Decoding US' new rule allowing STEM students on OPT to work for startups

economictimes.indiatimes.com:

F-1 visa in the United States, the STEM OPT extension program provides an opportunity to gain valuable work experience after graduation while extending their stay in the US for a chance of an H-1B lottery win. Concomitantly, the program is invaluable for US employers in facilitating access to well-qualified workers, most with graduate degrees.

The process of STEM OPT extensions is relatively straightforward, but the rules for working for startups can be perplexing.

Under the STEM OPT program, employers must pay their employees a base salary equal to or greater than those paid to other similarly employed US workers. This salary requirement protects both the US workers and the STEM OPT students.

However, the rules and policies governing legal compensation for employment with startups can be unclear and complex. This lack of clarity exists because startups often use stocks and stock options as a part of their compensation packages, which raises questions about how to value this type of compensation and how it should be treated under the STEM OPT program.

In 2016, the USCIS mentioned the possibility of an exception to the base salary rule for STEM OPT workers employed by startups.

This exception, the USCIS referred to as “alternative compensation,” would allow startups to provide compensation that includes stock and stock options, as long as the compensation is commensurate with the compensation provided to other similarly situated US workers. However, the USCIS did not give any further guidance on how to value or treat this type of compensation.