Government Contracts MonitorIn the waning days of the Bush Administration, the federal government amended the Federal acquisition Regulations ("FAR") to impose new obligations on the federal government contractors to electronically verify their employees' eligibility to work in the United States.
Background
Starting January 15, 2009, federal prime contractors and subcontractors will be required to use the U.S. Citizenship and Immigration Services (USCIS) E-Verify system to electronically verify employees are eligible to work in the United States. The new rule updates the Federal Acquisition Regulation (FAR) and implements Executive Order 12989, as amended by President George W. Bush on June 6, 2008. The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (the “FAR councils”) finalized and published the rule in the Federal Register on November 14, 2008. The full text of the rule can be found here.
What is E-Verify?
E-Verify is an internet-based system operated by USCIS, part of the Department of Homeland Security (“DHS”), that allows employers to electronically verify their employees’ work eligibility. After an employee completes an Employment Eligibility Verification Form (I-9), the employer enters the I-9 information into the system via a web-based interface. E-Verify then uses federal databases to confirm it against the employee’s name, social security number, date of birth, and citizenship status. If the information is confirmed, the employee is cleared to begin working. After processing each employee through E-Verify, employers must print off and retain a copy of the transaction record along with the employee’s Form I-9.
If an employee’s I-9 information does not match the relevant government database, E-Verify issues a “tentative nonconfirmation” and the employer must notify the employee. The employee then has 8 days to resolve the issue with the DHS or the Social Security Administration (SSA). According to DHS, nonconfirmations can often be resolved over the phone using a toll-free number.
To enroll in E-Verify, employers must enter into a memorandum of understanding (MOU) with DHS and SSA and agree to abide by current legal hiring procedures and to ensure that no employee will be unfairly discriminated against in the use of E-Verify. To learn more about using E-Verify, see USCIS’ website.
Coverage of the New Rule
Under the new rule, all non-exempt federal prime contracts exceeding the simplified acquisition threshold (in most cases, $100,000) entered into after January 15, 2009 must contain the E-Verify clause. Contracts and subcontracts are exempted from coverage if they are for a period of performance less than 120 days or for commercially available off-the-shelf (COTS) products (and those products that would be COTS but for minor modifications or their status as bulk cargo), certain related commercial services, or work to be performed solely outside the U.S. Orders under existing indefinite delivery/indefinite quantity (ID/IQ) contracts may also be covered if the period of performance extends 6 months after the rule’s effective date. Contractors must flow down the E-Verify clause to each subcontract for commercial or noncommercial services (except for certain commercial services related to a COTS item) or construction, that has a value of more than $3,000 and includes work to be performed in the U.S.
Contractors will be required to validate the work eligibility of employees “directly performing work” under a covered contract and all new employees hired by the contractor within 3 business days of hire, except for employees holding an active security clearance or credentials issued pursuant to Homeland Security Presidential Directive (HSPD)-12. Contractors that are not currently enrolled in E-Verify will need to enter the program within 30 calendar days of contract award and will have 90 days from enrollment to begin using the system for new and existing employees.
What does this mean for YOU?
Currently, only 92,000 employers use E-Verify. In fiscal year 2008, only roughly 10% of all new hires nationwide were processed through the E-Verify system. For employers that are not currently enrolled, the enrollment process, which is relatively easy and inexpensive, must be promptly completed.
Even if your company already uses E-Verify on a voluntary basis, you should review your procedures to ensure compliance with the new mandatory requirements. Significantly, all existing employees working on federal contracts must be verified, not just new hires. In addition, unless E-Verify is used for all employees, contractors must carefully monitor which employees are working on covered contracts and ensure that they are verified. In any event, certain personnel may need to be retrained concerning E-Verify.
Employers are subject to fines of $500-$1000 for continuing to employ an employee for whom the employer has received an E-Verify nonconfirmation without notifying the DHS.
An employer’s failure to comply with established procedures under the MOU may result in termination of the MOU by DHS or SSA. In the event of such an outcome, the terminating agency must refer the matter for possible suspension or debarment action.
The Next Hurdle: Identity Theft
Although no contractor participating in E-Verify can be held civilly or criminally liable for any action taken in good faith reliance upon information provided by E-Verify, using the program does not absolve an employer from violations of other immigration laws. In fact, federal agencies are increasingly using suspension and debarment as a tool for enforcing immigration law. In this regard, employers must be particularly conscious of the threat of identity theft.
Criticism has arisen from E-Verify’s limited ability to detect identity theft – i.e. when the employee presents legitimate but illegally obtained documents. E-Verify will not detect forged picture identification or the use of one social security number by multiple employees.
In September 2007, E-Verify introduced a photo screening capability into the authentication process. The Photo Screening Tool is activated only when a new hire presents a recent version of the Permanent Resident Card or an Employment Authorization Card. The USCIS is currently updating this feature and more document types may be added.
