E-Verify

Date: 11/18/08
Title: E-Verify

On November 14, 2008, the Department of Defense (DOD), the General Services Administration (GSA), and the National Aeronautics and Space Administration (NASA) jointly released a final regulation, effective January 15, 2009, amending the Federal Acquisition Regulation (FAR) requiring the use of the E-Verify electronic employment verification system for many government contractors and subcontractors.¹

All new contracts written after January 15, 2009 will be covered under the new regulation (unless the agreement is exempt ²); however, only certain existing contracts will be amended and covered. Government agency contracting officers are required to modify existing “indefinite-delivery/indefinite quantity” (ID-IQ) contracts if the remaining period of the performance under the contract extends at least six month after January 15, 2009 and if the remaining work is expected to be “substantial”.

This new regulation is based on Executive Order 13465 signed by President Bush on June 6, 2008 titled Economy and Efficiency in Government Procurement through Compliance with Certain Immigration and Nationality Act Provisions and the Use of an Electronic Employment Eligibility Verification System. The order mandates that all federal agencies that enter into contracts require, as a condition of the contract, that the contractor agrees to use an electronic employment eligibility verification system designated by the Department of Homeland Security (DHS) to verify all new employees and persons assigned to perform work within the United States on a federal contract. The E-Verify system was designated by the DHS to be used in carrying out the order.

Contractors who have not yet enrolled in E-Verify have the following timelines for using the E-Verify system.

Thirty calendar days to enroll as a federal contractor after a contract is awarded.
Within 90 calendar days of enrollment in E-Verify, the contractor must begin verifying employment eligibility for all new hires ³ working in the United States.
Within 90 calendar days of enrollment in E-Verify or within 30 calendar days of the employee’s assignment to the contract (whichever date is later); the employer must begin verification for all employees assigned to the contract.

Contractors who are already enrolled in E-Verify when the contract is awarded, the following timelines apply:

For contractors enrolled more than 90 calendar days, they must initiate verification for all new hires within three business days after date of hire.
For contractors enrolled less than 90 calendar days, they must initiate verification of all new hires within 90 calendar days after enrollment as a federal contractor.
For each employee assigned to the contract, the employer must begin verification within 90 calendar days after the date of the contract award or within 30 days after assignment to the contract (whichever date is later).

The following types of employees only need to verify employees assigned to a federal contract:

Institutions of higher education
State and local governments
Federally recognized Indian tribes
Sureties performing under a takeover agreement entered into with a federal agency pursuant to a performance bond.

To register, update contractor status, sign up for two-hour informational sessions, download a user’s manual, or gather general information, go to www.dhs.gov/everify.

¹ Subcontractors furnishing commercial or noncommercial services or construction in the United States with a value of $3000 or more under a prime contract or a subcontract covered by this rule must participate in E-Verify.

² The following types of contracts do not require inclusion of the E-Verify clause:

Contracts for commercially available off-the-shelf (COTS) items and items that would be classified as COTS items but for minor modifications;
Prime contracts that have a value less than $100,000 and subcontracts under those contracts that have a value of less than $3,000.
Contacts waived based on exceptional circumstances by the head of the contracting authority at the agency.
Contracts that are less than 120 days in duration.
Contracts for work that will be performed outside of the United States.

³ The rule exempts employees who hold an active security clearance of confidential, secret or top secret and employees for which background investigations have been completed and credentials issued pursuant to the Homeland Security Presidential Directive “Policy for a Common Identification Standard for Employees and Contractors” issued on 8/27/04.

The foregoing has been prepared for the general information of clients and friends of Workplace Dynamics LLC. It is not meant to provide legal advice with respect to any specific matter and should not be acted upon without professional counsel.