• Federal Contractors: Final Rule for E-Verify Becomes Effective January 15, 2009
  • January 16, 2009 | Author: Penelope M. Lechtenberg
  • Law Firm: Hinshaw & Culbertson LLP - Rockford Office
  • The January 15, 2009, effective date for a Final Rule promulgated by the United States Department of Defense requiring federal contractors to enroll in and use the E-Verify system to verify the employment authorization for all of their existing and new employees is fast approaching. The Final Rule applies prospectively to all federal contracts awarded on or after the effective date. Special additional requirements apply for Illinois employers who are federal contractors and subcontractors.
    Following is an executive summary of the employer obligations associated with this Final Rule.

    What is E-Verify? E-Verify is an Internet-based system operated by the Department of Homeland Security (DHS), U.S. Citizenship and Immigration Services (USCIS) that allows employers to verify the employment eligibility of their employees, regardless of citizenship. Based on the information provided by the employee on his or her Form I-9, E-Verify checks this information electronically against records contained in DHS and Social Security Administration (SSA) databases.

    Who is required to use E-Verify? Effective January 15, 2009, employers are required to enroll in E-Verify if and when they are awarded a federal contract or subcontract that requires participation in E-Verify as a term of the contract.

    How soon is enrollment in E-Verify required? Any employer may voluntarily enroll in E-Verify at any time. Any employer already enrolled in E-Verify who is awarded a federal contract on or after January 15, 2009, will need to update the company profile once the contract has been awarded. Any employer awarded a federal contract on or after January 15, 2009, who is not already enrolled, must enroll in the E-Verify program within 30 calendar days of the contract or subcontract award date. All E-Verify users at an enrolled company must complete a federal contractor tutorial that explains the new policies and features that are unique to federal contractors.

    Which employees must be verified through E-Verify? The E-Verify system is designed to verify the employment status of new hires only. However, for federal contractors, the system has been modified to permit federal contractors and subcontractors to verify the employment authorization not only of new hires, but also of all existing employees. Federal contractors and subcontractors have a 90-day phase-in period during which they must begin verifying the employment authorization of all existing employees as well as new hires.

    Once an Employer’s federal contract ends, must it continue to use E-Verify? No. Continued participation in the E-Verify program by employers who do not have federal contracts continues to be voluntary. In order to stop using E-Verify, the employer must update its company profile and request termination. Once the profile is updated to confirm no federal contracts exist, the employer’s ability to check existing employees (as opposed to only new hires) will end.

    What is the definition of “federal contract” for purposes of this Final Rule? The Final Rule requires the insertion of the E-Verify clause for prime federal contracts with a period of performance longer than 120 days and a value above the simplified acquisition threshold ($100,000). The rule only covers subcontractors if a prime contract includes the clause. For subcontracts that flow from those prime contracts, the rule extends the E-Verify requirement to subcontracts for services or for construction with a value over $3,000.

    Does the Final Rule extend to contracts outside the United States? The Rule applies only to employees working in the U.S., which is currently defined to include the 50 states and the District of Colombia, Guam, Puerto Rico and the U.S. Virgin Islands.

    Special Considerations for Illinois Employers. In 2007, the State of Illinois passed a new law — Section 12(a) of the Illinois Right to Privacy in the Workplace Act — that would effectively prohibit employers in the state from enrolling in DHS’ E-Verify program. That new law was supposed to become effective on January 1, 2008. In September 2007, DHS sued Illinois and asked a court to declare the new law illegal; the case has not yet been resolved. In light of this pending litigation, the state of Illinois has agreed to not enforce this law until DHS’ lawsuit is over. Nonetheless, the state law contains numerous additional provisions which are not at issue in the federal lawsuit and therefore continue to be valid and enforceable. Among other things, other sections of the state law place additional obligations on Illinois employers who choose to use the E-Verify system, including, but not limited to: special attestation requirements using forms prescribed by the Illinois Department of Labor, the posting of additional notices to employees and prospective employees, additional tutorial and training requirements for E-Verify system users, and additional limitations and safeguarding measuring regarding the use and storage of the information obtained from the E-Verify system. Any Illinois employer enrolled in E-Verify must be keenly aware of the specifics of all of these additional state requirements and ensure that it is in compliance.

    Additional information about E-Verify may be viewed at www.uscis.gov or www.dhs.gov/E-Verify.