Final Rule Requires Federal Contractors to Commit to E-Verify Use

By Ted Olsen

Effective January 15, 2009, new federal procurement regulations will require federal government contractors to expressly commit to use E-Verify to verify that (1) all their new hires and (2) all their existing employees directly performing work on a federal contract are authorized to work in the United States.  (See 73 Federal Register 67651, Nov. 14, 2008.)

E-Verify, formerly known as the Basic Pilot/Employment Eligibility Verification Program, is an Internet-based system operated by the Department of Homeland Security, U.S. Citizenship and Immigration Services, in partnership with the Social Security Administration, that allows participating employers to verify electronically the employment eligibility of their newly hired employees.  Last June, E-Verify was designated by the Secretary of Homeland Security as "the electronic employment eligibility verification system to be used by Federal contractors."  (See 73 Federal Register 33837, Jun. 13, 2008.)

For more details on the federal contracts covered by the final rule and the specified deadlines for employer compliance with the final rule:

The final rule explicitly applies to solicitations issued and contracts awarded after the January 15, 2009 effective date.  Further, under the final rule, federal departments and agencies are to amend — on a bilateral basis — existing indefinite-delivery/indefinite-quantity contracts to include the clause for future orders, if the remaining period of performance extends at least six months after the final rule's effective date.

The E-Verify clause is required in prime contracts above the simplified acquisition threshold of $100,000.  It need not be inserted into prime contracts with performance terms of less than 120 days.

Time frames for newly enrolled contractors.  The final rule permits federal contractors participating in the E-Verify program for the first time 90 calendar days from enrollment in the E-Verify program to begin using the system for new and existing employees.  Also, after this initial enrollment period, a newly enrolled employer shall have 30 calendar days to initiate verification of existing employees who have not previously gone through the E-Verify system when they are newly assigned to a covered federal contract.

Time frames for previously enrolled contractors.  Contractors already enrolled and using the program as federal contractors will have the same extended timeframe (30 days) to initiate verification of employees assigned to the contract, but the time limits will be measured from contract award date (rather than the contractor's E-Verify enrollment date).  With regard to verification of new hires, a contractor that has been enrolled in the program for less than 90 calendar days will have 90 calendar days from the date of enrollment as a federal contractor to initiate verification of new hires.  However, a contractor that has already been enrolled as a federal contractor for 90 calendar days or more will have only three business days from the date of hire to initiate the verification of new hires.

Rules regarding verification of existing employees.  In many instances, there will be debate over whether a specific existing employee is directly performing work under a federal contract, and therefore must be verified through E-Verify.  Under the final rule, the employee is not performing work under a federal contract "if the employee (1) normally performs support work, such as indirect or overhead functions; and (2) does not perform any substantial duties applicable to the contract."

No additional employment verification using E-Verify is required as to any employee (a) whose employment eligibility was previously verified by the contractor through the E-Verify program; (b) with an active U.S. Government security clearance for access to confidential, secret, or top secret information in accordance with the National Industrial Security Program Operating Manual; or (c) who has undergone a completed background investigation and been issued credentials pursuant to Homeland Security Presidential Directive (HSPD-12), Policy for a Common Identification Standard for Federal Employees and Contractors.

A contractor has the option of verifying all of its employees, even those existing employees not currently assigned to a federal contract.  A contractor choosing this option must notify the Department of Homeland Security and must initiate verifications for the contractor's entire workforce within 180 days of such notice.

Requirements and procedures for E-Verify sign-up are at http://www.uscis.gov/portal/site/uscis, the website of the U.S. Citizenship and Immigration Services.  Registration can be initiated at http://www.uscis.gov/portal/site/uscis/menuitem.eb1d4c2a3e5b9ac89243c6a7543f6d1a/?vgnextoid=75bce2e261405110VgnVCM1000004718190aRCRD&vgnextchannel=75bce2e261405110VgnVCM1000004718190aRCRD.

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© 2008 Sherman & Howard L.L.C.                                              December 1, 2008