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Return of Petitions Not Selected in the H-1B Lottery Triggers “Cap Gap” Considerations

Author: Katherine C. MacIlwaine (Raleigh)

Published Date: May 12, 2017

United States Citizenship and Immigration Services (USCIS) announced on May 3, 2017, that data entry for the FY2018 H-1B visa lottery has been completed and that petitions not accepted under the lottery selection process will be returned. For cases for which an official receipt has not been issued, the returned petition is considered the official notice that the case was not selected in the lottery. This official notice from USCIS is critical for many employers with employees relying on “Cap Gap” for work authorization because the notice will determine when an impacted employee will lose his or her work authorization.

“Cap Gap”

“Cap Gap” refers to the regulatory provision allowing certain students with pending or approved H-1B petitions to retain F-1 status and work authorization during the period when the student’s F-1 status and work authorization would otherwise expire through an October 1 start date of an H-1B petition. This extension of work authorization provides foreign students and their employers with a valuable extension of work authorization without the work disruption that could otherwise occur once an F-1 work authorization documentation expires.

Who Qualifies for “Cap Gap”?

An F-1 student visa holder may benefit from work authorization under “Cap Gap” if the student’s optional practical training (OPT) is still valid when an H-1B petition is filed for the student by the employer but is set to expire prior to October 1. This year, USCIS began accepting H-1B petitions on April 3, 2017, so any student whose OPT would otherwise expire between April 3 and October 1, 2017, could potentially utilize “Cap Gap.”

If an H-1B receipt is issued for a petition filed on behalf of a student relying on “Cap Gap,” the student will remain authorized to work in F-1 status until October 1, 2017, assuming the H-1B is ultimately approved. However, the timing of retained work authorization can be complicated and unpredictable for those individuals whose cases are not selected in the lottery or those students who are awaiting the official announcement of results.

If an H-1B petition filed on behalf of a student is not selected in the lottery, the student will be authorized to work until the expiration of the student’s OPT or the date that the employer is notified that the case was not selected in the lottery, whichever is later. In past years, the process of returning all petitions that were not selected in the lottery has taken several weeks with many individuals officially finding out that their cases were not selected well into the summer. This means that employers with employees relying on “Cap Gap” who have not yet received receipts on affected cases should be prepared to have those employees stop working with very short notice. An employee in this situation will still benefit from the standard 60-day grace period to depart the United States, but may not work during that time.

Documenting “Cap Gap”

When an H-1B petition is filed on a student’s behalf, the student can notify the Designated School Official (DSO) at his or her school with evidence of the timely filed petition, such as a copy of the petition with shipping tracking information, to help ensure that he or she will be prepared to take advantage of “Cap Gap” should there be a need. DSOs will generally issue a preliminary Form I-20 showing “Cap Gap” work authorization until June 1 in this situation. Once the student receives a receipt for an H-1B petition selected in the lottery, the student can then report back to the DSO to obtain an extended Form I-20 for the remainder of the “Cap Gap” period.

For I-9 compliance purposes, an employer can accept a copy of an expired OPT Employment Authorization Document (EAD) and the endorsed Form I-20 recommending “Cap Gap” and note “CAP-GAP” in the “Additional Information” field. This documentation is sufficient for proof of work authorization until September 30 or the official notice that the student’s case was not selected, whichever is earlier.

Katherine C. MacIlwaine  (Raleigh)

Katherine C. MacIlwaine
*Currently licensed in New York only. Katherine joined Ogletree Deakins in December 2013. She practices employment-based immigration law, working with U.S. and multinational companies to obtain temporary and permanent work visas for employees in a range of industries. Katherine graduated magna cum laude from Duke University in 2008, receiving a B.A. in History. In 2011, she received a J.D. from New York University School of Law where she served as Senior Executive Editor of the Journal of Law...