What is E-Verify?  

E-Verify is an internet-based authorization system operated by the Department of Homeland Security (DHS) and the Social Security Administration (SSA). Employers run employee I-9 data against these federal agencies’ databases in an attempt to determine if the employee is authorized to work in the United States. To participate in E-Verify, an employer must execute a Memo of Understanding (MOU), register, designate a responsible officer, initiate training and then maintain operation of E-Verify at each designated hiring site. Federal contractors will also be required to complete a special tutorial.  

Federal Contractors  

New regulations will require that most federal contractors sign-up for and use E-Verify. Effective January 15, 2009, contractors should assume that all government solicitations and contracts will include the requirement that the contractor be enrolled in, within 30 days of the award of the contract, the E-Verify program. In addition, the contract will require that all subcontractors (any supplier, distributor, vendor or firm that furnishes supplies or services to a prime contractor or another contractor) also use E-Verify. Existing indefinite contracts will be amended to include this provision.  

The threshold for the prime contractor is any contract for construction or any contract for a value of $100,000. For subcontractors, contracts over $3,000 for services or construction must include this requirement. This requirement includes federal work performed in the United States, including Guam, D.C., Puerto Rico and the U.S. Virgin Islands. The only exceptions to the above are those contracts for a performance period of less than 120 days, or those that are for commercially available items that are sold off the shelf (COTS). E-Verify Enrollment and Application to Workers Following, if awarded a contract, contractors who are not yet signed up for E-Verify must agree to the following:  

  1. They must enroll in E-Verify within 30 days of the award of the contract; and
  1. Within 90 calendar days of enrollment, they must use E-Verify for all new hires in the United States.

In addition, within 90 calendar days of enrollment, contractors must E-Verify all existing employees who are “assigned to the contract.”  

Those contractors who have been enrolled in E-Verify for less than 90 days must enroll all new hires and all existing employees assigned to the contract within 90 calendar days after enrollment.  

Finally, all contractors that have been enrolled for 90 calendar days or more must process all new hires within three business days of hire (as per the E-Verify rule). Also, all existing employees who are assigned to the contract must be processed within these 90 days.  

Going forward, once the 90 days have passed, all existing employees that have been newly assigned to the contract must be run through E-Verify within 30 days of the assignment.  

There are some exceptions to the rule requiring E-Verify for all future hires. Federal contractors that are institutions of higher education, state and local governments, the government of a federally recognized Indian tribe, or a surety bond under a takeover agreement entered into the federal agency pursuant to a performance bond are not required to run all new hires through E-Verify. Assigned employees, however, are required to be run through E-Verify within 30 days of the assignment.  

These regulations also offer the contractor the “option” to verify the employment eligibility of all existing employees, rather than those assigned to the contract. There is some concern as to whether or not this provision will lead to litigation, since the statute barred such actions. Therefore, this option should be addressed before being undertaken.  

As noted, E-Verify is required for existing employees who are “assigned to the contract.” To whom does this apply? The definition is as follows: “any employee in the United States who directly performs substantial duties related to the contract.” This definition does not include employees who provide support work, overhead functions, indirect work, etc. Indeed, this definition is a bit gray and, in keeping with this administration’s goal that more—rather than fewer—employees be run through E-Verify, the vagueness may be a purposeful attempt to have employers run all existing employees through E-Verify, instead of just those directly assigned to the contract. We will keep you informed with regard to that provision as well.  


E-Verify must be used for the period of performance under the contract. After termination of the contract, the MOU can be terminated, should a contractor so desire, or the registration must be amended and new hires can no longer be run through E-Verify. An employer or contractor that fails to properly make use of the E-Verify program could ultimately be suspended or disbarred from E-Verify which, under these regulations, would result in the loss of the ability to contract with the federal government. However, there are provisions under the E-Verify program that allow for possible re-enrollment at a future time.