On Wednesday Aug. 26, 2009, the U.S. District Court for the District of Maryland issued its much anticipated decision in Chamber of Commerce of the United States of America v. Janet Napolitano, No. 8:08-cv-03444-AW (D. Md. Aug. 26, 2009), upholding the legality of Executive Order 13464 and its implementing regulation, which require many federal contractors and subcontractors to use E-Verify. Unless delayed for public policy concerns, the rule will take effect on Sept. 8, 2009.

E-Verify, administered by the Department of Homeland Security (DHS), is the federal government’s internet-based system by which employers may check the eligibility of newly hired employees. The Illegal Immigration Reform and Immigrant Responsibility Act (IIRIRA), which provides the statutory basis for E-Verify, made the system voluntary. But, that’s about to change for many federal contractors.

On June 6, 2008, President Bush amended Executive Order 12989 to require government contractors to agree to use E-Verify to confirm employment eligibility of their workforce. On Nov. 14, 2008, the Department of Defense (DOD), the General Services Administration (GSA) and the National Aeronautics and Space Administration (NASA) – the agencies responsible for maintaining the Federal Acquisition Regulations (FAR) – amended the FAR to implement Bush’s amended executive order. The amended FAR requires, with certain narrow exceptions, the use of E-Verify by all federal contractors and many subcontractors to confirm the work authorization of all new hires and existing employees assigned to work on covered federal contracts. The rule also contains a provision allowing for the verification of all employees, so contractors can avoid the costs and uncertainty of tracking who is assigned to federal contracts.

On Dec. 23, 2008, the Chamber, SHRM and other organizations filed a lawsuit challenging the executive order and the subsequent FAR changes implementing the order. The plaintiffs argued, in part, that the executive order and FAR are unconstitutional because they compel employers to participate in E-Verify when IIRIRA made E-Verify voluntary. The implementation of the amended FAR had been delayed several times because of this litigation. On August 26, however, the court rejected the plaintiffs’ arguments and granted the government’s motion for summary judgment, which will allow the amended FAR to be implemented on Sept. 8, 2009.

In preparation for implementation of and compliance with the amended FAR, companies should analyze their federal contracts to determine which agreements, if any, will require the use of E-Verify. Federal contractors likely covered by the amended FAR should begin familiarizing themselves with the E-Verify procedures and requirements. Information about E-Verify can be found at www.dhs.gov/e-verify. Prudent employers will also implement a complete immigration compliance program, which includes (i) preparing an immigration compliance policy, (ii) implementing I-9 verification and no-match letter procedures, (iii) training employees responsible for the I-9 process, and (iv) auditing existing I-9s.