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February 22, 2010
By William S. Hale
Howrey LLP
The termination date for E-Verify, the Department of Homeland Security’s program to provide Internet-based verification of employment eligibility, has been extended for three years to September 30, 2012. In addition, the Federal Acquisition Regulation has been amended to mandate that most federal government contracts include an E-Verify clause requiring contractor and subcontractor participation.
For all prime contracts with the U.S. government of more than $100,000, an E-Verify clause is required unless:
 | All work will be performed outside the United States;
or
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| All work will be performed in less than 120 days;
or
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| Only “commercially available off-the-shelf items” are being purchased.
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See, 48 CFR 22.1800, et seq.; 48 CFR 52.222-54; 48 CFR 2.101 [simplified acquisition threshold of $100,000].
Prime contractors subject to E-Verify must require that all of their subcontractors comply unless a subcontractor is:
| Providing construction or services valued at less than $3,000;
or
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| Performing all work outside the United States;
or
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| Providing only services normally associated with supply of “commercially available off-the-shelf items.”
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See, 48 CFR 52.222-54 (e).
Once awarded a contract containing the E-Verify clause, a contractor has 30 calendar days to enroll in the program, if not already enrolled. A contractor can enroll online from the Department of Homeland Security’s E-Verify home page at www.dhs.gov/E-Verify, clicking on “E-Verify Enrollment” and following the instructions.
Once enrolled, a contractor typically has 90 calendar days to begin verifying employment eligibility of all new hires working in the United States. This is required regardless of whether or not the new hires will be working on U.S. government contracts. There are a few exceptions: institutions of higher education, state governments, local governments and sureties “performing under a takeover agreement entered into with a Federal agency pursuant to a performance bond.” If an exception applies, the contractor need only verify new hires working on the government contract.
Contractors also must verify existing employees hired after November 6, 1986, and assigned to the contract, either 90 calendar days after award or 30 calendar days after assignment to the contract, whichever is later. If a contractor prefers, it can choose to verify all of its employees hired after November 6, 1986, whether assigned to the contract or not. If it chooses this option, the contractor has 180 calendar days from either enrollment or notification to E-Verify Operations of its choice to exercise this option.
The Department of Homeland Security’s E-Verify home page (www.dhs.gov/E-Verify) contains more information and includes a FAQs page, PowerPoint presentation, demonstration video, and registration information for upcoming instructional webinars. The FAQs, for example, explain how employers must proceed if an employee receives a Tentative Nonconfirmation Notice (TNC), describe Web interfaces for performing E-Verify checks and explain prohibitions against using E-Verify to pre-screen job applicants.
Changes were made to the E-Verify program by P.L. 111-83, the DHS appropriations bill, which was signed into law by President Obama on October 28, 2009. Changes in the Federal Acquisition Regulation (FAR) effective on September 8, 2009, required participation in E-Verify by federal contractors.
On a related matter, the Department of Homeland Security has rescinded its never-implemented “no-match” rule, which had been the target of legal challenges. The rule was intended to provide a safe harbor for employers that, as part of the Employment Eligibility Verification form (Form I-9) process, received “no-match letters” – letters informing contractors that an employee name and Social Security Number combination did not match Social Security Administration records. Employers had expressed concern that the “no-match” rule would have imposed additional burdens on them. The Department of Homeland Security’s announcement said the department had decided to focus on other methods of deterring employment of unauthorized workers, such as E-Verify. Details were published in the Federal Register on October 7, 2009, at Vol. 74, No. 193, pp. 51447–51452, available at edocket.access.gpo.gov/2009/E9-24200.htm
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For more information about the issues covered in this report, please contact William Hale in our San Francisco office at 415-848-3252 or at HaleW@howrey.com or contact your Howrey attorney. For more information about Howrey's Construction Practice Group, click here.
©2010 Howrey LLP
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