Obama Administration Adopts E-Verify Federal Contractor Rule, Drops Social Security No-Match Rule

Department of Homeland Security (DHS) Secretary Janet Napolitano recently announced the Obama administration's plans as they relate to two regulations affecting employment eligibility verification. The administration fully reviewed the E-Verify federal contractor rule, originally signed as an executive order by former President Bush in 2008, and has now decided to move forward with its full implementation. The E-Verify program is currently due to sunset at the end of the fiscal year on September 30, 2009, although it is expected to be extended under the final version of the DHS appropriations bill. The rule itself is actually an amendment to the Federal Acquisition Regulation (FAR), which governs the federal government's acquisition process. Beginning September 8, 2009, the rule requires certain federal contractors and their subcontractors to begin using the E-Verify program to electronically verify the work eligibility of both newly hired employees and existing employees assigned to work on government contracts. More information on the E-Verify program and the federal contractor rule can be found in our previous advisory on this topic. The amendment to the FAR is currently the subject of federal litigation, and it's not clear at this time how the DHS' announcement could affect those proceedings.     

In related news, the Senate passed an E-Verify amendment to the DHS appropriations bill that, if signed into law, will establish permanent reauthorization of the E-Verify program and mandate its government-wide application to all future covered federal procurements and contract awards. The proposed amendment would require covered federal contractor and subcontractor verification of existing employees who work on covered government contracts. If implemented, it will be a major expansion of the current requirements in the federal contractor rule. The Senate has also passed an amendment that would allow employers to use the E-Verify system for all employees, rather than just new hires. The House had already passed its own version of the DHS appropriations bill, and the two chambers must now reconcile their versions in conference.    

Secretary Napolitano also announced that DHS plans to rescind the Social Security No-Match Rule, which has been stalled in federal litigation and has never been fully implemented. The No-Match Rule laid out procedures for employers to follow if they receive Social Security Administration (SSA) no-match letters or DHS notices regarding discrepancies with an employee's name or Social Security number. The proposed rule required employers and their employees to resolve these discrepancies in a very short time frame or face a presumption of actual knowledge that the employee lacked employment authorization. DHS has acknowledged that the no-match letters are often received by employers months and even years after the submission of W-2 earnings reports. DHS has also acknowledged that the discrepancies are often a result of the high percentage of inaccurate data within the SSA database. For these and other reasons, DHS has made the decision to scrap the No-Match Rule and, instead, focus on the full implementation of the E-Verify program as the best means to combat unauthorized employment. On July 9, the Senate passed an amendment to the DHS appropriations bill that would effectively block DHS' attempt to rescind the No-Match Rule, and it's not clear at this time whether this amendment will be in the final version.          

We will continue to provide you with the latest news as it relates to the E-Verify federal contractor rule and the DHS' attempt to expand the E-verify Program. In the meantime, it is important to remember that E-Verify participation by federal contractors will be implemented in covered federal procurements and contracts awarded on or after September 8, 2009, as well as those current contracts and subcontracts that are amended to include these new requirements. Please let one of the attorneys in our immigration group know should you have any questions or require our assistance with the E-verify sign up process and its maintenance. Our immigration attorneys are available to explain the federal contractor rule and the E-Verify program in more detail, including how these changes may affect your business.    

In addition, we are pleased to announce an upcoming Webinar presentation on this important issue, "E-Verify Explained." This will be a great opportunity for employers to get an in-depth overview of the E-Verify program and keep up-to-date on all the latest developments. Look out for an announcement regarding the specific date and time in the coming weeks!