On August 25, 2009, a federal district court in Maryland denied a challenge
by the U.S. Chamber of Commerce and other employer groups to the implementation
of a rule requiring most federal contractors and subcontractors to use E-Verify.
The rule, therefore, will take effect on September 8, 2009.
The final rule requires most companies that contract with the federal
government to provide goods and services (including companies receiving American
Recovery and Reinvestment Act funds) to use E-Verify – an Internet-based
employment verification system administered by the U.S. Citizenship and
Immigration Services, part of the Department of Homeland Security. Our
2008 article describes the rule in detail.
With some exceptions, affected employers include those with covered prime
- Awarded on or after September 8, 2009;
- Having a value of at least $100,000; and
- With a performance period of at least 120 days.
The size of the contracting entity does not matter. E-Verify requirements
also generally cover subcontracts with a value of $3,000 or more for services or
construction flowing from covered prime contracts (again, with some exceptions).
The rule exempts:
- Commercially available off-the-shelf (COTS) items;
- Items that would be COTS but for minor modifications; and
- Bulk cargo.
Covered contractors 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 assigned to work on the contract or subcontract and
who are not exempt. An employee is not considered directly to be 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
Starting September 8, 2009, affected companies will have clauses inserted in
their existing or new federal contracts, requiring E-verification of all persons
hired during the term of the contract and all persons assigned by the contractor
to perform work on the contract. In addition, as referenced above, contractors
will have the option to verify all employees hired after November 6, 1986
(i.e., not just those employees hired during or assigned to the contract).
E-verification will not be limited to foreign nationals. Rather, contractors
must run information regarding every covered employee working in the
United States through the E-Verify system. Further:
- Contractors that have not enrolled in E-Verify at the time of contract
award must enroll within 30 calendar days of award.
- Contractors participating in E Verify for the first time have 90
calendar days from enrollment to begin using the E Verify program, after
which they must verify all new hires within three business days after
their official date of hire/start date.
- Contractors have 90 calendar days after initial enrollment in E-Verify,
or 30 calendar days of the employee’s assignment to a covered contract
(whichever 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 are already enrolled in E-Verify for at least 90 days
at the time of contract award must initiate verification of all new hires
within three business days after their official date of hire/start date.
Contractors enrolled for fewer than 90 days have 90 calendar days after
enrollment to initiate verification of new hires, which in turn must
occur within three 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 contract award or 30 days after an employee’s
assignment, whichever date is later.
In addition to the above, on June 22, 2009, the Department of Homeland
Security announced that it intends to “data-mine” E-Verify records to monitor
compliance by employers and initiate follow-up investigations on what it termed
“non-compliant behaviors.” It has also created a Monitoring and Compliance
Branch to monitor such efforts and refer cases to Immigration and Customs
Enforcement for follow-up inspections.
As a result, federal contractors and their subcontractors using the E-Verify
system will be subject to increased government scrutiny. Thus, contractors at a
- Determine whether they have federal contracts or subcontracts covered by
the E-Verify rule and whether any related exemptions apply;
- Confirm the required timeline for compliance; and
- Have I-9 compliance programs in place (including training and materials
to ensure correct completion of I-9 forms), given that information from
these forms is entered into E-Verify.
The Department of Homeland Security is offering free webinars on the new rule
(select the “FAR E-Verify” topic on the
online registration form).
For further information on E-Verify or federal contractor, affirmative action
or immigration compliance generally, please contact the authors or any member of
Immigration, Labor &