April 9 - A common problem with H-1B applicants who are completing school is the "cap gap".  Many H-1B applicants enrolled at U.S. universities graduate in the spring or summer.  However, the new round of H-1B visas are not available until the beginning of the fiscal year which is October 1st.  Even when students graduate and participate in Optional Practical Training (OPT) for one year, their OPT often expires in the spring or summer.  This leave the H-1B applicant with a "gap" in their immigration status of several months, from the time their OPT expires until they can begin their H-1B job on October 1st.   This is not a problem when the H-1B cap is not reached during the fiscal year.  When H-1B visas are still available in the spring or summer, an employer can simply petition for an H-1B employee so that they transition from OPT to H-1B without any gaps in immigration status.    

To remedy the "cap gap" problem, the regulations allow the allow certain students with pending or approved H-1B petitions to remain in F-1 status during the period of time when an F-1 student’s status and work authorization would otherwise expire, and up to the start of their approved H-1B employment period. This is referred to as filling the cap-gap, meaning the regulations provide a way of filling the “gap” between F-1 and H-1B status that might otherwise occur if F-1 status was not extended for qualifying students.

The extension under the "cap gap" is automatic, but students should still go to their Designated School Official to get their I-20 form updated.  The updated I-20 is the only form that the H-1B applicant will have to show proof of continuing status.

The USCIS issued an FAQ that goes through several possible scenarios.