June 9, 2011

Florida Governor Supersedes Previously Issued Executive Order Mandating Compliance With Federal E-Verify System

Holland & Knight Alert
Monte S. Starr

One of the first acts that Governor Rick Scott of Florida signed at the beginning of his first term was Executive Order 11-02. The order, which was signed on January 4, 2011, mandated that all Florida state agencies, as a condition of all state contracts, utilize the 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.” (emphasis added) Based on the language in the Governor’s original Executive Order, all persons employed by the contractor and subcontractors – regardless of when that person was hired – were required to be verified through the U.S. Department of Homeland Security’s Internet-based E-Verify system.

Specific Issues Addressed by Executive Order 11-116

On May 27, 2011, Governor Scott signed Executive Order 11-116 which supersedes Executive Order 11-02. This action was premised on the fact that contractors and subcontractors were technically unable to comply with Governor Scott’s original Executive Order as the E-Verify system allowed only entities with existing federal contracts to verify both existing employees and newly-hired employees. As such, contractors and subcontractors without pending federal contracts were unable to verify existing employees – despite the original mandate by Governor Scott.

Executive Order 11-116 resolves the conflict in the original order by deleting the all-encompassing phrase “all persons,” and replacing it with “all new employees hired by the contractor [and subcontractors] during the contract term.” Thus, only new employees hired during the contract term are now required to be verified through the E-Verify system.

In addition, while Governor Scott’s original Executive Order instructed subcontractors to verify its employees, Executive Order 11-116 now specifically contains “an express requirement that contractors include in such subcontracts the requirement that subcontractors performing work or providing services pursuant to the state contract utilize the E-Verify system ... .”

Finally, Governor Scott placed a monetary threshold on which state contracts would require contractors and subcontractors to utilize the E-Verify system. Executive Order 11-116 only applies to “contracts for the provision of goods or services to the state in excess of nominal value ... .” (emphasis added) Unlike its federal counterpart, Executive Order 11-116 contains no clear definition of the monetary value that requires compliance with the Executive Order.1

Clarification on Compliance With the Revised Order

Based on the language of the revised Executive Order, while the Governor attempted to clarify the required use of E-Verify for only newly-hired employees, a strict reading of the Executive Order seemingly requires all newly-hired employees of a contractor/subcontractor contracting with a state agency to have their eligibility verified through E-Verify regardless of whether or not that employee is working directly on the contract with the state agency. This is contrary to the federal law that only requires verification through the E-Verify system of those employees specifically working on certain federal contracts.

It is expected that state agencies seeking to procure work or services will specify whether the contract being bid on is subject to Governor Scott’s E-Verify mandate, i.e., whether the value of the work or services is in excess of a “nominal value.” Thus, contractors and subcontractors should be cognizant of the costs associated with e-verifying newly-hired employees when attempting to procure a state contract.

For compliance with E-Verify requirements or to learn more about E-Verify and how it may impact solicitations for both state and federal work, contact one of the authors of this alert or another member in the Holland & Knight Construction Industry Practice Group.

1 In addition to other qualifying criteria, federal prime contracts which exceed $100,000 qualify for e-verification, while subcontracts exceeding $3,000 for services or construction qualify for e-verification if the prime contract includes an E-Verify clause.

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