Effective September 8, 2009, General Service Administration (GSA) regulations will require covered federal contractors to use the “E-Verify system” to verify new and existing employees’ employment eligibility.

Background

Over a year ago, President George W. Bush issued an order amending Executive Order 12989 directing all federal agencies and departments to require all federal contractors to use the U.S. Department of Homeland Security’s (DHS) “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 amendment to Executive Order 12989 (June 6, 2008) can be read by clicking here. E-Verify, which was previously known as Basic Pilot, is jointly operated by DHS and the Social Security Administration (SSA). 

The final regulations implementing President Bush’s Executive Order were issued in November 2008, but the implementation date was delayed first by the Obama Administration, and then further delayed as a result of a court action filed by the U.S. Chamber of Commerce and others, Chamber of Commerce of the United States of America, et al. v. Napolitano, 8:08-CV-03444-AW (US District Court for the District of Maryland).  On July 13, 2009, the court-imposed stay was lifted, and on August 25, 2009 the court ruled that the federal government does have authority to institute the regulations.  The plaintiffs have appealed the decision, but it is uncertain when the appeal process will be concluded.  In the meantime, the DHS has announced that the regulations will become effective on September 8, 2009.  Therefore, federal contractors should make arrangements to comply with the regulations. 

New E-Verify Requirements for Federal Contractors Do Not Replace Form I-9s

E-Verify is designed to enable employers to electronically verify employment eligibility of employees using their names, Social Security numbers, and in some cases, photographs, taken from information provided on or as supporting documentation to the Form I-9s.  Federal contractors, along with all other employers, already are required pursuant to the Immigration and Nationality Act, as amended, 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 is not a substitute for an employer’s obligation to complete Form I-9s for all new hires within the first 3 business days of employment.  Rather, as of September 8, 2009, E-Verify will be an additional requirement for covered federal contractors, and will remain voluntary for all other employers unless state law requires the use of E-Verify. 

Covered Federal Contractors

Even though the effective date of the regulations is September 8, 2009, this does not mean that all federal contractors must begin using E-Verify by that date.  Rather, the E-Verify regulations will apply only to covered contractors, including employers with at least one federal prime contract that exceeds $100,000 and (a) lasts at least 120 days, (b) for which all or some of the work is performed in the United States, and (c) is not exclusively for commercially available off-the-shelf (COTS) items or minor modifications to a COTS item and related services.   Subcontractors are also subject to the E-Verify requirements if they have at least one subcontract for services or construction that has a value of more than $3,000, includes work performed in the United States, and the prime contract under which they are providing goods or services includes a clause mandating use of E-Verify.  In addition, the E-Verify requirements will apply only to newcontracts entered into after the September 8, 2009 effective date for which the contract or solicitation includes the Federal Acquisition Regulation (FAR) clause mandating use of E-Verify at section 52.222-54, or existing contracts for which federal agencies have applied the new FAR provision.

Covered contractors and subcontractors that have at least one of the aforementioned types of covered contracts will have 30 days from the date of contract award to enroll in E-Verify, and additional time thereafter in which to begin using the E-Verify system. 

The regulations also dictate how covered contractors and subcontractors must use E-Verify system, and what to do in the event that the E-Verify system is unable to confirm an employee’s employment eligibility.

                        *                                  *                                  *                                  *         

DHS estimates that the new regulations will affect hundreds of thousands of employees, and possibly 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. 

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 or compliance with the Service Contract Act, please contact any of the Arent Fox attorneys indicated to the right.