PUBLICATIONS

Mandatory Use of E-Verify By Federal Contractors And Subcontractors

9/8/2009

Effective September 8, 2009, federal contractors must use the federal government’s E-Verify system to verify electronically that new and existing employees are authorized to work in the United States. The new rule applies to all federal contracts for more than $100,000 and with performance terms of more than 120 days. It also applies to any subcontracts worth more than $3,000. Contractors must use E-Verify to establish authorization to work for (i) all persons hired during the contract term to perform employment duties within the United States; and (ii) all persons assigned by the contractor to perform work within the United States on the Federal contract – in other words, both new and existing employees.

Under the Immigration and Nationality Act (“INA”), as amended by the Immigration Reform and Control Act of 1996 (“IRCA”), it is unlawful for an employer knowingly to employ unauthorized aliens. IRCA created a document-based system – the completion of the I-9 form – as a means of ensuring compliance with the law. The INA was further amended by the Illegal Immigration Reform and Immigrant Responsibility Act of 1996 (“IIRIRA”), which required the Attorney General, and thereafter the Secretary of Homeland Security, to administer pilot programs to confirm employment eligibility. One of those pilot programs was E-Verify. As the name implies, the system allows an employer to verify that an individual is authorized to work in the United States by using the internet to check a newly-hired employee’s I-9 information against government records.

Originally, the IIRIRA provided that participation in the E-Verify system was voluntary, other than for certain federal agencies, the Legislative branch, and certain immigration law violators. In addition, employers could use E-Verify only to verify new employees, not existing employees. However, in 2008, President Bush issued an Executive Order that required all federal contractors to use “an electronic employment eligibility verification system” designated by the Department of Homeland Security. The DHS duly named E-Verify as the electronic verification system to be used, and it promulgated the regulations (the “Final Rule”) requiring federal contractors to use E-Verify.

The Final Rule was slated to go into effect on January 15, 2009, but a lawsuit filed in December 2008 asserted that the Final Rule violated the IIRIRA, and that it exceeded statutory and constitutional authority. The lawsuit, as well as inauguration of President Barack Obama and the installation of the new Administration, caused the effective date of the Final Rule to be delayed multiple times. In the intervening period, the Obama Administration decided to implement the Final Rule, forcing the court to rule on the litigation. A federal district court in Maryland has now upheld the Final Rule, and it went into effect on September 8, 2009. A coalition of business groups has already appealed the Maryland court’s decision and filed a motion for an emergency injunction to block the Final Rule. The district court denied the injunctive relief on September 4, 2009.

Use of the E-Verify system remains voluntary for employers that do not contract with the federal government. Immigration authorities, however, have separately announced that their enforcement strategy will focus more on employers, claiming that will better target the root causes of illegal immigration. Although it has its own drawbacks (such as perhaps promoting greater incidence of identity theft), E-Verify can provide a useful tool for employers endeavoring to comply with the immigration laws and avoid potential criminal exposure for hiring unauthorized workers.

In verifying eligibility to work in the United States, whether through E-Verify or otherwise, employers must also remain aware of their legal obligations not to discriminate against individuals on the basis of race, national origin, or citizenship status. For example, an employer cannot avoid the challenges of immigration compliance by declining to interview or hire individuals who do not appear to be U.S. citizens or who do not have the kinds of identity or work eligibility documents that an employer might prefer.