On July 8, the DHS announced it was moving forward with full implementation of the Bush Administration rule that in order to be awarded a government contract, a company must use the E-Verify program to verify the employment authorization of its employees. Under this final rule, E-Verify will be required of all federal contractors, regardless of size, holding a contract with a period of performance longer than 120 days and a value above $10,000. Subcontractors who provide services or construction with a value of more than $3,000 will also be required to use E-Verify. The E-Verify requirement will apply to federal contractors and subcontractors that receive American Recovery Reinvestment Act funds as well.

At the same time, however, DHS announced it will rescind the controversial “No-Match” regulation it initially proposed in 2007. That regulation was blocked by court order shortly after it was proposed and as a result has never formally been implemented. In announcing its decision to drop this so-called “safe harbor” regulation, DHS reasoned that “E-Verify addresses data inaccuracies that can result in no-match letters in a more timely manner and provides a more robust tool for identifying unauthorized individuals and combating illegal employment.”

Meanwhile, the U.S. Senate has also joined the debate and taken up the issues of E-Verify and the No-Match rule. Amendments were approved on July 8, as part of the 2010 Homeland Security appropriations bill, that would make the voluntary E-Verify program permanent and, consistent with the DHS announcement, would mandate its use by federal contractors. Another amendment was approved on July 9, however, that would prohibit using funds from the bill to rescind the No- Match rule. If ultimately passed, this measure could effectively block DHS’ rescission of the proposed rule. Some Senators complained that abandoning the No-Match rule is inconsistent with and a step backward from the new DHS enforcement policy, and insisted that American employers are entitled to this regulatory guidance on how to properly handle the receipt of a nomatch letter.

An amendment was also introduced that would allow employers to use EVerify for all its employees, not just for new hires. There is some uncertainty, however, whether this amendment will be retained, as it may be deemed appropriate for an appropriations bill.