Recent discussions indicate that the regulations implementing the Executive Order requiring federal contractors to use E-Verify may be finalized in the near future. This would be a significant development as the government estimates that approximately 168,000 contractors and subcontractors will be required to enroll in E-Verify as a result of this rule.

The Executive Order, which was signed by President George W. Bush on June 6, requires all federal agencies and departments that enter into contracts to require, as a condition of each contract, that the contractor agree to use an electronic employment eligibility verification system (E-Verify). This applies to: (1) all persons hired during the contract term by the contractor to perform employment duties within the United States; and (2) all persons assigned by the contractor to perform work within the United States on the federal contract.

The June 6 order amends Executive Order 12989 (issued in 1996) to "promote economy and efficiency in Federal Government procurement." According to the amended Executive Order, "contractors that employ illegal aliens cannot rely on the continuing availability and service of those illegal workers, and will inevitably have a less stable and less dependable workforce."

In the absence of a federal mandate, several states have passed laws requiring certain employers to use E-Verify. Still a "pilot" program, E-Verify was temporarily extended to March 6, 2009, by the passage of the "Consolidated Security, Disaster Assistance, and Continuing Appropriations Act" on September 30. Currently, there are approximately 80,000 employers enrolled in the program. Thus, the federal contractor regulation will likely triple E-Verify enrollment. Ogletree Deakins will provide an update as soon as the regulations have been finalized.