii) employer attestation that the student will not replace U.S. workers; (iv) requirement that STEM OPT students are offered the same terms and conditions (including compensation) as similarly situated U.S. workers; and (v) limitation of the extension to students with degrees from accredited schools.