Final Rule Requires Federal Contractors to Use E-Verify System

Effective January 15, 2009, certain federal contractors and subcontractors will be required to use U.S. Citizenship and Immigration Services' (USCIS) electronic employment eligibility verification system, E-Verify, to verify the employment eligibility of their workforces. A final rule was published in the November 14, 2008, Federal Register amending the Federal Acquisition Regulation (FAR) and implementing President Bush's Executive Order 12989 signed on June 6, 2008.

Under the final rule, federal contracts awarded and solicitations issued after January 15, 2009, will include a clause requiring the contractor and any covered subcontractors on the project to enroll in the E-Verify program within 30 calendar days of the contract or subcontract award date. Contractors will then have 90 days from the date of enrollment in the program to (1) initiate verification queries for employees working on the contract and (2) to begin using the E-Verify system to verify employment eligibility for newly hired employees. The final rule does not require federal contractors verify their entire workforce, though they may choose to do so. After this 90-day "phase-in" period, contractors will be required to initiate verification of all new hires within three business days after their start date. Companies already enrolled in the E-Verify program for more than 90 days will be require to initiate verification of newly hired employees within three business days of their start date, but will still have 90 days from the contract award date to begin using E-Verify for those employees already on staff who are assigned to the contract.

The final rule applies to federal contracts over $100,000 and for a period of performance longer than 120 days. It only applies to subcontracts if the prime contract includes the new E-Verify clause, and only for services or for construction with a value over $3,000.

Below are some additional highlights of the final rule, which is available for viewing on the Federal Register website at http://federalregister.gov/. USCIS has also released an FAQ on the Final Rule.

Current or prospective federal contractors are not required by the final rule to enroll in E-Verify now, only if and when they are awarded a federal contract or subcontract that contains the FAR E-Verify clause.
Companies already enrolled with the E-Verify program and awarded a federal contract after January 15, 2009, do not need to re-enroll, but must update their company profiles in E-Verify once a contract has been awarded.
Once a company has been designated as a federal contractor in the E-Verify system, all designated E-Verify users at the company will need to take a tutorial that explains the new federal contractor policies and procedures. The company will not be able to authorize employment through E-Verify until the tutorial has been completed.
Contracts where all work is performed outside the United States and contracts that include only commercially available off-the-shelf (COTS) items and related services are exempt from the final rule.
Only those employers that win a contract or subcontract that includes the E-Verify clause may run existing employees through E-Verify. Those companies enrolled in the E-Verify program, but who do not qualify as federal contractors or subcontractors, can only use the E-Verify program to verify employment eligibility for newly hired employees, and only after the Form I-9 has been completed.
Once an employee has been run through E-Verify and work authorization has been confirmed, the employee should not be re-verified through E-Verify by the same employer.
Employees must provide their Social Security numbers to an E-Verify employer if they have one.

We advise all of our clients to contact us if you think you may qualify as a current or prospective federal contractor or subcontractor under the final rule. As a reminder, current or prospective federal contractors are not required by the final rule to enroll in E-Verify now, only if and when they are awarded a federal contract or subcontract that contains the FAR E-Verify clause. However, it may be advantageous to begin looking at the enrollment process now in anticipation of the January 15, 2009, effective date. Our immigration attorneys are available to explain the final rule and the E-Verify program in more detail, including how they may affect your business.