H-1B Cap Explained

The H-1B visa remains one of the most sought-after pathways for employers hiring skilled foreign workers and for global professionals building careers in the United States. The single biggest constraint in the H-1B program is the annual cap: a statutory limit on how many new H-1B visas USCIS can approve each fiscal year.

Demand consistently outpaces supply. Hundreds of thousands of registrations compete for roughly 85,000 available slots, and the gap between employer needs and available numbers continues to widen. This guide breaks down exactly how the H-1B cap works, who qualifies for cap-exempt status, what the H-1B cap 2026 and H-1B cap 2027 cycles look like, and how to plan strategically when lottery odds are uncertain.

Whether you're an employer sponsoring your first H-1B petition, an HR leader managing compliance across multiple beneficiaries, or a professional seeking work authorization in a specialty occupation, this article covers the cap rules, exemptions, fees, and timing you need to understand.

What is the H-1B cap?

The H-1B cap is the congressionally mandated limit on how many new H-1B visas can be issued each fiscal year. Congress established this annual cap to regulate the flow of nonimmigrant workers entering the U.S. labor market in specialty occupations.

Under current law, U.S. Citizenship and Immigration Services (USCIS) can approve up to 85,000 new cap-subject H-1B petitions annually:

• Regular cap: 65,000 H-1B visas for beneficiaries with at least a bachelor's degree or equivalent in a relevant field.
• Advanced degree exemption: An additional 20,000 H-1B visas reserved for beneficiaries who hold a master's degree or higher from a U.S. institution.

These numbers have remained unchanged since the mid-2000s, even as demand for H-1B workers has grown substantially. Up to 6,800 visas from the regular cap are set aside for nationals of Chile and Singapore under free trade agreements, with any unused portion rolling over to the general pool.

Not every H-1B petition counts against this annual cap. Certain employers and circumstances qualify for cap-exempt status, which we'll cover in detail below. For now, the key takeaway is that the cap applies primarily to new H-1B employment with private-sector employers who don't meet specific exemption criteria.

How the H-1B lottery works

Because demand for H-1B visas far exceeds the 85,000 available each year, USCIS uses a lottery system to determine which petitions can proceed. This selection process replaced the old first-come, first-served approach to create a fairer distribution of limited visa numbers.

The electronic registration system

Before employers can file H-1B petitions, they must first submit an electronic registration for each prospective beneficiary during the designated registration period. This typically opens in early March each year. The registration fee has increased to $215 per registration for the FY 2026 H-1B cap season.

At the time of registration, employers provide basic information about the company and each beneficiary, including passport details and whether the beneficiary holds an advanced degree from a U.S. institution. USCIS then conducts a random selection from all valid registrations received.

Timeline of a typical cap season

A standard H-1B cap season follows this sequence:

1. Registration period (March): Employers submit electronic registrations through their myUSCIS accounts during a two-week window.
2. Lottery selection (late March): USCIS conducts the selection process and notifies petitioners which beneficiaries have been selected.
3. Petition filing window (April through June): Selected petitioners have 90 days from April 1 to file complete H-1B petitions with USCIS.
4. Employment start date (October 1st): Approved beneficiaries can begin H-1B employment on October 1st, the first day of the new fiscal year.

The employer's role includes completing the H-1B registration, coordinating with the beneficiary to gather documentation, filing Form I-129 (Petition for a Nonimmigrant Worker) if selected, and paying all required fees. USCIS reviews each petition during the adjudication process and issues an approval notice if the petition meets all requirements.

The lottery exists because USCIS consistently receives far more registrations than available visa numbers. This randomized approach ensures that every properly submitted registration has a chance at selection, regardless of when it was filed during the registration period.

Has the 2026 H-1B cap been reached?

Yes. USCIS has confirmed that it received enough petitions to reach both the 65,000 regular cap and the 20,000 advanced degree exemption for fiscal year 2026. You can verify this status on the USCIS H-1B cap season webpage.

Understanding what "cap reached" means matters for planning. The lottery selection determines who can file petitions, but the cap isn't technically "used" until those petitions are approved and visas are issued. The distinction matters because some selected petitions are denied, withdrawn, or revoked, which can occasionally trigger additional selection rounds.

For candidates who were not selected in the FY 2026 lottery, options include:

• Seeking employment with a cap-exempt employer
• Exploring alternative visa categories like the O-1 visa or L-1 visa
• Maintaining current F-1 status through STEM OPT if eligible
• Registering again for the H-1B cap 2027 lottery

H-1B cap for 2027: what employers should expect

The FY 2027 H-1B cap season introduces significant changes that employers must understand before registration opens. On December 23, 2025, the Department of Homeland Security announced a final rule implementing a weighted selection process based on wage levels. This rule has an effective date of February 27, 2026, placing it squarely in effect for the FY 2027 registration process.

What's changing for the 2027 H-1B cap

Under the new selection process, registrations will be weighted based on the Department of Labor (DOL) wage level for the proposed position. Higher wage levels receive more entries in the selection pool:

• Level 4 wage: Four entries in the selection pool
• Level 3 wage: Three entries in the selection pool
• Level 2 wage: Two entries in the selection pool
• Level 1 wage: One entry in the selection pool

This shift means employers must determine the Standard Occupational Classification (SOC) code and area of intended employment at the time of registration, not just when filing the actual petition. The prevailing wage and actual wage analysis becomes a front-loaded requirement.

DHS estimates that Level 4 positions could see a selection probability of around 61%, while Level 1 positions may drop to approximately 15%. These projections assume filing patterns similar to recent years, but the new rules may change employer behavior significantly.

How to prepare

Employers planning for FY 2027 should identify potential H-1B candidates early and conduct wage level analysis before registration opens. Unlike prior years, the salary and position details now directly affect selection odds. Working with immigration counsel to confirm proper SOC classification and wage levels reduces compliance risk and positions candidates for the best possible selection chances.

What is an H-1B cap-exempt visa?

A cap-exempt H-1B visa, sometimes called an "out of cap" H-1B, does not count against the annual 65,000 or 20,000 limits. Cap-exempt petitions can be filed year-round without entering the lottery, making them strategically valuable for both employers and candidates.

The cap-exempt designation depends on the employer, not the employee. If you work for a qualifying cap-exempt employer, your H-1B petition bypasses the lottery entirely. This is why cap-exempt positions are highly sought after, particularly when lottery odds are unpredictable.

H-1B cap-exempt eligibility: who qualifies?

H-1B cap-exempt eligibility depends primarily on where you work, not what you do. The following employer categories qualify for cap-exempt H-1B petitions:

• Institutions of higher education: Accredited public or private nonprofit colleges and universities.
• Nonprofit entities related to or affiliated with institutions of higher education: Organizations with formal relationships to qualifying universities, such as teaching hospitals or research institutes with institutional ties.
• Nonprofit research organizations: Organizations primarily engaged in basic or applied research.
• Government research organizations: Federal, state, or local government entities conducting research.

Employee vs. employer eligibility

The exemption attaches to the employer, not the employee. An engineer working at a private tech company must go through the lottery, but that same engineer working at a university-affiliated research lab may qualify for cap-exempt status.

There are common misunderstandings about eligibility. Working at a university campus doesn't automatically mean cap-exempt status if your actual employer is a third-party contractor. Similarly, performing research doesn't qualify you if your employer is a for-profit corporation. USCIS evaluates the petitioning employer's organizational structure and primary function, not just the job duties.

H-1B cap-exempt processing time

H-1B cap-exempt processing time differs from cap-subject cases in one significant way: timing flexibility. Because cap-exempt petitions aren't constrained by the lottery calendar, petitioners can file whenever the position and candidate are ready.

Standard USCIS processing times for H-1B petitions vary by service center and case volume, typically ranging from three to six months. Premium processing remains available for cap-exempt petitions, guaranteeing a decision within 15 calendar days for an additional fee. This functionality allows cap-exempt employers to expedite hiring when timing is critical.

Common delays in cap-exempt cases include:

• Insufficient documentation of the employer's qualifying nonprofit or educational status
• Unclear organizational relationship between the petitioner and an affiliated institution
• Missing or improperly certified labor condition application

To avoid delays, cap-exempt petitioners should submit complete documentation establishing the employer's qualifying status upfront and ensure the labor condition application aligns with the position details in the H-1B petition.

Can you move between cap-exempt and cap-subject jobs?

Portability rules allow H-1B workers to change employers, but moving between cap-exempt and cap-subject employment involves specific requirements.

If you currently hold H-1B status through a cap-exempt employer and want to move to a cap-subject employer, you generally need to be counted against the cap unless you were previously counted. If you've never held cap-subject H-1B status, you must either enter the lottery or find another cap-exempt position.

The reverse is simpler: moving from a cap-subject employer to a cap-exempt employer doesn't require re-entering the lottery because cap-exempt petitions aren't subject to numerical limits.

Important note: Misclassifying a position as cap-exempt when it doesn't qualify creates serious compliance risks. USCIS scrutinizes cap-exempt claims carefully, and errors can result in petition denial or revocation. Employers should verify their qualifying status with legal counsel before filing.

The $100,000 H-1B rule explained

The new H-1B fee that you’ve likely heard of refers to a presidential proclamation issued on September 19, 2025, restricting H-1B visa issuance except for petitions accompanied by a $100,000 payment.

Who has to pay $100,000 for an H-1B visa?

Under the September 2025 proclamation, H-1B beneficiaries who are outside the United States and require consular processing must have their petitions accompanied by a $100,000 fee. This fee does not apply to change of status filings for foreign nationals already in the U.S.

This figure is separate from standard H-1B filing fees, which include:

• Base I-129 filing fee: $460
• ACWIA training fee: Varies by employer size
• Fraud prevention and detection fee: $500
• Public Law 114-113 fee: $4,500 for certain employers
• H-1B cap-exempt fee components vary based on employer size and cap status

The $100,000 requirement has caused significant confusion because it applies only to specific circumstances and has a defined expiration date. Employers and candidates should confirm current requirements with immigration counsel before filing.

New and proposed rules affecting the H-1B cap

Several H-1B cap-exempt new rules and regulatory changes affect how employers approach the cap process:

Wage-weighted selection (effective February 27, 2026)

As noted above, the DHS final rule implementing wage-weighted lottery selection fundamentally changes registration strategy. Employers must now consider wage levels at the time of registration, not just petition filing.

Registration integrity measures

USCIS has implemented measures to prevent multiple registrations for the same beneficiary across related entities without a legitimate business need. Petitioners who submit duplicative registrations risk denial or revocation of all related petitions without fee refunds.

Increased USCIS scrutiny on amendments

The new selection rules include enhanced scrutiny of H-1B amendments that decrease offered wages. Inconsistencies between registration data and subsequent filings could trigger requests for evidence or denials.

What remains unchanged: the statutory cap numbers (65,000 plus 20,000), the basic eligibility requirements for specialty occupation positions, and the prevailing wage obligations under the labor condition application process.

Is the H-1B limited to 6 years?

The standard maximum period for H-1B status is six years, typically granted as an initial three-year period followed by one three-year extension. After six years, you generally must leave the United States for at least one year before becoming eligible for another H-1B.

F-1 students and the cap gap extension

F-1 students transitioning to H-1B status face a timing challenge: post-completion OPT or STEM OPT work authorization often expires before October 1, when cap-subject H-1B status can begin.

The cap gap extension bridges this gap for eligible students. If your employer files a cap-subject H-1B petition requesting a change of status before your OPT or STEM OPT expires (or during your 60-day grace period), your F-1 status and employment authorization automatically extend through September 30 of that year, or until your H-1B petition is denied, withdrawn, or revoked.

How Lighthouse helps employers navigate the H‑1B cap

The H‑1B cap process requires coordination across USCIS, the Department of Labor, and the Department of Homeland Security. Employers must manage detailed documentation, compliance risks, wage analysis, and tight timelines, all while supporting foreign workers and internal teams.

Lighthouse supports employers through eligibility diagnostics, cap-exempt evaluation, and long-term visa strategy planning. Our teams combine legal review, case management, and technology to coordinate filings, dependents, deadlines, and ongoing compliance. Start your evaluation with confidence today.

Frequently asked questions about the H‑1B cap

What happens if I'm not selected in the H-1B lottery?

If your registration is not selected, you cannot file a cap-subject H-1B petition for that fiscal year. Your options include maintaining your current nonimmigrant status (such as F-1 with OPT or STEM OPT), seeking employment with a cap-exempt employer like a university or nonprofit research organization, exploring alternative visa categories such as O-1, L-1, or TN, or registering again in the next cap season.

Can I apply for both the regular cap and the advanced degree exemption?

USCIS automatically enters you into both pools if you hold a U.S. master's degree or higher. First, your registration goes into the advanced degree exemption pool (20,000 visas). If not selected there, it moves to the regular cap pool (65,000 visas). This gives advanced degree holders two chances at selection. You do not need to submit separate registrations or take any special action—USCIS handles this automatically based on the education information provided during registration.

How does the new wage-weighted lottery work for fiscal year 2027?

Starting with the fiscal year 2027 cap season, USCIS will use a weighted selection process based on the Department of Labor wage level for the position. Registrations offering Level 4 wages receive four entries in the selection pool, Level 3 wages receive three entries, Level 2 wages receive two entries, and Level 1 wages receive one entry.

Can I work while my H-1B petition is pending?

It depends on your current status. If you are already in the United States on F-1 status with valid OPT or STEM OPT employment authorization, you can continue working under that authorization while your H-1B petition is pending. If your employer files an H-1B transfer petition and you are currently in valid H-1B status with another employer, you can begin working for the new employer as soon as they file the petition.

What is the cap gap extension for F-1 students?

The cap gap extension bridges the gap between the end of OPT or STEM OPT employment authorization and the October 1 start date of cap-subject H-1B status. If your employer files an H-1B petition requesting change of status before your OPT expires (or during your 60-day grace period), your F-1 status and work authorization automatically extend through September 30. This prevents employment authorization gaps for students transitioning from F-1 to H-1B. Your SEVIS record and I-20 should reflect the cap gap extension. If your H-1B petition is denied, withdrawn, or revoked, the cap gap extension ends, and you receive a 60-day grace period to depart the U.S. or change status.

Do cap-exempt H-1B petitions require a Labor Condition Application?

Yes. All H-1B petitions, whether cap-subject or cap-exempt, require a certified Labor Condition Application (LCA) from the Department of Labor. The LCA certifies that the employer will pay at least the prevailing wage or actual wage (whichever is higher) and that hiring the H-1B worker will not adversely affect U.S. workers.

Can my family members accompany me on H-1B status?

Yes. Your spouse and unmarried children under 21 can accompany you on H-4 dependent status. H-4 dependents can live in the U.S., attend school at any level, and travel internationally. Spouses may be eligible for employment authorization if you are the beneficiary of an approved I-140 immigrant petition as part of the employment-based green card process.

What fees does the employer have to pay for an H-1B petition?

Employers must pay all mandatory government filing fees by law. These typically include the base I-129 filing fee ($460), the fraud prevention and detection fee ($500 for most new petitions), and the ACWIA training fee ($750 or $1,500 depending on employer size).

How long does USCIS take to process H-1B petitions?

Standard processing times vary by service center and current caseload, typically ranging from three to six months. Cap-subject petitions filed during the April through June window often face longer processing times due to volume. Premium processing is available for an additional fee and guarantees a decision within 15 calendar days.

Can I extend my H-1B beyond the initial three years?

Yes. You can extend H-1B status in three-year increments up to the six-year maximum. To extend, your employer files a new Form I-129 petition with USCIS before your current authorization expires, along with an updated Labor Condition Application and evidence that the position and employment continue.

What happens if I lose my job while on H-1B status?

You receive a 60-day grace period (or until your I-94 expires, whichever comes first) to find a new employer to sponsor you, change to another visa category, or prepare to depart the United States. During this grace period, you cannot work but you can remain in the U.S. legally.

Can I apply for a green card while on H-1B status?

Yes. The H-1B is a dual intent visa, which means you can pursue permanent residence while maintaining lawful temporary status. Many H-1B workers transition to green cards through employment-based categories such as EB-1, EB-2, or EB-3. The green card process typically begins with a PERM labor certification filed by your employer with the Department of Labor, followed by an I-140 immigrant petition with USCIS, and finally adjustment of status or consular processing.