Effective January 15, 2009, many federal contractors and subcontractors will be required to begin using the U.S. Citizenship and Immigration Services (USCIS) to verify if their employees are eligible to legally work in the United States. The final rule detailing the requirement was published November 14, 2008, in the Federal Register.

How the Mandate Became Law

On June 6, 2008, President George W. Bush issued an amendment to Executive Order 12989, which required certain governmental departments and agencies to require federal contractors to agree to use an electronic employment eligibility verification system (commonly referred to as E-Verify). E-Verify is the Web-based system operated by USCIS in partnership with the Social Security Administration that allows participating employers to electronically verify the employment eligibility of newly hired employees. The amendment to Executive Order 12989 required federal contractors to not only verify employment eligibility of individuals hired during the contract term, but also to verify the employment eligibility of current employees assigned to perform work on the contract within the United States. A proposed rule to amend the Federal Acquisition Regulation (FAR) was published in the Federal Register on June 12. Following a 60-day public comment period that ended on August 11, the Civil Agency Acquisition Council and the Defense Acquisition Regulations Council considered over 1,600 comments before finalizing the regulation.

How the Regulation Will Impact Your Business

The most significant provisions of the new regulation are:

Federal contracts and solicitations issued on or after January 15, 2009, will include a clause requiring federal contractors to use E-Verify.

Contractors must include a clause requiring subcontractors to use E-Verify for subcontracts of more than $3,000 for services or construction.

The following contracts are exempt and need not comply with the E-Verify requirements:

  • Contracts for commercially available off-the-shelf (COTS) items. COTS items include most food and agricultural products;
  • Contracts less than 120 days in duration; and
  • Contracts for less than $100,000.

Non-exempt contractors must enroll in E-Verify and use the system for all individuals hired during the term of the contract as well as all existing employees assigned to the contract (except for employees hired before November 6, 1986).

Contractors must enroll in E-verify within 30 days of entering into the federal contractor or subcontract and must begin to verify employment eligibility using E-verify within 90 days from the date of enrollment.

Use of E-verify does not exempt a contractor from completing a Form I-9 for all newly hired employees.