After several delays in the effective date of the E-Verify rule and unsuccessful litigation to stop the rule, the E-Verify clause will now become one of many familiar Government contract clauses that will require contractor compliance. E-Verify is a free web-based program operated by the Department of Homeland Security (DHS) with the Social Security Administration that compares information from the employment eligibility verification form (I-9) against Government databases to verify employment eligibility. You can expect to see the E-Verify clause in most new Government contracts. Contractors will have 30 days after contract award to enroll in E-Verify and sign a Memorandum of Understanding with DHS.

On September 8, DHS issued two useful documents for federal contractors who will be required to use E-Verify: (1) E-Verify User Manual and (2) E-Verify Supplemental Guide for Federal Contractors. The User Manual is a comprehensive 68-page document that provides step-by-step instructions with screen shots on how to use the system. The Supplemental Guide provides guidance on verifying new and existing employees, timelines for enrollment and verifying employees, types of qualifying contracts and exemptions and applicability to subcontractors. There are some nuances in the guidance document in implementation of the E-Verify rule that will require coordination between company human resources and contract administration officials. For example, E-Verify participants are subject to additional I-9 requirements for photo identification documents and Social Security Numbers that did not previously apply to I-9 forms.

The path cleared for full implementation of the rule on September 4, 2009, when a Maryland district court denied a business coalition led by the U.S. Chamber of Commerce an emergency injunction to prevent the rule from taking effect. The U.S. Chamber group had sued the Government alleging among other things that the Government lacked authority to require federal contractors to use the DHS E-Verify system for new hires and existing employees. On August 26, the court granted the Government's motion for summary judgment on all counts. The U.S. Chamber is continuing a lobbying effort to have the rule amended to require federal contractors to verify only new employees as opposed to both new and existing employees. Any such legislatively mandated change to the rule would likely be attached to the FY 2010 DHS appropriations bill. The DHS appropriations bill will still be the likely legislative vehicle for such a change, but this is not likely to happen until early November. Congress did not pass any appropriations bills before the end of the fiscal year on September 30, but Congress did pass a continuing resolution to fund agencies through October 31, 2009. Congress will also have to consider re-authorizing the E-Verify program itself when it turns back to the DHS appropriations bill because E-Verify authorization expires October 30, 2009. Currently, the House version of the DHS appropriations bill would extend E-Verify for two years while the Senate version would reauthorize it permanently.