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After graduation, I took a job with a company which is not e-verified. Once my first 12 month OPT was over, I could not be employed under the same company anymore, so I was given employment with a contracting company, and I was allocated to the same company where I started working after graduation. Now I am in 17 months OPT extension. Literally nothing changed, my work, my cube, pay everything was the same as before. This company is industry leader in their domain, so I stayed. I did not get H1B last year, and it looks like I was not picked this year as well. I am eligible to apply for another 7 months of extension under 24 month extension rule. So I talked to my current employer (The contracting company) about form I983 and asked them what steps need to be taken. And I got the news saying the contracting company will not be able to apply for the 7 month extension for me since, under the new rule, the student the training (OPT) has to happen wherever I am employed and I cannot be employed under one company and be working (Optional Practical Training) at another company (My original employer). They said I can continue working till my 17 month OPT extension ends, but will not be applying for the new 7 month extension. My first employer said they are not planning to go e-verified. So it looks like I will go out of status after 17month extension period if I don’t do something about it.
1. Is it true that under the new 24 month extension rule, I cannot be employed with a contracting company and be working for a different company? This essentially means I cannot work as a contractor.
2. I could not find any clause mentioning Point1 anywhere under the new rule in USCIS website. If it is true, can you please point me to the proper section which confirms it?
3. If Point1 is not true, what proof can I show my employer to convince them that they can in fact apply for my 7 month extension and it is perfectly legal?
4. What are my options to maintain status if I do not get the 7 month extension?

I really need this 7 month extension since it will give me another shot at H1B next year. However, because of the 150 day rule, my application has to reach USCIS by May 19th if I am to be eligible.