The SWT program is a component of State’s Exchange Visitor Program, known as the J-1 Visa Program, which was established to implement the purposes of the Fulbright-Hays Act, including strengthening ties and increasing mutual understanding between the people of the United States and the people of other countries through educational and cultural exchanges. The SWT program—one of the largest U.S. exchange programs—offers young people who might otherwise lack the means to visit the United States a unique opportunity to spend up to 4 months in this country while working to defray program costs. To administer the SWT program, State works in partnership with private sector sponsors, who may contract with overseas and domestic agents to handle various administrative functions. Over time, State has identified concerns about the SWT program, such as abuses of some SWT participants by employers, links between some SWT participants and organized crime, and overshadowing of the program’s cultural exchange component by its work component. Participants. To qualify for the program, exchange visitors under the SWT program must meet certain criteria, including being full-time college or university students. Participants from most countries are required to be preplaced in a job before entering the United States. While in the United States, SWT participants generally work in low-wage service positions such as amusement park ride operator, cashier, lifeguard, resort worker, restaurant worker, or retail sales assistant. Participants come from all over the world and work throughout the United States year-round, based on the timing of their major academic breaks. For example, State records show that in 2014, approximately 79,000 SWT participants from more than 120 countries worked in all 50 states and the District of Columbia. Figure 1 shows SWT participants’ numbers, countries of origin, and U.S. job locations from January to mid-November 2014. Sponsors. SWT sponsors are U.S. organizations that bring participants to the United States and facilitate their employment and cultural exchange. To be eligible for designation as a sponsor, an organization must demonstrate to State’s satisfaction its ability to comply, and remain in continual compliance, with all program requirements and to maintain certain financial obligations and responsibilities as an SWT sponsor. State’s records show that as of November 2014, the SWT program had 41 active sponsors. Sponsors are the participants’ primary point of contact and are responsible for addressing issues that affect the health, safety, and welfare of participants while they are in the United States. Other aspects of sponsors’ roles and responsibilities include the following: Sponsors may recruit prospective SWT participants directly or through overseas agents. Sponsors are required to enter selected participants’ data in the Student and Exchange Visitor Information System (SEVIS). Sponsors are responsible for ensuring that participants have employment in the United States and are required to vet potential employers and their job offers by contacting each employer directly and verifying the business owner’s or manager’s contact information and location as well as the company’s line of business. Before participants arrive in the United States, sponsors are required to provide an orientation to prepare them for life in the United States as well as information about what to do in an emergency. After participants arrive in the United States, sponsors are required to monitor participants’ health, safety, and welfare and ensure that participants receive exposure to U.S. culture. Overseas and domestic agents. Sponsors may contract with overseas and domestic agents to carry out certain SWT program functions. Overseas agents generally assist sponsors with recruiting participants for the SWT program, assessing participants’ qualifications, and identifying U.S. job placements for participants. Domestic agents assist sponsors with functions such as arranging cultural activities for participants, helping participants find housing, identifying participant job placements, and providing participants with transportation. Employers. SWT employers are businesses in the United States that hire SWT participants for positions that the sponsors confirm are seasonal or temporary and do not displace U.S. workers. SWT employers have typically included hotels, restaurants, retail stores, ski resorts, and theme parks, among others. State Department. State’s Bureau of Educational and Cultural Affairs administers the SWT program through the Office of Private Sector Exchange. In addition, State’s Bureau of Consular Affairs adjudicates visas overseas and conducts domestic monitoring visits to SWT participants. State’s Kentucky Consular Center, established to assist in administering certain classes of visas, also provides a secondary check on employers of SWT participants. For more information about individual State offices’ roles and responsibilities related to the SWT program, see appendix II. As a private sector exchange program, the SWT program is primarily funded through fees paid by SWT sponsors and participants. For example: Participants pay sponsors or overseas agents program fees for services such as assisting with job preplacement and acquiring airline tickets and insurance. Participants also pay a visa application fee to State. Sponsors pay State a fee when they apply for designation or redesignation as SWT sponsors. In addition, sponsors that hire domestic agents may pay the agents for their services. Overseas agents pay sponsors a portion of participants’ program fees. Figure 3 shows the flow of funds among the primary entities in the SWT program. Concerns about the SWT program have related primarily to abuses of SWT participants by employers, links between SWT participants and organized crime, and an overshadowing of the program’s cultural exchange component by its work component. Abuses of SWT participants by employers. In 2010, Consular sections overseas raised concerns about the exploitation of some SWT participants and fraud relating to employment offers in the United States. In 2011, print and broadcast media reported further exploitation and abuses of some SWT participants. For example, SWT participants working full-time for a certain employer were reported to be earning only $160 to $560 per month while paying $395—twice the market rate—for company housing. State also acknowledged an increase in SWT-related complaints regarding, for example, improper or unsafe job placements, fraudulent job offers, post-arrival job cancellations, inappropriate work hours, and problems regarding housing and transportation. Links between participants and organized crime. Beginning in early 2010, law enforcement agencies identified an emerging relationship between organized criminal activity and some SWT participants, who were at risk of being recruited to organized crime because they were eligible for Social Security numbers. U.S. law enforcement investigations revealed that while some SWT participants may have been misled into criminal activities, other participants willingly and deliberately engaged in activities such as tax fraud, health care fraud, and illicit money transfer schemes. In 2012, State also reported that criminal organizations had involved SWT participants in incidents relating to illegal transfer of cash, the creation of fraudulent businesses, and violations of immigration law. Overshadowing of cultural exchange component. In 2012, State reported that in recent years, the work component of SWT had often overshadowed the core cultural exchange component of the program necessary for the SWT program to be consistent with the intent stated by the Fulbright-Hays Act. State attributed this imbalance to the attitudes of some sponsors, employers, and participants. For example, State noted that many participants viewed the program primarily as an opportunity to work in different jobs and to earn more money than they would at home. To better protect the SWT program from misuse and participants from abuse, State amended federal requirements in 2011 and 2012, imposing tighter restrictions on participants and sponsors. State also capped the size of the program to maintain it at a manageable size while State addresses the identified concerns. Additionally, State expanded its internal requirements and guidance for visa adjudication, with a goal of better ensuring participants’ health, safety, and welfare after they arrive in the United States. State issued interim final rules (IFR) in 2011 and 2012 that amended the federal regulation for the SWT program. 2011 Interim Final Rule. In 2011, State issued an IFR amending the SWT regulation, which went into effect in July 2011. These changes, which expanded on a pilot program that State had announced for the 2011 summer season, were intended to impose tighter controls and restrictions on all SWT participants and sponsors. The 2011 IFR specified the following, among other things. All applicants from countries that do not participate in the Visa Waiver Program must have prearranged jobs before entering the United States. Sponsors must vet all potential host employers to confirm that they are ongoing and viable business entities; must fully vet all job offers, including verifying the terms and conditions of such employment; and must not place participants in any prohibited position, such as adult entertainment or domestic help. Sponsors must fully vet all overseas agents whom they engage to assist in functions such as screening, selecting, and monitoring participants. Sponsors must contact participants on a monthly basis to monitor their welfare and physical location. 2012 Interim Final Rule. In May 2012, State published its 2012 IFR, which, according to State, was intended to expand on the 2011 changes to further protect the health, safety, and welfare of SWT participants. Most of the regulatory changes announced in the 2012 IFR took effect in May, and the changes remained in effect as of December 2014. The 2012 IFR explained that the 2012 regulatory changes included, among others, increased language requirements for participants, requiring them to have sufficient English not only to perform their jobs, as previously required, but also to protect themselves as they navigate daily life; an expanded list of job placement requirements and prohibitions—for example, placements must be seasonal or temporary, must provide opportunities for participants to interact regularly with U.S. citizens, and must not displace U.S. citizen workers; and requirements that sponsors submit annual participant price lists to provide itemized breakdowns of costs that participants must pay to both overseas agents and sponsors; assist participants in arranging housing and transportation when needed; and vet domestic agents.