Alerts and Updates

President Amends Executive Order to Require All Federal Contractors to Use E-Verify System

June 17, 2008

On June 6, 2008, President Bush amended Executive Order 12989 to require all federal contractors, as a condition of any future federal contract, to use the government's controversial Internet-based electronic employment eligibility verification system ("E-Verify") to verify the employment eligibility of their workers. The amendment is the first time the federal government has required private employers to use E-Verify to verify the eligibility of its workers, which until now had been made available to employers on a voluntary basis. Although federal contractors will not be required to use E-Verify until a final rule amending E-Verify regulations goes into effect, which could take several months, employers should begin preparing now for the challenges posed by E-Verify.

E-Verify is the federal government's Internet-based system that allows employers to electronically verify the employment eligibility of newly hired workers. Prior to the issuance of this Executive Order, E-Verify was strictly voluntary for private employers, although eight states require E-Verify enrollment for certain employers. Many employers have been hesitant to use the system, however, and E-Verify has been roundly criticized by business groups, immigrants rights groups and civil liberties advocates for its perceived shortcomings. The more significant concerns include the financial and legal burdens for employers using E-Verify, the potential for employer liability resulting from use of the system, the system's accuracy and reliability, and E-Verify's capability to handle large numbers of employment eligibility inquiries in an efficient manner.

The proposed rule to amend the E-Verify regulations was published in the Federal Register on June 12, 2008. The proposed rule requires, as a condition of nearly all prime contracts entered into with a federal contractor, as well as most subcontracts for services or construction, that the contractor use the E-Verify system designated by the Secretary of Homeland Security to verify the employment eligibility of: (1) workers hired during the contract term; and (2) workers performing work on the federal contract. The latter requirement is notable because it departs from E-Verify's current rules, which allow only employers to use E-Verify to verify the employment eligibility of new hires; the proposed rule expands the use of E-Verify to current employees assigned to perform work within the United States on a federal contract or subcontract. Contractors must enroll in E-Verify within 30 days of the contract award and use the system for the duration of the contract.

As noted above, federal contractors will not be required to use E-Verify until the effective date of the final rule amending the E-Verify regulations. There is an initial 60-day period for public comment on the proposed rule, ending on August 11, 2008. This period will present the only opportunity for the business community to influence these critical changes. Following this comment period, a final rule will be issued and will become effective 30 days after publication.

In the meantime, employers should ensure that their I-9 employment eligibility verification documentation, policies and procedures are up-to-date by conducting internal I-9 audits and regular I-9 training for personnel responsible for I-9s, developing written I-9 compliance policies and reviewing their I-9 tickler system to ensure that it is working effectively and accurately.

For Further Information

Should you have any questions about E-Verify, the revision of your employment policies and procedures relevant to E-Verify, or if you would like to discuss submitting a public comment on the proposed regulations implementing the Executive Order, please contact any attorney of the Employment & Immigration Practice Group or the attorney in the firm with whom you are regularly in contact.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.