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.
Covered Contracts
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 requirements.
Exempt Contracts
The final rule exempts:
- Commercially available off the shelf (COTS) items;
- Items that would be COTS but for minor modifications; and
- Bulk cargo.
Covered Workers
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 employees.
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.
Non-Covered Workers
- 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 not covered.
E-Verify Process
- 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 United States.
- 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 nonconfirmation.
- 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.
Timing
- 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.
Employer Impact
- 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.
Future Prospects
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.
Additional Information
Information on registration and use of E-Verify can be obtained from the Department 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, Immigration or Employee Benefits teams.