E-Verify is a free internet-based program operated by the U.S. Department of Homeland Security, U.S. Citizenship and Immigration Services ("CIS") to allow employers to verify the employment eligibility of new hires. Until recently this had been a voluntary program. However, a new regulation went into effect on September 8th, which now requires that all Federal contracts awarded and solicitations issued after that date must include a clause mandating use of E-Verify for all employees hired during the contract period, and those employees who will perform work under the given contract. Employers are not required to use E-Verify with employees who perform support work on the contract, such as indirect or overhead functions. Institutions of higher education, state and local governments, and governments of federally recognized Native American tribes need only verify employees assigned to a covered federal contract (and not all newly hired employees, as is the case for all other Federal contractors).

This new requirement is of specific interest to health care providers and pharmaceutical and medical device manufacturers who have a Federal government contract containing the E-Verify clause, which requires the usage E-Verify with employees working on the Federal contract. Those providers will be required to use E-Verify with all new employees and with any employees assigned to work on the Federal contract. An important exception exists for health care providers only having an agreement with Medicare to provide patient services. In those situations the usage of E-Verify is not required. A provider will only be required to use E-Verify with employees assigned to a Federal contract when there is a separate contract with a Federal agency to provide specific health care items (i.e. pharmaceuticals or devices) or specific services delivered through a Government-sponsored health plan. In addition, Medicare administrative contractors and fiscal intermediaries will also be required to use the E-Verify System.