Since September 8, 2009, the U.S. government must include a clause in certain federal contracts that requires the contractor signatory to use the E-Verify system. E-Verify is an online system that allows an employer to instantly verify the employment eligibility of its workers. The employer enters the information provided by an employee on the Form I-9 and the E-Verify system compares that information to databases maintained by the Social Security Administration and the U.S. Department of Homeland Security.

Within 30 days of signing a contract containing the E-Verify clause, the federal contractor is required to enroll in the E-Verify system. Enrollment requires that the contractor/employer execute a Memorandum of Understanding (MOU) prepared by the Department of Homeland Security (the DHS). The MOU commits the employer to certain obligations as conditions of E-Verify enrollment. For example, while the government may inspect and audit all U.S. employers’ I-9 files under IRCA (the I-9 Form’s governing statute), the government generally can inspect E-Verify employers with less notice than it can other U.S. employers. Within 90 days of enrollment, the federal contractor must begin E-Verifying all new hires and must complete the E-Verification of existing employees assigned to the contract containing the E-Verify clause. Alternatively, the federal contractor may elect to E-Verify its entire existing workforce—if it elects to do so, such E-Verification must be done within 180 days.

While the deadlines for enrollment and implementation are clear, employers are finding the other E-Verify rules that govern federal contractors to be less than simple. For example, determining who is "assigned to" the qualifying contract, and therefore must be E-Verified, may not be obvious. Also, employers using the E-Verify system must obtain more information from their employees on the Form I-9 than must other employers—for example, the employee must provide a social security number or E-Verification cannot be completed for the employee and the employer risks violating the law. Also, in many instances, the subcontractor to a contract including the E-Verify clause is also required to use E-Verify and to comply with the requirements that govern federal contractors.

Some organizations who receive a contract containing the E-Verify clause may actually be exempt from using E-Verify. This exemption includes state and local governments, institutions of higher learning, and recognized Native American tribes.