STEM OPT employer checklist: E-Verify, I-983, I-9, reporting

Hiring a STEM OPT student adds a compliance layer beyond a standard W-2 hire. Before the first paycheck, you need E-Verify enrollment, a signed training plan, and a valid I-9. After that, ongoing duties include DSO reporting and keeping the training plan current. This checklist walks through each requirement and what it means for payroll and pay stubs.

SimpleStub generates pay stubs. It does not file your taxes, manage E-Verify, or give legal advice. Use this guide to understand the landscape, then confirm specifics with immigration and tax counsel.

What must an employer do before a STEM OPT student's first day?

Three things must be in place before work begins.

E-Verify enrollment. You must be enrolled in E-Verify to employ a STEM OPT student. This is not optional and cannot be satisfied after the fact. If your company is not yet enrolled, register at the E-Verify website before the start date.

Form I-983 (training plan). You complete and sign Form I-983, which describes the training objectives, supervision, and how the work relates to the student's STEM degree. The student submits the signed I-983 to their Designated School Official (DSO) to get the STEM OPT extension authorized. Keep a copy in your records and update it for any material changes to the role.

Form I-9. Run the I-9 process like any other hire. For STEM OPT students, the acceptable document for List A is the Employment Authorization Document (EAD), combined with the I-20 endorsed for STEM OPT. The employment must start within the EAD's validity dates, and you must keep a copy of the valid EAD.

What are the ongoing reporting requirements?

Once the student starts, two types of events trigger a reporting duty to the DSO.

Termination or departure. If the student leaves the position for any reason, including resignation, layoff, or termination, you must report it to the DSO within 5 business days.

Material changes. If the job title, salary, location, or core duties change in a way that affects the training plan, that is a material change. Update the I-983 and notify the DSO.

Neither of these shows up on a pay stub, but both are real legal obligations tied to the student's immigration status.

What are the pay and hours requirements?

STEM OPT is employer-employee work, not a stipend or internship. The position must meet all of these:

• A bona fide employer-employee relationship (you direct and control the work).
• Compensation commensurate with similarly-situated US workers in the same role.
• At least 20 hours per week.
• Work that relates directly to the student's qualifying STEM degree field.

Paying below market or structuring the role to avoid employer obligations are violations that can lead to revocation of the STEM OPT extension.

What does the STEM OPT payroll and pay stub look like?

Payroll for a STEM OPT student who is a nonresident alien for tax purposes is largely the same as any other W-2 hire, with one notable difference: no FICA.

FICA exemption. F-1 students who are nonresident aliens for tax purposes are exempt from Social Security and Medicare under IRC 3121(b)(19). The exemption covers both the employee and employer shares, so you do not withhold and you do not owe the match. STEM OPT falls within the scope of F-1-authorized work, so the exemption applies for as long as the student is a nonresident alien for tax. F-1 students are generally nonresident aliens for their first five calendar years of US presence; after that, the substantial presence test can shift them to resident-alien status and FICA then applies. Check the employee's status annually.

W-4 for NRA employees. Nonresident aliens have special W-4 rules under IRS Notice 1392. Generally they must file as single and may be required to write "NRA" in the additional instructions box. They cannot claim exemption from withholding the way a resident might.

What the pay stub shows. Because no FICA is withheld, the stub has no Social Security or Medicare lines. It should show gross pay, federal income tax, Massachusetts income tax, the employee MA PFML contribution as a post-tax deduction, net pay, and year-to-date totals for each line. Massachusetts requires an itemized pay statement each pay period under M.G.L. c. 149, s. 148, including employer name, employee name, pay-period dates, hours worked, hourly rate, and all deductions.

What records must you keep?

Keep the following for at least four years (IRS requirement) and longer if Massachusetts rules or your own policy require it:

• Payroll records, time records, and pay stubs.
• W-4 and M-4 on file before the first paycheck.
• Form I-9 and a copy of the EAD.
• Signed Form I-983 and any updated versions.
• Evidence of E-Verify case closure.

Missing records are the first thing an audit or investigation surfaces, and for STEM OPT the immigration records are as important as the payroll records.

How is the W-2 different for a STEM OPT employee?

Because no FICA was withheld, boxes 3 through 6 on the W-2 (Social Security and Medicare wages and taxes) are blank. Wages still appear in box 1. Furnish the W-2 to the employee and SSA by January 31. The year-to-date totals on the final pay stub should reconcile to the W-2, so accurate YTD tracking throughout the year matters.