Federal Contractors Required To Use E-Verify

August 31, 2009

After four postponements dating back to January 2009, the E-Verify federal contractor rule will become effective on September 8, 2009. Beginning on this date, federal contractors and subcontractors will be required to use the E-Verify system to confirm that all new and existing employees directly performing work under federal contracts are authorized to work in the United States.

According to the final rule, federal contracts awarded and solicitations issued after September 8, 2009 must include a clause committing federal contractors to use E-Verify. The same clause will also be required in subcontracts over $3,000 for services or construction. Federal contractors are responsible for their subcontractors' verification obligations. It is estimated that the rule will affect more than 168,000 contractors and subcontractors.

E-Verify is an electronic employment verification system offered by the Department of Homeland Security (DHS). The web-based system verifies the eligibility of individuals to work in the United States by comparing information electronically from Form I-9 (the employee eligibility document used for new hires) against more than 425 million records in the Social Security Administration's database and, for noncitizens, against more than 60 million records in the DHS immigration database.

The rule exempts certain federal contracts:

Contracts that include only commercially available off-the-shelf items. Nearly all food and agricultural products fall within the definition of "commercially available off-the-shelf" (COTS) items.

Contracts for less than $100,000.

Contracts less than 120 days.

Contracts where all the work is performed outside the United States.

Federal contractors are required to enroll in E-Verify within 30 days of when they are awarded a federal contract or subcontract that requires participation in E-Verify. The rule requires federal contractors participating in E-Verify for the first time 90 calendar days from enrollment to begin using the system for verifying new employees. After this 90-day phase-in period, the contractor will be required to initiate verification of each newly hired employee within three business days after their start date. To meet the three-day requirement, employers may initiate verification of a newly hired employee before their start date if the employee has accepted the job offer and filled out the Form I-9. E-Verify is not to be used to pre-screen job applicants; the system may be used for new hires only after the individual has been offered the job and has accepted. Also, it should be noted that the use of E-Verify does not replace the employer's Form I-9 obligations.

The rule provides a longer period (30 calendar days) after the initial enrollment period for contractors 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.

E-Verify is a free service that is also available to private employers on a voluntary basis. Federal Contractors are urged to comply with these new requirements. You may contact SESCO for assistance in not complying with the new E-Verify requirements but all OFCCP, Affirmative Action compliance requirements.