Florida Governor Mandates Compliance with Federal E-Verify System
Rick Scott was sworn in as Florida’s 45th Governor on January 4, 2011. Within minutes of his inauguration, Governor Scott indicated that he was making good on his promise to hold government accountable by signing four Executive Orders. Executive Order 11-02 mandates that all state agencies under the direction of the Governor include as a condition of all state contracts that contractors utilize the U.S. Department of Homeland Security’s E-Verify system to verify the employment eligibility of “(a) all persons employed during the contract term by the contractor to perform employment duties within Florida; and (b) all persons (including subcontractors) assigned by the contractor to perform work pursuant to the contract with the state agency.”1
The Executive Order also encourages, but does not mandate, that all agencies not under the direction of the Governor require contractors to use E-Verify to verify the employment eligibility of their contractors and subcontractors.
E-Verify Background
E-Verify is an Internet-based system that allows an employer, using information reported on an employee’s Form I-9, to determine the eligibility of that employee to work in the United States.2 Because E-Verify uses information collected on Form I-9 to confirm an employee’s employment eligibility, contractors must ensure their employee’s I-9 Forms are accurate and up-to-date, which normally requires the contractor to conduct a human resource audit.3
Contractors that bid on or perform work for the federal government have choices to make about the scope of their human resource audit. Federal contractors have to decide whether to verify all of their employees through E-Verify, or only the ones assigned to work on the federal project. This decision could depend on whether the federal contractor has a dedicated workforce assigned to the federal project or whether it intends to supplement and/or rotate employees from non-E-Verify projects. However, as described below, the new Executive Order in Florida is broader than the Federal E-Verify requirements and thus will require a more expansive human resources audit at least with respect to contractor employees in Florida.
The Executive Order
The language of the Executive Order refers to a contractor using E-Verify to confirm the employment eligibility of all persons employed by the contractor during the contract term that will “perform employment duties within Florida.”4 As such, a strict reading of Governor Scott’s Executive Order seemingly requires all employees of a contractor contracting with a state agency whose employees are performing work in Florida during the contract period to have their eligibility verified through E-Verify regardless of whether or not that employee is working directly or even indirectly on the contract with the state agency. This is broader than E-Verify requirements for federal contractors under federal law, which only requires verification through the E-Verify system of those employees specifically working on the actual federal contract. In addition, because of its wording, it is unclear whether the Executive Order also requires subcontractors as well as contractors to verify the eligibility of all employees performing work in the state of Florida, or just those subcontractor employees performing work under a state contract.5
Additionally, E-Verify is only mandatory for certain federal contractors who engage in federal contracts or subcontracts that contain the Federal Acquisition Regulation (FAR) E-Verify clause. The contracting official will determine whether the federal contract qualifies using the following criteria: (1) the effective date of the contract is after September 8, 2009; (2) the contract has a performance period that is 120 days or more; (3) the contract’s value exceeds $100,000; and (4) at least some portion of the contract work is performed in the United States. Subcontracts for more than $3,000 for services or construction also qualify for E-Verify if the prime contract includes an E-Verify clause. Suppliers are not subject to E-Verify.6 Unlike the detailed federal guidelines, Governor Scott’s Executive Order does not include any limitation on the state contracts to which it applies except that it only is required to be a condition in contracts by agencies under the direction of the Governor.7
The Executive Order does not identify the contractor’s responsibility for monitoring compliance by its subcontractors with E-Verify requirements. This is also inconsistent with the federal guidelines, which state, “prime contractors are not responsible for verifying the subcontractors’ individual employees. However, the prime contractor must, by whatever means the contractor considers appropriate, ensure that all covered subcontracts at every tier incorporate the FAR E-Verify clause … and that all subcontractors use the E-Verify system.”8 Therefore, the contractor’s responsibility over its subcontractors (and suppliers and sub subcontractors) is not entirely clear in the Executive Order.
What This Means for Contractors
Based on the above, contractors planning to bid on state projects in Florida may want to consider taking proactive steps to ensure compliance with the Executive Order. Moreover, even if a contractor plans to bid on a state project by an agency not under the direction of the Governor, the contractor may want to consider proactive steps in light of the Executive Order’s encouragement of a similar requirement for these agencies, as well as the legislation currently pending in the Florida Legislature. For example, contractors can register for E-Verify, review the detailed E-Verify User Guide and Supplemental Guide for Federal Contractors found on the U.S. Citizenship and Immigration Services website, and assign an individual to confirm the accuracy of its employees’ I-9 forms.
Contractors should also use care in reviewing state procurement packages to specifically determine how the state agencies are interpreting Governor Scott’s Executive Order.
Attorneys who are knowledgeable about E-Verify can provide more detailed guidance regarding E-Verify compliance. To learn more about E-Verify and how it may impact solicitations for work, both state and federal, please contact Holland & Knight’s Construction Industry Practice Group.
1 In addition to Governor Scott’s Executive Order, Senate Bill 230 and House Bill 271 (2011) are currently pending in the Florida Legislature. Both bills seek to codify E-Verify requirements in the State of Florida.
2 The E-Verify system is operated by the U.S. Department of Homeland Security in partnership with the Social Security Administration.
3 Although there is no charge for determining an employee’s eligibility through E-Verify, the cost of conducting a human resource audit to verify the accuracy of I-9 forms may be substantial.
4 Executive Order 11-02, Section 2(a).
5 The Executive Order requires agencies under the direction of the Governor to include as a contract condition that contractors use E-Verify “to verify the employment eligibility of: … (b) all persons (including subcontractors) assigned by the contractor to perform work pursuant to the contract with the state agency.” Executive Order 11-02, Section 2(b).
6 Under federal E-Verify regulations, suppliers are not subject to E-Verify. The following website – http://www.uscis.gov – includes a detailed E-Verify User Manual and Supplemental Guide for Federal Contractors, which contains all of the E-Verify requirements.
7 It is unclear whether the E-Verify condition is required to be included only in new contracts going forward or whether it is required to be added as an amendment to existing contracts.
8 E-Verify Supplemental Guide For Federal Contractors, § 6.2 (emphasis added).