In December, we alerted you to an impending change in the Federal Acquisition Regulations ("FAR") that would require many federal contractors and subcontractors to begin to use the federal government's E-Verify system to confirm the employment eligibility of new hires and any current employees working on a covered federal contract. The U.S. Chamber of Commerce filed suit seeking to enjoin these changes to FAR, arguing that in earlier legislation -- principally the Illegal Immigration Reform and Immigrant Responsibility Act -- Congress precluded mandatory use of E-Verify and, thus, the agencies promulgating this new requirement had exceeded their legal rulemaking authority.

While expressing confidence that the E-Verify requirement will be upheld, the Department of Homeland Security has agreed to delay the effective date of this requirement from January 15, 2009, to February 20, 2009, to give the parties a chance to present their arguments to the court. The Chamber has expressed some hope that the new administration will use this period of delay to reconsider the E-Verify requirement.

This delay coincidentally follows a report from the Ombudsman of the Department of Homeland Security's Citizenship and and Immigration Service, noting recent improvements to the E-Verify system, but recommending further steps to make the system more transparent and user-friendly before mandating use by employers nationwide. Among other things, the Ombudsman's report recommended simplifying the language used in E-Verify instructions and results; making more E-Verify documentation available on the Internet; upgrading E-Verify to prompt and remind employers of the steps to resolve tentative nonconfirmations; and ultimately using E-Verify to replace the I-9 process entirely.

Nothing about the foregoing prevents an employer from voluntarily enrolling in the E-Verify system; however, it is important to note that such voluntary enrollment only entitles an employer to conduct an E-Verify check on new hires. Even under the proposed changes to FAR, employers are not entitled to use E-Verify with current employees unless or until the employer enters into a new federal contract (or modifies an existing contract) that expressly requires the employer to utilize E-Verify with respect to current employees.

That, of course, assumes the new E-Verify regulations eventually do come into effect. We will continue to keep you posted.