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On November 30, 2009, the Supreme Court will hear oral argument in Graham County Soil & Water Conservation District v. United States ex rel. Wilson, a qui tam action brought under the False Claims Act (FCA) and appealed from a Fourth Circuit decision. The Court will use the case to resolve a split among the circuits over the scope of the FCA's "public disclosure" bar. A decision affirming the Fourth Circuit could increase qui tam litigation against any organization that does business with, or receives federal money through, federal, state and local governmental entities – and would further expand the reach of the FCA to any state or local program involving the use of federal funds.

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Labor, Employment and Benefits
Alert - August 31, 2009
 
After Delay, Mandatory E-Verify Requirement to Take Effect for Federal Government Contractors1
 
 August 31, 2009
 
Mark E. Baker- Northern Virginia
Jonathan E. "Jon" O'Connell- Northern Virginia

Beginning September 8, 2009, most federal contractors and subcontractors will be required to use E-Verify to verify the eligibility of their employees to work in the United States. A recent final rule, which amends the Federal Acquisition Regulations pursuant to a June 6, 2008 Executive Order (Executive Order), requires certain government contracts to contain a clause requiring contractors to enroll in and use E-Verify. Although the rule was initially set to go into effect earlier this year, due to existing federal court litigation and the change of administrations, its implementation was postponed.

This alert provides a summary of the E-Verify program, its applicability to federal contractors, and its requirements.

What Is E-Verify?

E-Verifty is a free, government-run, web-based system that electronically verifies the employment eligibility of employees. The system is a partnership between the Department of Homeland Security (DHS) and the Social Security Administration (SSA) and is administered by the United States Citizenship and Immigration Service (USCIS) within DHS. Participating employers can use the system to electronically compare information from an individual’s I-9 Form against more than 425 million records in SSA’s database and more than 60 million records in DHS databases. E-Verify only establishes employment eligibility – it does not verify an individual’s immigration status.

To What Extent Is E-Verify Mandatory?

The Executive Order makes use of E-Verify mandatory under most future federal contracts, beginning September 8, 2009. Pursuant to the Executive Order, E-Verify must be used to verify the employment eligibility of all persons hired to work in the United States during the contract term and all persons performing work within the United States on the federal contract.

What Future Contracts Will Contain the E-Verify Clause?

The rule requires that all prime federal contracts with a period of performance greater than 120 days and valued over $100,000 contain the E-Verify clause. The rule also covers subcontracts if the prime contract contains the E-Verify clause. For those subcontracts that flow down from covered prime contracts, the rule requires participation if the subcontract is for services or construction valued over $3,000.

Are There Any Exemptions From the Rule?

There are limited exemptions from the rule, including contracts for less than a period of 120 days, contracts in which all of the work is performed outside of the United States, contracts for less than $100,000, and contracts for only commercially available off-the-shelf items.

How Do Employers Register for E-Verify?

Employers can register online at https://e-verify.uscis.gov/enroll/, and must accept the terms of a Memorandum of Understanding included on the website.

Which Employees Must Federal Contractors Verify Through the Use of the E-Verify System?

Federal contractors participating in E-Verify are required to use E-Verify for the following:

    • all new employees hired to work in the United States during the contract term after they complete the Employee Eligibility Verification Form I-9
    • all existing employees classified as “employees assigned to the contract”; these are employees who work directly on the contract in the United States

When Must an Employer Enroll in E-Verify?

If an employer has not already enrolled in E-Verify, it has 30 days from the date of the contract award to do so. It then has 90 days from the date of enrollment to begin verification of employees who will be performing work on the contract and to verify new employees. Following this 90-day period, the employer will be required to begin verification of each new employee within three business days after their date of hire.

If an employer has already been using E-Verify for more than 90 days, it must continue to initiate verification of new employees within three business days of their date of hire. However, such employers have 90 days from the contract award date to begin using the E-Verify system for each employee assigned to the contract.

What Procedural Requirements and Employee Rights Apply to Use of E-Verify?

Employers who use E-Verify must follow certain procedures and observe certain employee rights, as follows:

    • The employer must post a notice provided by the DHS informing employees that it uses E-Verify.
    • E-Verify must be used for all new hires regardless of national origin or citizenship status. It may not be used selectively.
    • E-Verify must be used only after hire and completion of the I-9 Form. It may not be used to pre-screen applicants.
    • If the E-Verify system generates an information mismatch, the employer must promptly provide the employee with a written notice generated by E-Verify concerning how to challenge the mismatch.
    • If an employee challenges a mismatch, the employer must provide the employee with a referral letter issued by E-Verify that contains specific instructions and contact information.
    • Any form of employer retaliation or adverse action against employees who challenge a mismatch is strictly prohibited.
    • An employee faced with a mismatch must be given eight federal government workdays to contact the appropriate federal agency to contest the information mismatch.
    • An employee who receives an SSA tentative non-confirmation (TNC) has the option of visiting an SSA field office to update his or her record or, if the employee is a naturalized U.S. citizen, he or she may contact USCIS directly to resolve the matter. Relevant contact information is listed in the SSA referral letter.

Covered contractors who have not already registered for E-Verify should do so as soon as possible. Additionally, all government contractors should consult counsel in the event they have questions regarding compliance with the new rule’s requirements.


1 Information in this alert is taken from Executive Order 12989 (June 6, 2008), the final rule under that Executive Order, issued at 73 Fed. Reg. 67651 (November 14, 2008), and information that is publicly available at U.S. government websites.

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