In recent years, the number of H-1B petitions filed per year has exceeded the Congressionally-mandated limit ("H-1B cap") during the initial filing period beginning on April 1st for a start date of October 1st (the first day of the government's fiscal year). Previously, F-1 students who were beneficiaries of an H-1B petition often had their F-1 status expire before their H-1B status began on October 1st - a period known as "cap gap". Most commonly, a student's OPT ended in the spring or early summer, and the student's F-1 status expired 60 days after that, leaving a gap of several months before the individual's H-1B status began. In most cases, the F-1 student would have to leave the United States and return at the time the student's H-1B status became effective (typically on October 1st). Such circumstances could require the student to remain outside the United States for several months.

On April 8, 2008, the Department of Homeland Security published an Interim Final Rule (IFR) titled "Extending Period of Optional Practical Training by 17 Months for F-1 Nonimmigrant Students with STEM Degrees and Expanding Cap-Gap Relief for All F-1 Students with Pending H-1B Petitions". This rule became effective upon publication.

The IFR automatically extends the F-1 status of students with pending or approved cap-subject H-1B petitions and, for students in a period of approved post-completion OPT when the H-1B petition is filed, the OPT employment authorization as well. This cap-gap extension of OPT is automatic for eligible students. The automatic extension of an F-1 students' duration of status and employment authorization is terminated upon the rejection, denial or revocation of the H-1B petition filed on the F-1 student's behalf.

To evidence continued work authorization during this period, a student must work with the designated school official at the student's school to receive an updated Form I-20. However, because the cap-gap extension is automatic, the updated Form I-20 is not required for a student to continue working; it merely serves as proof of the extension of OPT employment authorization for I-9 purposes.