The final version of a new rule requiring businesses with federal government contracts to use an electronic system to verify their employees are eligible to work in the U.S. will apply to fewer employers than initially proposed.
The rule stems from a June executive order requiring government contractors to use E-Verify, an internet-based system that checks employee names and identification numbers against federal databases. Although the system has been available for a number of years, it was not mandatory. The initial proposal implementing the order indicated it would apply to all contracts above $3,000. The final rule, published Nov. 14, increases that threshold to $100,000 for prime contracts with a performance period of more than 120 days.
The rule retains the $3,000 level for subcontracts for services or construction if the prime contract is subject to the rule. The new rule exempts contracts for commercially available off-the-shelf items and those where all work is performed outside the United States. Although verification that an employee is eligible to work in the United States normally occurs only with new hires, the regulation requires covered contractors and subcontractors also verify the eligibility of all existing employees who are directly performing work under the covered contract.
The rule goes into effect Jan. 15, 2009, and all federal contracts awarded and solicitations issued after that date will include a clause committing government contractors to use E-Verify. Although contractors may enroll in E-Verify prior to the effective date, the rule requires employers to enroll within 30 days of being awarded a federal contract or subcontract covered by the regulations.
For additional information on the rule, contact Tim Gebhart.