Effective January 15, 2009, the United States Citizenship and Immigration Service (USCIS) will require federal contractors to use its E-Verify system. E-Verify is an automated system of verifying employees' identity and authorization to work through the databases of both the Social Security Administration and the Department of Homeland Security. Enrollment will be required for most prime federal contracts with a period of performance longer than 120 days, a value above the simplified acquisition threshold ($100,000), and for work to be performed in the United States. This requirement also will apply to indefinite delivery or indefinite quantity contracts. The federal contractor and any covered subcontractors will need to enroll in E-Verify within 30 days of the contract award date.

Under the new rule, the federal contractor will be required to use the E-Verify system to confirm the work eligibility of (1) all persons hired by the contractor to perform work in the United States; and (2) all persons assigned by the contractor to perform work within the United States on the federal contract. Participating employers will be required to enter into a Memorandum of Understanding with the Department of Homeland Security, in which the employer agrees to use the E-Verify system. Note that there are many detailed procedural requirements which must be addressed in this agreement.

The rule provides that if a covered government contractor fails to use the E-Verify system, the contractor is subject to a risk of debarment. Further information about the E-Verify system can be found at www.uscis.gov/e-verify.

The government estimates that, as a result of this new requirement, 170,000 new employers will enroll in E-Verify and 4,000,000 employees will go through the E-Verify process in the first year. For employers who are not federal contractors, the system remains a voluntary one. However, the federal government intends to make the E-Verify system a key component in controlling unauthorized employment in the United States, and the new rule relating to federal contractors likely is only a first step in that direction.

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