The registration phase for H-1B FY 2026 officially ended on March 24, 2025, and USCIS has notified the selected candidates by March 31, 2025. Employers sponsoring F-1 students have started the H-1B petition filing from April 1, 2025.  

Earlier this year, the Department of Homeland Security (DHS) announced a final modernization rule to enhance the operational efficiency of the H-1B process and reduce fraud. Employers planning to sponsor F-1 students must be aware of these changes as noncompliance may lead to petition denial and other legal consequences.  

This comprehensive blog post will outline all the key details and recent updates employers must know about the H-1B FY 2026 cap-gap extension, helping them effortlessly comply with the USCIS guidelines.  

H-1B Modernization Rule

On January 17, 2025, DHS announced a final modernization rule to enhance transparency and optimize the operational efficiency of the H-1B process.

Important key changes include:

1. Revised criteria for specialty occupations: Employers must prove that the job role they are hiring for clearly aligns with the H-1B beneficiary’s qualification.

2. Expansion of cap-exempt employers: More government institutions and research-focused nonprofits can now qualify for cap extension.

3. Updated cap-gap extension rules for F-1 students: Earlier students working under Optional Practical Training (OPT) used to face a gap in work authorization between the end of OPT and the beginning of their H-1B status.

However, now the automatic cap-gap extension will last until April 1 of the fiscal year, instead of October 1, allowing F-1 students to work without any issues.

4. Increased site visits: To reduce fraud and uphold the integrity of the U.S. immigration system, USCIS can now conduct site visits at third-party locations, remote worksites, and employees’ homes.

5. Clarification of legal presence for employers: Employers must be legally present in the United States to prove the business’s legitimacy.  

6. Expanded definition of U.S. employers: Employers don’t have to provide solid proof of the employer-employee relationship, instead, all they require is a legal presence and IRS tax identification number.  

7. Deference policy for extensions: USCIS will now easily approve the extension filed by H-1B workers if it is with the same employer they are presently working for.

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What is the F-1 Cap Gap?

The” Cap-Gap” refers to the period between the expiration of an F-1 student’s Optional Practical Training (OPT) and the start of their H-1B status, which normally begins on October 1. This gap arises because employers can’t file an H-1B petition more than 6 months before the intended start date, leading to a potential gap in the transition.  

However, now F-1 students working under OPT may receive an automatic extension of their F-1 status and employment authorization until April 1 of the fiscal year, allowing them to continue working without any gaps.

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Extension of the F-1 status

According to the Department of Homeland Security (DHS), some F-1 students may extend their F-1 status beyond the end of their academic program, or any OPT, if:

• The employer files a timely Form I-129, Petition for Nonimmigrant Worker, with U.S. Citizenship and Immigration Service (USCIS), requesting a change of status to H-1B.  

• The H-1B petition asks for October 1 as the start date.

• The student’s status ends between April 1 and September 30, including any applicable grace period.

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USCIS’s provision for eligible students

F-1 students who have degrees in Science, Technology, Engineering, and Mathematics (STEM) are eligible to apply for a 24-month STEM OPT extension.  

USCIS will allow F-1 students with a timely filed cap-subject H-1B petition to:

1) Stay in the United States legally (along with their F-2 dependents) if the petition is filed before the grace period ends.
 
2) Extend work authorization if their approved post-completion OPT or STEM OPT extends to or after April 1.  

Note: When the Student and Exchange Visitor Information System (SEVIS) is informed about a pending H-1B petition, it updates records to reflect the cap-gap extension.  

If no updates are recorded in the SEVIS, the Designated School Official (DSO) can request a SEVP Response Center (SRC) to fix the issue and add the cap-gap extension for receipted H-1B petitions.

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Who is not eligible for a Cap-Gap extension?

DHS states that the following categories are not eligible for the extension:

1. Petitions requesting consular processing

2. Petitions filed by cap-exempt employers such as

• Institutions of higher education

• Nonprofit research organizations  

• Government research organizations  

Note: Cap-exempt employers can file for H-1Bs anytime even if the cap has been reached.

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H-1B Petition Filing Timeline

Concerning the H-1B petition filing timeline, employers must keep the following points in mind:

• Employers must register each H-1B beneficiary individually and this must be done within the designated USCIS registration period.

• By March 31, USCIS notifies employers of the first round of petitions that they may file.  

• USCIS may later add more rounds of selected employers for filing petitions until the FY cap is met.

• Unselected petitions do not qualify for cap-gap extension during that fiscal year.

• Selected employers have a 90-day window to file the selected petitions.

What happens to H-1B petitions that are not selected?

According to USCIS, the cap-gap status will automatically terminate if an F-1 student’s H-1B petition is: 

• Denied, withdrawn, revoked, or rejected

• Not selected in the lottery  

• Approved for consular processing but not a change of status

Note: Once the H-1B petition is terminated, the student will have a 60-day grace period to leave the United States, and these students will not be considered authorized to work. However, this reason will not be applied if the status change is denied due to a violation, misrepresentation, or fraud.

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Maintaining a valid F-1 status

If due to some reason the employer withdraws the H-1B petition before the student changes to H-1B status, the student will remain in the F-1 status and has a 60-day grace period to leave unless the petition is revoked for fraud or status violations.  

If the H-1B petition is withdrawn after the status change, the student must file Form I-539 to revert to F-1(if required)

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Instructions to students and petitioners

To avoid complications and ensure a smooth transition from F-1 to H-1B status, students and employers must follow proper guidelines.

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Guidelines for Employers  

• Make sure to file and properly submit the H-1B petition before the student’s OPT expires to maintain work authorization.

• Submit the petition before the end of the grace period to ensure lawful status.

• Ensure that the petition is based on a selected registration for the same beneficiary in the correct fiscal year.

• Keep the student informed about all the important details, including the petition status, approval, rejection, or any Requests for Evidence (RFEs)

Guidelines for F-1 Students

• Make sure to stay in constant touch with your employer and get regular updates about your petition status.  

• Make sure that your DSO has updated your SEVIS record on time to reflect the cap-gap extension.

• If possible, avoid any international travel during the cap-gap extension period.  

• In case your H-1B petition is rejected, denied, or withdrawn, do not continue with your work.  

• Consult with your DSO regarding any major decisions related to your status or travel.  

Summing up

The registration period for H-1B FY 2026 ended on March 24, 2025, and the USCIS announced the lottery winners on March 31, 2025. The next crucial step involves H-1B petition filing, starting April 1, 2025.  

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On January 17, 2025, USCIS announced a final modernization rule to enhance transparency and increase the efficiency of the process. Key changes introduced by DHS include revised criteria for specialty occupations, expansion of cap-exempt employers, updated cap-gap extensions, increased site visits, and clarification of legal presence for employers. Employers must file and properly submit the H-1B petition before the expiration of the student’s OPT and keep the student updated.  

OnBlick ensures a smooth transition from F-1 to H-1B status by simplifying the H-1B filing process, document management, and real-time status tracking.  

Manage compliance seamlessly with OnBlick. Book your free demo today!

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