On June 6, 2008, President George W. Bush issued an order amending Executive Order 12989 directing federal agencies and departments to require all federal contractors to use the US Department of Homeland Security’s “electronic employment eligibility verification system,” otherwise known as E-Verify, to confirm the work authorization of: (1) all new employees hired to work in the United States during the term of the contracts, and (2) existing employees assigned to work within the United States on the contracts. 

The full text of the amendment to Executive Order 12989 can be found here.

Federal contractors, along with all other employers, already are required to verify the employment eligibility of all new employees working in the United States through the completion of Form I-9s for each new employee hired after November 6, 1986, and to update these forms as necessary.  E-Verify, previously known as Basic Pilot, is jointly operated by Department of Homeland Security (DHS) and the Social Security Administration (SSA).  After the Form I-9 is completed, E-Verify is designed to enable employers to electronically verify employment eligibility of newly hired employees using their names, Social Security numbers, and in some cases, photographs, taken from information provided on the Form I-9s. 

E-Verify is an Internet-based system, currently free to employers willing to comply with certain guidelines, which include, for example:  (1) use of the system only for the limited purpose of verifying employment eligibility of new hires after hiring the employees, and (2) use of E-Verify for all new hires, rather than selective use of the system.  Employers must sign a Memorandum of Understanding in order to participate in the program.  In addition, employers using E-Verify are prohibited from terminating or taking other adverse action against a new hire based on an E-Verify automated response indicating a “tentative nonconfirmation” regarding the employee’s eligibility for work.  Instead, the employer must follow E-Verify guidelines for attempting to resolve the “tentative nonconfirmation.”  If an employee does not contest the tentative nonconfirmation, the employer can terminate the employee’s employment and have no liability with regard to civil penalties.

The Executive Order, which was published in the June 11, 2008 Federal Register, now mandates that federal agencies and departments require federal contractors to use the E-Verify system, in addition to continuing to complete Form I-9s as required by the Immigration and Nationality Act. President Bush has instructed federal agencies with oversight of the Federal Acquisition Regulations to issue regulations adopting the E-Verify requirement.  The regulations may provide some clarity on important compliance issues, such as whether only new contracts will be covered by these requirements, or whether contract amendments and renewals also will be covered; and whether subcontractors will be required to comply with the requirements. DHS Secretary Michael Chertoff has confirmed that federal agencies have already transmitted notices of proposed rulemaking to the Federal Register for publication. It is anticipated that the notices will be published in the Federal Register within days, after which interested members of the public will have 60 days in which to submit public comments on the proposed regulations.

Secretary Chertoff estimates that the Executive Order will affect as many as one million employees across the United States, depending on the number of new federal contracts entered into over the next several years. Yet the president’s Executive Order leaves many unanswered questions about the scope of this new requirement. In particular, the Executive Order states that federal contractors will be required to use E-Verify to check the employment eligibility of not only new hires but also “all persons assigned by the contractor” to work on a federal contract in the United States – which may include long-time employees. This would be a radical departure from current E-Verify guidelines, which only permit use of the system to verify work eligibility of new hires.

If you are interested in learning more about federal contractors’ employment eligibility verification requirements, or other contractor requirements such as development and implementation of affirmative action programs, please contact any of the Arent Fox attorneys indicated below.

Stewart S. Manela
manela.stewart@arentfox.com
(202) 857-6364

Nancy Noonan
noonan.nancy@arentfox.com
(202) 857-6479

Kristine J. Dunne
dunne.kristine@arentfox.com
(202) 857-6385