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All Federal Contractors Must Use E-Verify System When Hiring Employees

On June 6, 2008, President Bush signed an Executive Order amending Executive Order 12989. The new Executive Order requires all federal contractors to use the E-Verify system when hiring employees.

The Executive Order prohibits federal departments and agencies from entering into contracts with employers that do not use the E-Verify system. The Executive Order requires, in each federal contract, that the contractor agree to use E-Verify to verify the employment eligibility of: (1) all persons hired during the contract term by the contractor to perform employment duties within the United States; and (2) all persons assigned by the contractor to perform work within the United States under a federal contract.

E-Verify is an Internet-based system operated by the Department of Homeland Security (DHS) in partnership with the Social Security Administration (SSA) that allows participating employers to electronically verify the employment eligibility of their newly-hired employees. E-Verify enables employers to determine the employment eligibility of new hires and the validity of their Social Security Numbers.

The Department of Homeland Security (DHS) is expected to publish proposed regulations on these requirements soon. Current and prospective federal contractors are not, at this time, required to enroll in E-Verify. At this time, the E-Verify program remains a voluntary program for employers, including federal contractors. However, contractors should stay abreast of developments in this area.

The Executive Order instructs Federal agencies to require contractor participation in E-Verify as a term of future contracts. The forthcoming proposed rule will provide detailed guidance on how that requirement is to be implemented. Under the proposed rule, it is likely that a federal contractor will only be required to enroll in E-Verify if and when its enters into a federal contract or subcontract that requires participation in E-Verify, as a term of the contract.

At this time, employers are prohibited from running existing employees through E-Verify. Until a final rule is published in the Federal Register, existing program rules apply to all employers using the program. Under the proposed rule, it is likely that only those employers that are awarded a contract with the Federal Government that includes the contract term may run existing employees through E-Verify, and then, only if such employees work on the covered contract.

Before an employer can start using E-Verify, it will need to enroll in the program. When an employer enrolls, it will be asked to provide basic contact information and agree to follow the rules of the program. At the end of the enrollment process, it will be required to sign a Memorandum of Understanding (MOU) that provides the terms of agreement between the employer, the SSA, and DHS.

Employers may not use E-Verify prior to hiring a job applicant. All employers, including federal contractors, are prohibited from using E-Verify prior to hiring an applicant. By signing the MOU to participate in E-Verify, employers agree not to use E-Verify for pre-employment screening of job applicants, support for any unlawful employment practice, or any other use not authorized by the MOU. Should an employer use E-Verify procedures for any purpose other than as authorized by the MOU, the employer could be subject to legal action and the immediate termination of its access to SSA and DHS information.

All new hires are required to complete the Form I-9 before an E-Verify query is conducted. The employer must submit a query that includes information from sections 1 and 2 of the Form I-9, including: (a) the employee's name and date of birth; (b) Social Security Number (SSN); (c) attested citizenship status (U.S. citizen, lawful permanent resident, or alien authorized to work); (d) alien number or I-94 number, if applicable; (e) type of document presented for the Form I-9 to establish identity and/or work eligibility status; and (f) in some cases, the document number and expiration date. Recently-admitted asylees and refugees may not have a Social Security number at the time of hire; for those cases, the employer should run the person through E-Verify after the employee has received their number from the Social Security Administration.

The earliest that an employer may initiate a query is after an individual accepts an offer of employment and after the employee and employer complete the Form I-9. For newly hired employees, the employer must initiate the query no later than three business days after the newly hired employee starts working for pay.

All employers using E-Verify most notify applicants of their use of the program. An employer participating in E-Verify is required to post the notice provided by DHS indicating the company's participation in the E-Verify program, as well as an anti-discrimination notice issued by the Department of Justice. The posting must take place in an area where it can be viewed by applicants and new hires.

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