Federal Contractors Will be Required to Use E-Verify
July 6, 2008
by Employment & Labor Law / Employee Benefits Group
Stinson Morrison Hecker LLP
Copyright © 2008
Nearly all federal contractors and subcontractors will be required to use the U.S. Department of Homeland Security’s (DHS) electronic employment eligibility verification (E-Verify) system as a condition of their government contracts, under a sweeping new Executive Order signed by President Bush on June 9, 2008 and a proposed Federal Acquisition Regulation issued on June 12, 2008.
E-Verify Program – The E-Verify program (formerly known as Basic Pilot) is a web-based system that electronically verifies the employment eligibility of newly hired employees. The system verifies an employee’s name, social security number, date of birth, and immigration status through Social Security Administration (SSA) and DHS databases.
New Requirements – The proposed regulation would require the insertion of a clause in most federal contracts requiring the contractor to: (1) enroll in the E-Verify program within 30 days of contract award; (2) begin verifying the employment eligibility of all new employees of the contractor or subcontractor that are hired after enrollment in E-Verify, and continue to use the E-Verify program for the life of the contract; and (3) use E-Verify to confirm the employment eligibility of all existing employees who are directly engaged in the performance of work under the covered contract.
Covered Contracts – The proposed regulation would require the insertion of the E-Verify requirements in all prime contracts that include work in the United States except those that: (1) are less than $3,000; or (2) are for commercially available off-the-shelf items.
Subcontractor Flow Down – The proposed regulation would require a covered prime contractor to "flow down" the E-Verify requirement to all subcontracts that are for commercial or noncommercial services or construction.
Exceptions – The proposed regulation does not apply to any employment outside the United States or to any employee hired prior to November 6, 1986 (as such employees are not subject to employment verification under the Immigration and Nationality Act).
Must Enter Into MOU – Before a contractor can participate in the E-Verify program, the contractor must enter into a Memorandum of Understanding (MOU) with DHS and SSA. This MOU requires employers to agree to abide by current legal hiring procedures and to ensure that no employee will be unfairly discriminated against as a result of the E-Verify program.
Significant Difference – The proposed regulation differs in one significant respect from the requirements generally applicable to employers participating in E-Verify; that is, current employees of federal contractors that are assigned to work in the United States on a covered contract, as well as the contractor’s new hires in the United States, must be verified under this rule. The DHS is in the process of revising its MOU to reflect these new requirements.
Time Limits – In the initial contract start-up phase, employees assigned to the contract must be verified within 30 days; thereafter, the proposed regulation requires newly hired and newly assigned employees to be verified within 3 days.
Must Still Complete I-9 Form – Employers participating in E-Verify must still complete an Employment Eligibility Verification Form (Form I-9) for each newly hired employee, as required under current law. Following completion of the Form I-9, the employer must enter the worker’s information into the E-Verify website, and that information is then checked against information contained in SSA and DHS databases.
Effective Date – The E-Verify requirement would be required to be included in covered solicitations issued and contracts awarded after the effective date of any subsequent final regulation. Indefinite delivery and indefinite-quantity contracts would be amended to include the E-Verify requirement if the remaining period of performance exceeds at least 6 months beyond the date of the final rule and the amount of work or orders expected under the remaining performance period is substantial.
Bottom Line - The U.S. General Services Administration estimates that over 168,000 federal government contractors and subcontractors will be required to enroll in E-Verify, and that there will be an additional 3.8 million employees vetted through E-Verify as a result of the new requirement.
Stinson Morrison Hecker LLP is one of the country's largest law firms with more than 360 attorneys in more than 45-industry-focused areas. If you would like more information regarding this summary, please contact one of our Employment & Labor Law and Employee Benefits attorneys.
Law at Work is designed to give general information and is not intended to be a comprehensive summary or to treat exhaustively the subjects and matters covered. The information appearing herein does not constitute legal advice or opinions. Such advice and opinions are provided only upon engagement with respect to specific factual situations. Nothing contained herein shall be considered as an admission in any matter or controversy.
|
Kansas City, MO 1201 Walnut St., Suite 2900 Kansas City, MO 64106 816.842.8600 |
Overland Park, KS 12 Corporate Woods 10975 Benson, Suite 550 Overland Park, KS 66210 913.451.8600 |
St. Louis, MO 168 N. Meramec, 4th Floor St. Louis, MO 63105 314.863.0800 |
Wichita, KS 1625 N. Waterfront Pkwy Wichita, KS 67206 316.265.8800 |
|
Omaha, NE 1299 Farnam St., Suite 1501 Omaha, NE 68102 402.342.1700 |
Phoenix, AZ 1850 N. Central Ave, Suite 2100 Phoenix, AZ 85004 602.279.1600 |
Jefferson City, MO 230 W. McCarty St. Jefferson, City, MO 65101 573.636.6263 |
Washington, D.C. 1150 18th St., N.W., Suite 800 Washington, D.C. 20036 202.785.9100 |
| www.stinson.com | www.lawatwork.com | ||
