Private employers contracting with the federal government – and perhaps many of their subcontractors – soon will be required to use the United States Citizenship and Immigration Service's ("USCIS") electronic verification system ("E-Verify") to confirm employment eligibility of their workforces. These new requirements could impose a significant burden on covered employers not only to use the federal program to verify employment eligibility of new hires and certain existing employees, but also to implement the program's required procedures when an employee's eligibility turns out "nonconfirmed."
The E-Verify Program
E-Verify is an online system that checks an employee's I-9 information against the information contained in the USCIS's and Social Security Administration's ("SSA") databases. Within seconds of entering the I-9 information, the employer receives notice that either the information matches the USCIS and SSA records or not. If the employer receives a no-match notice (or a "tentative nonconfirmation" notice), it must then follow specific procedures required by the program, which include notifying the employee of the notice, providing written instructions to employees, allowing employees to contest the notice, and refraining from taking adverse action if an employee contests the notice. Additionally, when an employee contests a tentative nonconfirmation notice based on a photographic non-match, the employer is required to take affirmative steps to contact the Department of Homeland Security ("DHS") with information necessary to resolve the challenge. If an employee does not contest a tentative nonconfirmation, or if the discrepancy in records could not be resolved, the employer will receive a "final nonconfirmation" notice and the employee must then be terminated.
Amendment to Executive Order 12989
Under the auspices of promoting economy and efficiency in federal procurement, President Bush signed on June 6, 2008 an amendment to Executive Order 12989 ("Amendment"), requiring federal contractors to use E-Verify. Specifically, the Amendment provides that federal agencies must, as a condition of their contracts, use this program to verify employment eligibility of all persons assigned to work on the federal contract and anyone else hired to work on it during the contract term. The Amendment provides that the E-Verify requirement would be implemented through subsequent rule-making by the executive branch.
The Proposed Rules to Implement the Order
On June 12, 2008, the Federal Acquisition Regulation Council ("FAR Council") issued proposed rules that will, once finalized, implement the Amendment's E-Verify requirements. Under the proposed rules, federal contracting agencies must include a requirement in their contracts that the contractor-employer will enroll in the E-Verify program within 30 days of getting the federal contract, and use the program within 30 days thereafter to verify the employment eligibility of those employees assigned to the contract at the time of enrollment. Following this initial period, the contract would also require contractor-employers to use E-Verify for all new hires and all existing employees newly assigned to the contract within three days of their date of hire or assignment. The federal contracts would further require contractors to impose these same requirements on any subcontracts over $3,000 that are for services or construction. The E-Verify requirements do not apply to employees hired before November 6, 1986 or those working outside the United States, or to certain contracts (like those for commercially available off-the-shelf items) or in certain "exceptional cases."
Whether the FAR Council's proposed rules will be adopted as written remains to be seen. Comments to the proposed rules are due by August 11, 2008. The E-Verify requirements will go into effect once these proposed rules, amended or not, are finalized.
Illinois Law Prohibits Using E-Verify
E-Verify has been controversial, drawing opposition from several labor advocacy groups and others for having inaccuracies in the system and thus, incorrectly denying eligible workers employment. Illinois recently passed legislation prohibiting employers from using the program because of its inaccuracies. While the State is not currently enforcing this prohibition (because DHS is now pursuing litigation to challenge this legislation), certain components of this law relating to the use of E-Verify still are in effect (e.g., a posting requirement). Illinois employers who use this system (either voluntarily or pursuant to a federal contract requirement) will need to comply with these provisions.
Once the FAR Council's rules are finalized, federal contractor employers will be contractually required to use the E-Verify program pursuant to their contracts with the federal government. The proposed rules require contracting employers to move swiftly to start implementing their use of E-Verify, and the program itself provides virtually immediate results of any nonconfirmations. Thus, contracting employers will soon need to establish a plan to implement E-Verify that covers: (1) a determination of which employees will need to be E-Verified under the final rules; (2) the appropriate notification and related procedures when the system issues a tentative nonconfirmation notice; (3) a protocol for terminations pursuant to final nonconfirmation notices; and (4) compliance with Illinois' E-Verify law.