December 8, 2008
The final rule amending federal procurement regulations was published in the
November 14, 2008 Federal Register (Vol. 73, No. 221 at 67651). This final rule
implements a June 9, 2008 Executive Order, instructing all federal departments
and agencies that enter into contracts to require that covered federal
contractors use E-Verify for all individuals they hire or assign to perform work
on federal government contracts in the United States.
E-Verify is an Internet based system operated by the U.S. Citizenship and
Immigration Services (“USCIS”), a part of the Department of Homeland Security,
in partnership with the Social Security Administration (“SSA”) that verifies
whether an individual is eligible to work in the United States. The E-Verify
system supplements, but does not replace, existing I-9 requirements.
The E-Verify requirements cover prime federal contracts:
- Awarded after January 15, 2009;
- Having a value of at least $100,000 (increased from $3,000 in the
proposed rule); and
- Including a period of performance of at least 120 days.
The size of the contractor entity does not matter.
Federal departments are required to amend, on a bilateral basis, existing
indefinite delivery or indefinite quantity contracts to include the E-Verify
requirement for future orders, if the remaining period of performance under the
contract extends at least six months after January 15, 2009.
Subcontracts for services or construction flowing from covered prime
contracts and having a value of $3,000 or more are subject to the E-Verify
The final rule exempts:
- Commercially available off the shelf (COTS) items;
- Items that would be COTS but for minor modifications; and
- Bulk cargo.
The covered contractor must use E-Verify to confirm the status of:
- All new workers hired during the term of the covered contract, whether
or not they are assigned to work on the federal contract or subcontract.
- All existing workers who are assigned to work on the contract or
subcontract and who are not exempt. An employee is not considered to be
directly performing duties under a contract if he or she normally performs
“support work, such as indirect or overhead functions” and “does not perform
substantial duties applicable to the contract.”
State or local governments, institutions of higher education, recognized
Indian Tribes and sureties performing under a takeover agreement entered into
with a federal agency under a performance bond only have to use E-Verify for
employees assigned to the contract or subcontract, whether new hires or existing
A covered contractor also may elect to verify all employees hired after
November 6, 1986 who are working in the United States, rather than limiting
verification to individuals working on federal contracts.
- The requirements only apply to workers hired by the contractor after
November 6, 1986.
- Workers who hold an active security clearance of “confidential, secret
or top secret” are exempt.
- Workers employed outside the United States (defined as including the 50
states, the District of Columbia, Guam, Puerto Rico and the U.S. Virgin
Islands) are not covered.
- Workers at U.S. embassies and military bases in foreign countries are
- Once an employee and employer complete an I-9 employment eligibility
form, the information from the form must be entered by the employer into the
E-Verify website to be checked against information contained in SSA and
USCIS databases. Verification of new hire eligibility through E-Verify must
be handled within three (3) business days after hire.
- SSA verifies the name, social security number and date of birth and, if
the employee has stated that he or she is a U.S. citizen, confirms whether
that is the case. If so, the worker is employment eligible. USCIS verifies
through database checks that non-U.S. citizens are authorized to work in the
- If the information provided by the worker matches the information in the
databases, no further action is required. The employer records on the I-9
form the verification ID number and result, or prints a copy of the
transaction record and retains it with the I-9 form.
- If the information cannot be verified, the E-Verify system generates a
written “SSA Tentative Nonconfirmation Notice” or a “DHS Tentative
Nonconfirmation Notice,” depending on what category of information could not
be confirmed. The employer must provide the worker with a written “Notice to
Employee of Tentative Nonconfirmation” (generated by E-Verify), and each
must sign the notice.
- If the employee contests the nonconfirmation, the employer must provide
the worker with a second notice generated by E-Verify (called a “Referral
Letter”), which tells the worker how to contact SSA or USCIS to contest the
- The worker then has eight (8) federal government workdays to resolve the
discrepancy. The employer is prohibited from terminating or taking any
adverse action against the worker while waiting for final resolution from
the SSA or UCSIS.
- If the worker fails to contest the nonconfirmation within the prescribed
period, or the employer receives a final notice of nonconfirmation, the
worker may be terminated.
- Contractors that have not enrolled in E-Verify at the time of the
contract award have 30 calendar days from the award to enroll.
- Contractors participating in E-Verify for the first time have 90
calendar days from enrollment to begin using the E-Verify program for all
new hires within 3 business days after date of hire.
- Contractors have 90 calendar days after initial enrollment in E-Verify,
or 30 calendar days of the employee’s assignment to the contract, whichever
date is later, to initiate verification of existing employees when they are
newly assigned to work on a federal contract, if they have not previously
gone through E-Verify.
- Contractors that have already been enrolled in E-Verify for at least 90
days at the time of the contract award must initiate verification of all new
hires within 3 business days after date of hire. Contractors enrolled for
less than 90 days must within 90 calendar days after enrollment initiate
verification of new hires within 3 business days after hire.
- Contractors that have already enrolled in E-Verify must initiate
verification of existing employees assigned to the contract within 90
calendar days after the contract award or 30 days after the assignment,
whichever date is later.
- Participation in E-Verify DOES NOT exempt an employer from the
requirements to complete, retain and make available for inspection I-9 forms
that relate to its employees. However, I-9 requirements are modified because
of participation in E-Verify: (1) identity documents used for verification
purposes must have photos; and (2) if the employer confirms identity and
employment eligibility in compliance with E-Verify, a rebuttable presumption
is established that the employer has not violated the Immigration and
Naturalization Act by hiring the worker.
- The employer must notify DHS if it continues to employ a worker after a
final determination of nonconfirmation (or face civil penalties of
$500-$1,000). Continued employment of a worker after a final finding of
nonconfirmation will result in a rebuttable presumption that the employer
has knowingly employed an unauthorized alien.
- There is no civil or criminal liability for actions taken in good faith
reliance on information provided by E-Verify.
The mandatory E-Verify rules were opposed by both immigrants’ rights groups
and employer groups, including both small business and large business. The Obama
Administration is unlikely to support extensive use of E-Verify, and could
modify the Executive Order of June 9, 2008.
E-Verify must be reauthorized by Congress by March 6, 2009, the day current
authorization ends, and there could be a fight in Congress. For example, Sen.
Menendez has said he would only favor E-Verify if it is accompanied by new
immigration benefits. He wants a five-year reauthorization with 500,000 new
visas. There is at least the possibility of changes in the E-Verify system or in
its mandatory use.
Information on registration and use of E-Verify can be obtained from the
of Homeland Security.
For further information or help in preparing your organization for compliance
with the new E-Verify requirements for covered federal contractor and
subcontractors, please contact the McGuireWoods
Labor & Employment,