The E-verify applicability date for covered federal government contractors has been further extended from February 20, 2009, to May 21, 2009. On January 9, litigants in the legal challenge to the regulations mandating use of the E-verify system for certain federal government contractors agreed to suspend applicability of the rule from its original implementation date of January 15, 2009, to February 20, 2009. On January 27, 2009, the litigants agreed to further extend the applicability date to May 21, 2009, and have asked the court to stay the proceeding to provide President Obama's administration time to review the regulation.

Under the new applicability date, which appeared in the January 30, 2009, Federal Register, any contracts entered into or modified prior to May 21, 2009, would not contain the contract clauses requiring the use of E-verify.

How the Mandate Became Law

On June 6, 2008, President George W. Bush issued an amendment to Executive Order 12989, which required certain governmental departments and agencies to require federal contractors to agree to use an electronic employment eligibility verification system (commonly referred to as E-Verify). E-Verify is the Web based system operated by USCIS in partnership with the Social Security Administration that allows participating employers to electronically verify the employment eligibility of newly hired employees. The amendment to Executive Order 12989 required federal contractors to not only verify employment eligibility of individuals hired during the contract term, but also to verify the employment eligibility of current employees assigned to perform work on the contract within the United States. A proposed rule to amend the Federal Acquisition Regulation (FAR) was published in the Federal Register on June 12, 2008. Following a 60-day public comment period that ended on August 11, 2008, the Civil Agency Acquisition Council and the Defense Acquisition Regulations Council considered more than 1,600 comments before finalizing the regulation.

How the Regulation Will Impact Your Business

The most significant provisions of the new regulation are:

  • Federal contracts and solicitations issued on or after May 21, 2009, will include a clause requiring federal contractors to use E-Verify.
  • Contractors must include a clause requiring subcontractors to use E-Verify for subcontracts of more than $3,000 for services or construction.
  • The following contracts are exempt and need not comply with the E-Verify requirements:
    • Contracts for commercially available off-the-shelf (COTS) items. COTS items include most food and agricultural products;
    • Contracts less than 120 days in duration, and;
    • Contracts for less than $100,000.
  • Non-exempt contractors must enroll in E-Verify and use the system for all individuals hired during the term of the contract as well as all existing employees assigned to the contract (except for employees hired before November 6, 1986).
  • Contractors must enroll in E-verify within 30 days of entering into the federal contractor or subcontract and must begin to verify employment eligibility using E-verify within 90 days from the date of enrollment.
  • Use of E-verify does not exempt a contractor from completing a Form I-9 for all newly hired employees.