Welcome
Daily Labor Report®

Republican Lawmaker Pushing to End Foreign Grad Training Program

June 12, 2019, 5:16 PM

A Republican congressman is leading a new effort to end a 20-year-old program that allows foreign graduates to work in STEM fields while on their F-1 student visas.

Rep. Paul Gosar (R-Ariz.) is introducing legislation that would end the optional practical training program, which is frequently used as a pipeline to the popular H-1B specialty occupation visa. Employers often hire workers on OPT so they can be employed while trying their hand at the H-1B lottery, sometimes in multiple years.

Gosar, who’s also writing a letter asking President Donald Trump to end the program by executive order, says OPT is harming job prospects for Americans in science, technology, engineering, and mathematics.

“Big Tech firms have reached a point of profitability and market control that they do not need federal assistance, loopholes, or subsidies,” he said in a statement provided to Bloomberg Law. “It is time these companies hire American citizens and it is bad policy to allow foreigners to take great career jobs and displace American workers.”

The bill faces an uphill climb in the House: Gosar’s stance on immigration and border security has earned him top marks from low-immigration advocates such as the Federation for American Immigration Reform, which frequently are at odds with Democratic positions.

Implementation of an executive order, if signed, also could prove difficult.

Fewer Protections

Unlike the H-1B, there’s no limit on how many OPT workers can be hired in a given year. The program also doesn’t carry the same level of oversight and U.S. worker protections, and both OPT participants and their employers are exempt from Federal Insurance Contributions Act taxes.

The 15.3% tax discount for hiring OPT workers instead of U.S. workers makes them more attractive to businesses, according to the American Workers Coalition. The coalition, formed by Marie Larson, Barbara Birch, and Hilarie Gamm, aims to scale back visa and other foreign worker programs it says are harming STEM job prospects for U.S. workers.

The coalition recently has been lobbying members of Congress on OPT in particular, arguing that it’s keeping U.S.-born STEM graduates and other tech workers from being able to find a job in their field of study.

Regulations allowing one year of OPT following graduation were issued in 1992, but it wasn’t until the George W. Bush administration extended the post-graduation work period for STEM graduates in 2008 that U.S. workers really started crying foul.

A lawsuit by a group of displaced U.S.-born tech workers was able to get the Bush regulation overturned on procedural grounds, but it was replaced by an Obama administration regulation in 2016. That regulation, which is still in effect, allows STEM grads to work up to a total of three years on their student visas as long as certain requirements are met.

The U.S. tech workers are still pursuing their case against the program, arguing that it’s beyond the DHS’ authority to operate. The DHS is actively defending the lawsuit, arguing that the workers’ real beef is with the 1992 OPT regulation, and they waited too long to sue.

The Trump administration also seems to have scrapped plans to overhaul OPT, dropping a proposed rule from its regulatory agenda.

Growth Exploded, Then Slowed

OPT enrollment exploded after the Obama administration expansion, going from 73,000 in 2014 to 172,000 in 2016, according to the Pew Research Center. The bulk of that growth was driven by OPT participants with STEM degrees: There was a 400% increase in STEM graduate OPT participation between 2008 and 2016, compared with a 49% increase in OPT participants in non-STEM fields.

But growth of the program “has slowed dramatically” following an initial spike, according to a separate Pew study.

Recent studies suggest that the program isn’t harming the U.S. labor market.

Only a small portion of total students earning STEM degrees in the U.S. participate in OPT, according to a National Foundation for American Policy study conducted by University of North Florida professor Madeline Zavodny. OPT workers make up less than 1% of all workers with a bachelor’s degree in STEM, she found.

The unemployment rate for U.S.-citizen STEM workers was 2.8% as of 2016, according to New American Economy, a research and advocacy organization founded by Michael Bloomberg. That same year, there were 13 jobs posted for every unemployed STEM worker. Bloomberg Law is operated by entities controlled by Michael Bloomberg.

“I can think of exactly zero employers who ever made a hiring decision because they could avoid FICA taxes for someone,” immigration attorney Greg Siskind of Siskind Susser in Memphis, Tenn., said. “The U.S. unemployment rate in the STEM fields is about as low as it gets, so I think it would be hard to make a credible economic argument that any significant number of workers are being displaced.”

Executive Order Problematic

A representative for the White House didn’t respond to a request for comment on whether the president would sign an executive order on OPT.

Even so, it’s unclear whether such an order could simply overturn regulations that went through the public notice-and-comment process required by the Administrative Procedure Act.

“The administration would have to propose a regulation to eliminate OPT, or even just the STEM extension,” said immigration attorney William Stock of Klasko Immigration Law Partners in Philadelphia.

A Congressional Research Service analysis recently concluded that the president can issue an executive order without going through the regular notice-and-comment process to change a regulation. But an agency implementing that order—in this case the DHS—would have to follow that process in order to ditch existing OPT regulations.

Moreover, attorneys haven’t been shy about suing the administration over immigration policy changes they say violate the APA.

To contact the reporter on this story: Laura D. Francis in Washington at lfrancis@bloomberglaw.com

To contact the editors responsible for this story: Simon Nadel at snadel@bloomberglaw.com; Terence Hyland at thyland@bloomberglaw.com