Sindell Law Offices E-Min Newsletter (Vol. 4) - English Article #16

    What to do when students have a gap between Optional Practical Training and the new H-1b quota in October.


On February 17, 2004, the H-1B annual quota or "cap" was reached for fiscal year 2004 (October 1, 2003 to September 30, 2004)


Employers of foreign nationals in F-1 and J-1 status are all wondering how to deal with their current or prospective employees this summer when their Employment Authorization Documents ("EADs") or status expires before an H1B petition can be approved with an effective date of October 1st.


Employer seeking to those workers currently on Optional Practical Training (OPT) could, as of April 1, 2004, file H-1B petitions with an October 1, 2004 start date to be counted toward fiscal year 2005. We have not had any definitive announcements on how the immigration service will handle F and J students whose status will expire prior to October 1, 2004.


Unlike past cap years, the CIS has yet to make any official pronouncements on this issue. In the past, INS has allowed changes of status even if there is a gap in status. We are seeing approvals now that indicate the CIS will not be taking the same position as legacy INS and will not change an F-1 visa holder’s status to the H-1b category unless that person has status until October 1, 2004. Students and scholars currently in F or J status joining private industry may be faced with falling out of status or having to wait for their H-1B approvals abroad.


H-1B beneficiaries subject to the cap whose F-1 (I-20) or J-1 (DS2019) status will expire prior to October 1st, but whose 60/30-day grace periods extend beyond October 1, 2004 will be eligible to change status. However, if an F-1's OPT expires in August, he/she will not be authorized to engage in employment during the 60-day grace period until the H-1B effective date.


We have suggested that during the grace period that it would be acceptable to provide services to the employer as an "unpaid intern" and receive no compensation. However, a narrower view is that in many states even unpaid interns receive compensation from the employer in the form of, for example, workers' compensation insurance coverage. This compensation in exchange for services rendered amounts to unauthorized employment if there is no other source of employment authorization such as practical training.


There is another argument that is undergoing training at the employer's worksite during the sixty/thirty day grace period for F1 and J1s would not be considered unauthorized employment, even if compensation were received because no services are being rendered. However, this may be regarded as suspicious since the training would start just as the OPT expires and terminates at the time the H-1b is approved. Still others have suggested that paid leave, where no services are rendered does not constitute employment, and is permissible.


F and J applicants subject to the cap whose grace period ends before October 1st will not qualify for a change of status unless CIS changes its policy and acts to extend the status of all F and J applicants. The approval notice will indicate approval of the underlying H-1b petition but will not approve the change of status to the H-1b category so that the beneficiary will be required to leave the country and apply for an H-1b visa at the consulate and re-enter prior to commencing employment.


An alternative to returning to the applicant's home consulate is to apply for one's H-1B visa at a consulate in Canada or Mexico as a third country national (TCN). However, in order to go to Canada or Mexico, the applicant must request consular notification, not a change of status.


We have written before that most consulates will process H-1B visa applications prior to October 1st. However, CBP, at the border, will not admit H-1B visa holders until 10 days prior to the effective date of the CIS H-1B approval notice.