Implementation of a new rule requiring businesses with certain federal government contracts to use an electronic system to verify their employees are eligible to work in the U.S. has again been delayed, this time until May 21, 2009.
The rule was originally to go into effect on January 15, 2009, but was delayed until February 20 after the U.S. Chamber of Commerce and four other associations brought suit challenging the rule. The government and plaintiffs have now agreed to delay the rule until May 21, in part due to a January 20 memorandum from Rahm Emanuel, President Barrack Obama’s Chief of Staff, asking federal agencies consider extending for 60 days the effective date of regulations that have been published but not yet taken effect. In addition, the litigants agreed to ask the court to stay all proceedings in the lawsuit to allow the Obama Administration to review the rule.
The rule requires contractors and subcontractors to use E-Verify, an internet-based system that checks employee names and identification numbers against federal databases, for employees working on 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. Although verification that an employee is eligible to work in the United States normally occurs only with new hires, the regulation required contractors and subcontractors to also verify the eligibility of all existing employees directly performing work under the covered contract. The new agreement means that, at the earliest, only contract solicitations occuring on or after May 21, 2009, would be subject to the rule.
For additional information on the rule and its scope, please contact Tim Gebhart.