The U.S. Chamber of Commerce has announced that the implementation of the regulation that would require certain federal contractors to participate in the E-Verify electronic employment verification program has been postponed once again. The original effective date for the implementation of the rule was scheduled for January 15, 2009. The effective date was then extended to February 20, 2009 by the U.S. Department of Justice. The most recent postponement will now delay implementation of the regulation until May 21, 2009.

The postponement of the rule comes as a result of a memorandum issued by President Barack Obama's office stating that executive departments and agencies should consider extending the effective date of regulations that have been published in the Federal Register but have not yet taken effect. In response to the U.S. Chamber of Commerce's request that the memorandum be applied to the E-Verify regulation, the federal government agreed to suspend implementation of the regulation to allow the new administration an opportunity to review the rule.

E-Verify is an electronic system administered by the Department of Homeland Security ("DHS") with the Social Security Administration ("SSA") to help employers determine employment eligibility of new hires and the validity of their Social Security numbers.

The E-Verify Program was originally scheduled to expire on November 1, 2008. However, President Bush recently signed a year-end spending bill (H.R. 2638) that includes funding for the extension of the E-Verify Program. The program has now been extended to March 6, 2009.

Under the current agreement, federal contractors will not be required to use E-Verify for any federal contract awarded prior to May 21, 2009. However, if the rule were to be implemented, the regulation would require federal contractors and subcontractors to use the DHS and SSA E-Verify system to verify their employees' eligibility to work in the United States. Specifically, federal contracts and solicitations would be required to include a clause requiring federal contractors to use E-Verify. Prime contractors would also be required to include a clause requiring certain subcontractors to use E-Verify as well.

Federal contractors subject to this requirement would be required to enroll in E-Verify and use the system for all persons hired during the term of the contract (all new hires) and all existing employees assigned to the contract, other than employees hired before November 6, 1986. This requirement is in addition to the "normal" requirement placed on all employers within the United States to complete Form I-9, Employment Eligibility Verification, for all newly-hired employees.

There are three exceptions in which federal contractors are not required to use E-Verify. In these cases, the subcontractor working for the federal contractor would also be exempt from the E-Verify requirement. The three federal contractor exceptions are:

  1. Prime contracts for less than $100,000;
  2. Contracts for commercially available off-the-shelf (COTS) items, which includes nearly all food and agricultural products; and
  3. Contracts less than 120 days in duration.  

For more information regarding compliance concerns relating to E-Verify, please see

http://www.dykema.com/publications/docs/workplaceimmig.pdf.