With a federal court decision issued this week, a regulation requiring certain federal contractors and subcontractors to use the federal government's E-Verify program is set to go into effect September 8.
E-Verify is an internet-based system that system allows employers to verify electronically that newly hired employees are authorized to work in the United States by checking names and identification numbers against federal databases. The regulation requiring its use was announced in final form in November 2008 but was challenged in federal court in Maryland by a variety of groups, including the U.S. Chamber of Commerce. This week, the court ruled that the regulation does not violate federal law. The Obama Administration previously announced the rule would go into effect September 8, meaning it will apply to federal contracts awarded after that date.
Although verification that an employee is eligible to work in the United States normally occurs only with new hires, the regulation requires certain contractors and subcontractors to also verify the eligibility of all existing employees directly performing work under the covered contract. The rule applies to prime contracts of $100,000 or more with a performance period of more than 120 days and subcontracts of $3,000 or more for for services or construction if the prime contract is subject to the rule. It does not apply to contracts for commercially available off-the-shelf items or where all work is performed outside the United States.
For more information on the E-Verify rule, contact Tim Gebhart.