From the adjudicators field manual:
http://uscis.gov/lpbin/lpext.dll/in...-redacted-1?f=templates&fn=document-frame.htm
(b) Terms and Conditions of the Waiver. The restrictions on the grant of the waiver to foreign medical graduates under section 212(e) of the Act, as detailed in section 214(l) of the Act, are as follows:
• The foreign medical graduate must submit a “no objection” statement from the government of his or her country of nationality or last residence abroad (home country) unless the foreign medical graduate has no contractual obligation to return to his or her home country upon completion of the graduate medical research or training.
• Where the request is by an interested State agency, the grant of the waiver must not cause the number of waivers allotted for that State for that fiscal year to exceed 20. Note: There is no limit on the number of waivers that may be granted to foreign medical graduates under the Federal program.
• The foreign medical graduate must agree to practice medicine at the health care facility named in the waiver application for at least three years, and only in HHS- designated shortage areas. There are two exceptions to this requirement:
– If the United States Department of Veteran's Affairs (VA) requests the waiver, the foreign medical graduate must practice medicine with the VA for at least three years, but does not need to do so in an HHS-designated shortage area.
– If an interested Federal agency requests the waiver so that the agency can employ the foreign medical graduate full-time in medical research or training, the foreign medical graduate may fulfill his or her obligation by working for the agency for at least three years in that capacity, rather than by practicing medicine in an HHS-designated shortage area.
• The foreign medical graduate must demonstrate a bona fide offer of full-time employment at a health care facility or organization, and such employment must have been determined to have been in the public interest.
• The foreign medical graduate must agree to fulfill the three-year obligation as an H- 1B nonimmigrant.
• The foreign medical graduate must agree to start employment within 90 days of receipt of waiver approval.
• A foreign medical graduate who does not fulfill the three-year obligation for the health care facility or organization named in the waiver application becomes subject once again to the two-year foreign residence requirement, unless USCIS finds that extenuating circumstances exist, such as closure of the facility or hardship to the alien that would justify a shorter period of employment. The foreign medical graduate will, however, be required to serve the balance of the three-year period with another qualifying health care facility or organization.
• A foreign medical graduate who obtains a waiver under section 214(l) of the Act may not obtain permanent residence, whether by an immigrant visa or by adjustment of status, until the foreign medical graduate has satisfied the service obligation that the foreign medical graduate agreed to accept.
Note: To prevent claims that a foreign medical graduate was unaware of the obligations that accompany a waiver under section 214(l) of the Act, an addendum is affixed to the I-797 approval notice which specifies the terms and conditions that accompany the waiver. The addendum identifies whether a State Department of Public Health or an Interested U.S. Government Agency made the request for a waiver, while the applicable public law number is listed on the Form I-797 itself.
(c) Effective Date. The IIRIRA amendments to section 212(e) of the Act became effective on September 30, 1996. The reasoning in Matter of Soriano, 21 I&N Dec. 516 (BIA 1996; AG 1997), compels USCIS to adjudicate an application for the waiver according to the law in effect at the time of adjudication. Therefore, foreign medical graduates who were granted a waiver of the two-year foreign residence requirement by the Service or USCIS on or after September 30, 1996, are subject to the terms and conditions of section 214(l) of the Act, regardless of the date the waiver request was initiated by the interested Federal agency or State Department of Public Health. These foreign medical graduates may not apply for any other change of nonimmigrant status or for status as a lawful permanent resident (including the Diversity Visa (DV) lottery program), unless the terms and conditions of section 214(l) of the Act have been met.
(d) Ability to Change Status From J-1 to H-1B. Section 214(l)(2)(A) of the Act, as amended by section 622 of IIRIRA, allows a change of status from J-1 to H-1B for those foreign medical graduates who were granted waivers of the 2-year foreign requirement under both the state and federal programs. The foreign medical graduate, however, must be otherwise eligible to apply for a change of nonimmigrant status under section 248 of the Act. This includes the requirement of timely filing of the change of status application. However, the statutory ineligibility for change of status under section 248 continues to apply to foreign medical graduates who obtain a section212(e) waiver based on exceptional hardship or persecution (i.e. under section212(e) itself, rather than section214(l)).
(e) Foreign Medical Graduates Who Again Become Subject to the Two-Year Foreign Residence Requirement. As noted above, a foreign medical graduate who obtains a waiver under section214(l) may not obtain permanent residence until the foreign medical graduate has completed his or her service obligation. A waiver under section214(l), moreover, is void if the foreign medical graduate does not meet this requirement. Under section 214(l)(3)(A) of the Act, a foreign medical graduate who does not practice medicine for three years for the health care facility or organization named in the waiver application again becomes subject to the two-year foreign residence requirement. The alien may, however, request that the early termination of employment with the named health care facility be excused based on “extenuating circumstances,” which can include hardship or closure of the health care facility. See section 214(l)(1)(c)(ii) if the Act. As part of the request, the alien must submit an employment contract with another health care facility in an HHS-designated shortage area for the balance of the 3 years. If the interested Federal agency was the VA, the alien must submit an employment contract with another VA facility for the balance of the three years. 8 CFR 212.7(c)(9)(iv) states that under no circumstances will a foreign medical graduate be eligible to apply for change of status to another nonimmigrant category, for an immigrant visa or for status as a lawful permanent resident prior to completing the requisite 3-year period of employment for a health care facility located in an HHS-designated shortage area.
Under section 214(l)(3)(B) of the Act, the foreign medical graduate also once again becomes subject to the two-year foreign residence requirement if, at any time during the three-year period following approval of the waiver, his or her employment ceases to benefit the public interest.