E-Verify & The Federal Contractor Rule

E-Verify is an Internet-based system operated by the Department of Homeland Security (DHS) and Citizenship and Immigration Services (CIS) that allows employers to electronically verify the employment eligibility of employees.  E-Verify checks information provided from the I-9 form against records contained in DHS and Social Security Administration (SSA) databases.

The Federal Contractor Rule (FAR) requires certain federal contractors to use E-Verify to electronically verify the employment eligibility of employees.  The rule requires certain federal contractors to agree, through language included into the federal contract, to use E-Verify to confirm the employment eligibility of all persons they hire during a contract term, as well as current employees who perform work under a federal contract within the U.S.  (It does not apply to employees hired before November 7, 1986.)  This new rule applies to certain federal contracts awarded after September 8, 2009.

A failure to properly use the E-Verify system under this new rule could lead to the loss of the current and future federal contracts.

The E-Verify process is required in addition to the I-9 process and not in place of or instead of the I-9 process.  Newly hired employees must still go through the I-9 process.  An E-Verify employer also has additional I-9 requirements including:

    1. You may only accept a List B document that contains a photo.
    2. You must photocopy any Employment Authorization Document (EAD) or permanent resident card (green card) if your employee presents one of the documents and keep the copy with the employee’s I-9.
    3. Your employee must write their social security number on Section 1 of the I-9.


Which Federal Contracts Fall Under the New Rule?

The government contracting official will determine whether a federal contract qualifies under the rule and whether the E-Verify clause must be included.  In general, a federal contract falls under the new rule if:

  1. The contract was awarded on or after September 8, 2009 and it includes the E-Verify clause language.
  2. The contract has a period of performance that is more than 120 days.
  3. The contract’s value exceeds the simplified acquisition threshold of $100,000.
  4. Part or all of the work performed under the contract will take place in the U.S.

If there is an existing indefinite-delivery/indefinite-quantity (IDIQ) contract, the government contracting official may modify the contract on a bilateral basis to include the E-Verify clause and requirement for future orders if the remaining period of performance of the contract extends at least six months after September 8, 2009 AND/OR the amount of work or number of orders expected under the remaining period of performance is substantial.

Some federal contracts such as contracts for commercially available off-the-shelf (COTS) items, bulk cargo and grants to universities may be exempt from this new rule.

Does the Rule Apply to Subcontracts?

The new federal contractor rule only applies to subcontractors if the main federal contract includes the E-Verify clause.  In those situations, the rule extends the E-Verify requirement to subcontracts for services or construction with a value over $3,000.

It is the prime contractor’s responsibility to ensure that the subcontractor participates in the E-Verify system.  The prime contractor should include a clause in the contract with the subcontractor outlining the federal contractor rule and confirming they will participate in the E-Verify system.  As proof of enrollment in the system, the prime contractor should also ask any affected subcontractor to provide a copy of its Maintain Company page which can be printed directly from E-Verify.

These steps are important because the prime contractor may be subject to fines and penalties if they knowingly continue to work with a subcontractor who is in violation of the E-Verify requirement.

Which Employees May be Verified through the E-Verify System?

As a federal contractor participant in the E-Verify system, you must use E-Verify for:

  1. All new employees after the I-9 process is completed.
  2. All existing employees who are classified as “employees” assigned to the contract.  (An employee is not considered to be directly performing work under the contract if the employee normally performs administrative support work, such as indirect or overhead functions, and does not perform any substantial duties under the contract.  Employees with certain security clearances may also be exempt)

Employees who only work for a short time or intermittently and employees who have been run through the E-Verify system through a previous employer are still subject E-Verify and still must be run through the E-Verify system.

Under the rule, only those employers that are awarded a contract that includes the E-Verify clause may run existing employees through E-Verify.

What are the Timing Rules for Enrollment and Verifying Employees?

There are very specific and important deadlines for enrollment and verification under the E-Verify system.  For companies that are not yet enrolled in E-Verify, those timelines include:

  1. Enroll in E-Verify as a Federal Contractor within 30 calendar days of the award date of a contract that contains the E-Verify clause.
  2. Begin verifying all newly hired employees within 90 calendar days of the enrollment date.
  3. Initiate verification of all existing employees assigned to the qualifying contract within 90 calendar days of the enrollment date.
  4. If this options chosen, initiate verification of all existing employees within 180 calendar days of notifying E-Verify of the choice to verify the entire workforce.

After the 90 day phase-in period, the employer is required to initiate verification for all new hires within 3 business days after their state date.

Do Not use E-Verify Prior to Making a Job Offer

Companies are prohibited firm using E-Verify prior to a job offer and acceptance by the applicant.  The memorandum of Understanding (MOU) signed as part of the E-Verify process requires employers to confirm that they will not use E-Verify for any pre-screening purposes.  Improper use of the E-Verify system may lead to legal action against the employer and termination from the E-Verify program.

Posting Requirement Under E-Verify

A participating E-Verify employer must post a notice provided by the DHS indicating the employer’s participation in the E-Verify program.  The employer must also post the anti-discrimination notice issued by the Office of Special Counsel for Immigration-related Unfair Employment Practices at the Department of Justice.  The posting must take place in a prominent place that is clearly visible to prospective employees and all employees who are to be verified through the E-Verify system.

How Does the E-Verify System Work?

After information is submitted into the E-Verify system, one of three results will appear from the Initial Verification within seconds:

  1. Employment Authorized -The employee is authorized to work.
  2. SSA Tentative Non-Confirmation -There is an information mismatch with SSA.
  3. DHS Verification in Process -DHS will usually respond within 24 hours with either “Employment Authorized” or “DHS Tentative Non-Confirmation.”

When you receive “Employment Authorized” confirmation by E-Verify, you will see on the screen that “The case has been successfully resolved.” You can then close the screen. If you don’t have an electronic I-9 system, we recommend, however, that you first do a E-Verify screen capture printout. This will be your record of the E-Verify authorization results.

If E-Verify does not resolve your submission due to mismatched information or some other complications, you will have a range of options, depending on the type of discrepancy. Some initial errors may simply be resolved by entering the information differently (pay attention to hyphenated names or multiple surnames or middle names). Other error messages will require you to check back with the employee (i.e. maiden name still in the federal government database, wrong SSN or other questionable data).

There are specific rules for timely responding to a non-match.  The following steps should be taken after receiving a “Tentative Non-confirmation” (“TNC”):

  1. Inform the employee and print the TNC notice and review it with the employee to check for errors.
  2. Confirm whether the employee chooses to “contest” or “not contest” the TNC.
  3. Refer the employee to the appropriate agency if the TNC is contested.

If the TNC is contested, the employee has only 8 Federal Government workdays from the date of referral to visit or call the appropriate agency to resolve the discrepancy.

During this period, the employee continues to work while the case is being resolved.

The employee should inform the employer once the discrepancy in the records is resolved.  The employer should check the E-Verify system periodically for a response from SSA or DHS – with one of the following three results:

  1. Employment Authorized
  2. Final Non-confirmation
  3. Review and Update Employee Data then Resubmit

The employer may then resolve the case through the E-Verify.  If the result is a final non-confirmation, legal counsel should be contacted to review the proper next steps.