10/9/2009

A U.S. District Court Judge recently denied a motion for summary judgment in a challenge to a regulation requiring all federal contractors to participate in the E-Verify system. This lawsuit was brought by the U.S. Chamber of Commerce, the Society for Human Resource Management (SHRM), the Associated Builders and Contractors, Inc. and the HR Policy Association.

DHS Secretary Napolitano issued a July 8, 2009 press release stating the Obama Administration's support for the new regulation which requires federal contract awards to be granted only to companies that participate in the E-Verify system. This regulation, which has now survived legal challenge, requires not only that federal contractors participate in E-Verify, but certain subcontractors, as well.

The new E-Verify regulation goes into effect September 8, 2009. E-Verify compares information from each employee's Form I-9 with information from the SSA's databases, to confirm the individual's work authorization. To reduce the occurrence of errors, E-Verify has been enhanced with access to DHS's naturalization records, as well as the U.S. Department of State's passport records. 

These additional sources of data may help reduce mismatches of naturalized U.S. citizens, born in foreign countries. The regulation will only apply to federal contractors and subcontractors who are awarded new federal contracts that contain a federal acquisition regulation (FAR) E-Verify clause. E-Verify is currently authorized by the U.S. Congress on a temporary basis, which must be renewed each year.

This impact of the E-Verify regulation on government contractors will have to be assessed over time. As contracts for new projects are awarded, or others renewed with the addition of the FAR E-Verify clause, greater numbers of employees will be screened by the E-Verify system.