E-Verify Mandatory for Federal Contractors Starting May 21

On June 6, 2008, President George W. Bush issued Executive Order 13465, requiring federal government contractors to verify the work authorization of all new hires and existing personnel assigned to perform work on future federal contracts. On November 14, 2008, regulations were issued to amend the Federal Acquisition Regulation (FAR), confirming the executive order.

The regulations were originally scheduled to take effect on January 15, 2009. As a result of a legal challenge, the federal government initially agreed to extend the implementation of the regulations until February 20, 2009. In order to allow the Obama administration an opportunity to review the regulations, the federal government has agreed to postpone implementation yet again until May 21, 2009.

Under the regulations, federal contractors will be required to use the E-Verify system to verify employment eligibility of new hires and certain current employees. All federal contracts entered into after May 21, 2009, must include a clause requiring the contractor to use E-Verify on its new hires and other employees assigned to work on the contract. As outlined below, federal contractors will have 30 days from the date of the contract award to enroll in E-Verify and a 90-day phase-in period to begin using the system.

What Is E-Verify?

E-Verify is an Internet-based system operated by the U.S. Citizenship and Immigration Services (USCIS), part of the Department of Homeland Security (DHS), in partnership with the Social Security Administration (SSA). E-Verify provides an automated link to federal databases to help employers verify employment eligibility of their employees, regardless of citizenship. E-Verify electronically checks information provided by the employee on his or her Form I-9 against records contained in DHS and SSA databases.

E-Verify is currently free to employers.

New E-Verify Requirements for Federal Contractors and Subcontractors

In an effort to promote stability and dependability in federal government procurement contracts and promote a legal workforce, federal contractors will be required to use E-Verify. Current regulations provide the following:

• Federal contracts entered into after May 21 will include a clause requiring the contractor to use E-Verify.
• E-Verify requirements will apply to all federal contracts that meet the "simplified acquisition threshold," which generally means contracts with a value of $100,000 or more are subject to the regulation.
• E-Verify requirements will also apply to subcontractors who have contracts for services or construction with a value of $3,000 or more.
• Contractors will need to enroll in E-Verify within 30 days of a contract award date. The rule allows phase-in periods for completing the required verifications. Specifically, contractors will have 90 days from the date the employer enrolls in E-Verify to initiate verification queries for employees already on staff who will be working on the contract and to begin using the system for newly hired employees. After the 90-day phase-in period, the employer will be required to initiate verification of new employees within three business days after the start date.
• Contractors will need to use E-Verify for all new hires of its organization once E-Verify is phased in, not just those assigned to federal contracts.
• Existing employees hired before the company registered with E-Verify but who are now assigned to work on federal contracts must also complete an E-Verify employment eligibility verification.

The full text of the final rules can be accessed on the Government Printing Office Web site. Additional information about E-Verify can be found on the USCIS Web site.

Legal Challenge to Federal Contractor Mandate

On December 23, 2008, a coalition led by the U.S. Chamber of Commerce filed a complaint in Federal District Court challenging the legality of Executive Order 13465 and related regulations. See Chamber of Commerce of the United States of Am. v. Chertoff, D. Md., No. 8:08-cv-03444-AW, filed 12/23/08.

Joining the Chamber of Commerce in the lawsuit are the Associated Builders and Contractors Inc., Society for Human Resource Management, and American Council on International Personnel and HR Policy Association.

Due to this legal challenge, the federal government has agreed to delay implementation of the federal contractor E-Verify mandate. As outlined above, implementation is now delayed until May 21.

Additional Attempts to Add E-Verify to Federal Legislation

Despite the temporary delay in implementation of the E-Verify federal contractor regulations, E-Verify continues to be used as a political tool. The economic stimulus package (H.R.1) passed by the House of Representatives on January 28, 2009, includes a provision that would mandate that federal contractors hired under the authority of the stimulus register for E-Verify. Whether this provision will be included in a final stimulus package, as well as what role E-Verify will play in the Obama administration's economic and immigration policies, remains to be seen.