What is the difference between cap-subject and cap-exempt H-1B visas?

The H-1B visa program is subject to a congressionally mandated annual limit, or 'cap,' of 65,000 visas for the general category and an additional 20,000 visas for individuals who hold a master's degree or higher from a U.S. institution. 'Cap-subject' petitions are those that must go through the annual registration and lottery process because the employer is not exempt from the limit.

Conversely, 'cap-exempt' H-1B petitions are not subject to these numerical limitations and can be filed at any time during the fiscal year. Employers that are typically cap-exempt include: 1) Institutions of higher education; 2) Non-profit entities associated with or related to an institution of higher education; and 3) Non-profit research organizations or governmental research organizations. Additionally, an individual may be cap-exempt if they have previously been counted against the cap within the past six years and have not reached the six-year maximum stay. It is important to note that if an employee works for a cap-exempt employer (like a university) and then moves to a private sector company that is cap-subject, the new employer must generally submit a petition through the lottery process unless the individual has already been counted toward the cap previously. Understanding this distinction is vital for long-term career planning in the U.S. tech and academic sectors.