The Federal Acquisition Regulation (FAR) has been amended with respect to federal contractors and subcontractors. Effective January 15, 2009, clauses will be inserted into certain federal contracts committing employers to use the US Citizenship and Immigration Services’ E-Verify System to confirm that new hires and employees directly performing work in the United States under federal contracts are authorized to work.

E-Verify, previously known as Basic Pilot, is a Web-based system jointly operated by the Department of Homeland Security (DHS) and the Social Security Administration (SSA). Although all employers are required to verify the employment eligibility of all new employees working in the United States via the completion of Form I-9s for each new employee hired after November 6, 1986, and to update these forms as necessary, E-Verify had been voluntary, except where state or local law required it. The new clause requires that in addition to completing Form I-9 to verify employment eligibility, the employer must 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, through the E-Verify System.

Importantly, the clause also requires employers to use E-Verify to confirm the work authorization of employees directly performing work in the United States under federal contracts, even if they are not “new hires.” In other words, if the employer hired the employee after November 6, 1986, and the employee is directly performing work in the United States under a federal contract, the employer must use E-Verify to confirm the work authorization of that employee. Employees with certain security clearances or credentials issued pursuant to Homeland Security Presidential Directive (HSPD)-12 are exempt from verification requirements.

The clause will be inserted into federal contracts “that are above the simplified acquisition threshold [of $100,000] and have a performance period of at least 120 days,” unless the federal contract is for commercially available off-the-shelf (COTS) items, even if those items had minor modifications. Prime contractors are required to include the clause in subcontracts over $3,000 for services or for construction. Institutions of higher education, state and local governments, federally recognized Indian tribes, and certain sureties will be required to use E-Verify only for those employees assigned to the covered federal contract.

Existing indefinite-delivery/indefinite-quantity federal contracts will be amended to insert the E-Verify clause if there are at least six months remaining for performance under the federal contract after the January 15, 2009, effective date of the rule. The head of the contracting activity may waive E-Verify requirements under exceptional circumstances. The official notice of the Final Rule is contained in three separate documents in the Federal Register, and can be found at Volume 73 of the Federal Register, 67650-67706 (November 14, 2008) (Part 1, Part 2, Part 3).

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 to the right.