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The E-Verify Program Is Now Mandatory For Certain Government Contractors

The E-Verify program, which has been in existence for many years and is used to verify the employment authorization of new employees, is now a required part of the employment system for certain federal government contractors. As of Tuesday, September 8, 2009, the regulations implementing that policy went into effect. However, as noted below, that does not mean that covered government contractors are required to immediately sign up for or start using  E-Verify.

The original effective date of the regulation was January 15th. It was extended, at the request of the federal government, to January 19th, then February 20th, and finally to September 8th. A lawsuit by the Chamber of Commerce of the United States seeking to invalidate the regulations was dismissed by the U.S. District Court for the District of Maryland on Friday, September 4, 2009. That decision was immediately appealed to the U.S. Court of Appeals for the Fourth Circuit. The appeal was denied on September 9, 2009.

The highlights of the new regulations are as follows:

What Contracts are Covered?:  The regulation requires the use of the E-Verify clause for prime federal contracts with a period of performance longer than 120 days and a value above the simplified acquisition threshold, which is currently $100,000, and to indefinite delivery or quantity contracts which extend at least six months after September 8, 2009, where the amount of work or orders remaining is “substantial.” It also would apply to subcontracts for services or for construction with a value of over $3,000. Specific exemptions exist for certain contracts such as those for commercially available off-the-shelf items.

Which Employees are Covered?:  The clause would apply to employees hired after November 6, 1986, working in the U.S. Employees who have certain federal agency and U.S. government security clearances may not be subject to the program. It would require the use of E-Verify for all newly hired employees, regardless of whether they perform any work on a government contract, and those present employees who are assigned to work on the government contract.

Effective Date:  As noted above, the E-Verify system has been extended to cover solicitations issued and contracts awarded after September 8, 2009, or to contractors who presently are a party to an ongoing indefinite delivery or indefinite quantity contract which extends at least six months beyond September 8, 2009. Those new contracts will include a clause committing government contractors to use the E-Verify system. The existing “indefinite” contracts will be amended to include the E-Verify clause.

When Will Federal Contractors Be Required to Enroll in E-Verify?:  Companies awarded a federal contract that qualifies will have 30 days from the awarding of the contract to enroll in the system and must commence verification of newly hired employees and current employees who are assigned to work on the contract within 90 days after enrollment.

  • If the employer chooses to use E-Verify for its entire present workforce, rather than only those employees assigned to the contact, it will have an additional 90 days (a total of 180 days from the date of enrollment) to initiate the verification process.
  • Pursuant to the requirements of E-Verify, all new employees must be verified within three (3) business days after the date of hire.
  • An employer who has been enrolled as a federal contractor in E-Verify for 90 days or more must initiate verification of all new hires immediately, whether or not they are assigned to the contract, but will have 90 days to begin verifying existing employees who are assigned to the contract. However, where the federal contractor has been enrolled in E-Verify for less than 90 days, they must initiate verification of all new hires within 90 days after their enrollment in E-Verify. Each employee subsequently assigned to the contract must be verified within 90 days after the date of the contract award or within 30 days after the assignment to the contract, whichever date is later.

Partial Exemptions:  Certain entities, such as institutions of higher learning and state and local governments, may choose to use E-Verify only on those new and existing employees who are assigned to the covered federal contract, and opt out of E-Verify for all other new hires.

Mandatory v. the Voluntary E-Verify:  Note:  the voluntary E-Verify program which has been in existence for many years can only be used for new hires.  Only under the mandatory federal contractor program may E-Verify be used for any existing employees. Employers can enroll in the voluntary program at any time.

An employer registered in the voluntary E-Verify program will be able to update its company profile on the E-Verify site and take steps to sign a new Memorandum of Understanding and participate in the new, mandatory, government contractor version.

A caveat about E-Verify:  Those employers who are currently registered in E-Verify are aware of the fact that it cannot detect “identity theft.” In other words, the system will notify the employer whether the employee’s name matches the social security or Department of Homeland Security records, but will not tell the employer how many other individuals are using that same name and number.