An H-1B alien for whom the employer has filed a timely application for an extension of H-1B stay can continue employment for the same employer while the request for extension of stay is pending with USCIS, for a period of up to 240 days beyond the expiration of the prior period of authorized stay. 8 CFR 274a.12(b)(20)

To take advantage of this rule, the following conditions must be met:

• The application must be received by USCIS in a "timely" fashion, that is, before the expiration of the current period of H-1B status 8 CFR 214.1(c)(4);
• The H-1B alien continues to work only for the same employer that has filed the extension of stay petition on the alien's behalf.

240-day rule exception AND THE I-9 Form

The only time an employee's application for an extension of a benefit can serve in itself to allow an employee to continue to work is when the employee is in A-3, CW-1, E-1, E-2, E-3, G-5, H-1B, H-1B1, H-2A, H-2B, H-3, I, J-1, L-1, O-1, O-2, P-1, P-2, P-3, R or TN status, and has filed a timely application for an extension of stay. (All of these statuses are nonimmigrant categories where the alien is authorized for employment with a specific employer incident to status.) These individuals may continue to work for their sponsoring employer for an additional 240 days beyond the expiration of their current stay, while the application for extension of stay is pending.

Authority Cite 8 CFR 274a.12(b)(20)

A nonimmigrant alien within the class of aliens described in paragraphs (b)(2), (b)(5), (b)(8), (b)(9), (b)(10), (b)(11), (b)(12), (b)(13), (b)(14), (b)(16), (b)(19), (b)(23) and (b)(25) of this section whose status has expired but on whose behalf an application for an extension of stay was timely filed.. These aliens are authorized to continue employment with the same employer for a period not to exceed 240 days beginning on the date of the expiration of the authorized period of stay. Such authorization shall be subject to any conditions and limitations noted on the initial authorization. However, if the district director or service center director adjudicates the application prior to the expiration of this 240 day period and denies the application for extension of stay, the employment authorization under this paragraph shall automatically terminate upon notification of the denial decision;