On June 6, 2008, President Bush signed an amendment to Executive Order 12989 requiring certain federal contractors to participate in the E-Verify system, the Department of Homeland Security’s electronic system for verifying the employment eligibility of workers. As discussed in our previous Legal Alert entitled “Executive Order Requires Federal Contractors to Verify Employment Eligibilty Electronically” , the amended Executive Order requires federal executive-branch departments and agencies to include in contracts for the procurement of goods or services a provision requiring contractors to use E-Verify to confirm the employment eligibility of (i) all persons hired by the contractor to perform work in the United States during the contract term and (ii) all persons assigned by the contractor to perform work under the contract in the United States.

To implement the new requirements of Executive Order 12989, the Federal Acquisitions Regulatory Councils issued proposed regulations directing federal executive agencies to include language about the use of E-Verify in certain federal procurement contracts, and these regulations were originally scheduled to take effect on January 30, 2009. That effective date was subsequently postponed to May 21, 2009.

On April 17, 2009, the Federal Acquisitions Regulatory Councils announced a further delay in the effective date of the E-Verify requirement for federal contractors to permit the new Administration an adequate opportunity to review the rule, whose validity has already been challenged in a pending federal lawsuit. Under this latest revision, federal executive agencies will not be authorized to include the E-Verify requirement in contracts for the procurement of goods or services prior to June 30, 2009. Companies that provide goods or services to federal agencies or that contemplate entering into federal procurement contracts in the near future should take advantage of the postponed effective date to familiarize themselves with the E-Verify system if they are not currently participating in it and to make appropriate administrative preparations for the use of the E-Verify system once the regulations implementing Executive Order 12989 become effective.