Rule Mandating E-Verify for Federal Contractors Now in Effect

Date: August 27, 2009

In August, a federal court upheld a 2008 executive order requiring federal contractors to use E-Verify, an Internet application that checks employment eligibility, for all newly hired employees as well as all current employees directly working on a contract.
The rule went into effect Monday, September 8. From that date, most federal contracts will contain a clause mandating the contractor to use E-Verify.


What is Federal Acquisition Regulation (FAR)?

FAR is the federal contracting regulation that has imposed a new rule requiring federal contractors to use the E-Verify system to determine employees' eligibility to work in the United States. 

Who does this rule apply to?

The new rule generally applies to prime federal contracts with a period of performance longer than 120 days and a value of more then $100,000, excluding contracts for commercially available off-the-shelf items. The rule also covers subcontractors on a prime contract that expressly includes the E-Verify requirement, or on subcontracts for services or construction with a value of over $3,000.

When does this rule go into effect?

Companies awarded a federal contract after September 8, 2009 will be required to enroll in E-Verify within 30 days of the contract award date.  Generally, the rule will not apply to contracts that began before September 8, 2009 but may apply to existing contracts that are modified after that date.

What is E-Verify?

E-Verify is a free web-based system operated by the Department of Homeland Security, in partnership with the Social Security Administration. The system compares employee information from the Employment Eligibility Verification Forms (I-9) against federal government databases in order to verify workers' employment eligibility.

Where can I learn more?

What if I already use E-Verify?

If you already use E-Verify but are now required to use it as a federal contractor, you will need to update your company profile through the Maintain Company page.  To do this, log in to E-Verify, go to the Maintain Company page, and select the option indicating you are a federal contractor.  Once you designate your organization as a federal contractor, all users (including yourself) will need to take a brief federal contract tutorial that explains the new policies and features that are unique to federal contractors.

This NFIB alert does not constitute legal advice, and you should consider consulting an attorney about any laws and regulations that are applicable in your state, locality or particular type of business.

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