Legal Bulletins

Department of Homeland Security (DHS) Secretary, Janet Napolitano, announced on July 8, 2009 that the long-delayed E-Verify rule will go into effect on September 8, 2009. DHS finalized rules amending the Federal Acquisition Regulation (FAR) in November 2008 which implemented the Bush administration’s requirement that all federal contractors use the government’s E-Verify program. Nevertheless, implementation of the program has been delayed three times in the face of criticism from employers, unions and immigrant rights organizations challenging E-Verify’s effectiveness. E-Verify is an Internet-based system operated by DHS in partnership with the Social Security Administration that allows participating employers to electronically verify the employment eligibility of their employees.

The final rule only applies to contracts issued after September 8, 2009 that contain the E-Verify clause required by the rule. Affected contracts include prime federal contracts with a period of performance longer than 120 days and a value above the simplified acquisition threshold ($100,000) awarded after September 8, 2009. The rule also covers subcontractors if the prime contract is covered and the subcontract is for services or construction with a value over $3,000. Contracts that include only commercially available off-the-shelf (COTS) items (or minor modifications to a COTS item) and related services or where all work is performed outside the United States, are exempt from the requirement.

An employee “assigned to the federal contract” for purposes of the new rule includes any employee hired after November 6, 1986, who is directly performing work in the United States under a contract subject to the E-Verify requirement. An employee is not considered to be directly performing work under the contract if the employee normally performs support work, such as indirect or overhead functions, and does not perform any substantial duties under the contract. However, an employee who does work on the contract will not be exempted simply because of the intermittent nature of the work or the length of time spent performing the work.

Contractors that have not yet enrolled in E-Verify will have 30 days from the date of the contract award to enroll and 90 days from the date of enrollment to initiate verification for employees already on its staff who will be working on the contract and to begin using the system to verify newly hired employees. After this 90-day “phase-in” period, contractors will be required to initiate verification of each newly hired employee within three (3) business days after his/her start date. Employees who have already been verified through E-Verify need not be re-verified. However, an employee’s previous employment authorization through E-Verify from another employer does not satisfy a subsequent employer’s obligation to use E-Verify.

Contractors may initiate verification of a newly hired employee before his/her start date if the employee has accepted the job offer and filled out the Form I-9, however, contractors are prohibited from pre-screening job applicants. The E-verify system may be used for new hires only after the employee has been offered the job and has accepted. Contractors must continue to use E-Verify for the life of the contract for all of their new hires, whether or not they are employees assigned to the contract.

Companies which participate in the E-Verify program are required to post the notice provided by DHS indicating its participation in the program as well as an anti-discrimination notice issued by the Office of Special Counsel for Immigration-Related Unfair Employment Practices at the Department of Justice. The notices can be found in the “On-line Resources” section of the E-verify system once the company is enrolled.