United States: E-Verify Requirement For Federal Contractors Delayed Until September 8

The federal government has once again delayed the implementation date of an executive order and related regulations issued by the Bush administration that would require federal contractors to use the E-Verify employment verification system. The new date for implementation is September 8.

This postponement, however, should not be interpreted as a signal that the Obama administration is abandoning E-Verify. On the contrary, E-Verify is a priority for the Obama administration and its worksite enforcement efforts to target employers who knowingly hire illegal workers.

Federal Contractor Regulations Postponed for Fourth Time

This is the fourth postponement of implementation of the rule requiring federal contractors to use E-Verify on all new hires and all employees assigned to work on a federal contract. The final regulations were originally to go into effect on January 15. This date was delayed until February 20 as a result of litigation filed by the U.S. Chamber of Commerce challenging the validity of the executive order and related regulations.

The Obama administration further delayed implementation in order to review the challenged executive order and related regulations, first until May 21, and then until June 30. Now, the federal government has once again delayed implementation of this rule until September 8 pursuant to an agreement made during the course of litigation and a rule published in the Federal Register on June 5.

In a status update to the court, the federal government stated that another postponement is necessary "due to an unrelated and unforeseen matter of national importance." Like the Social Security No Match rule first issued in August 2007—which has been postponed numerous times and most recently until June 10—it is now unclear when or if the E-Verify rule for federal contractors will become effective.

E-Verify Is a Priority for Obama Administration

Despite the uncertain future of the federal contractor E-Verify rule, this voluntary federal program is in no danger of disappearing. Department of Homeland Security Secretary Janet Napolitano has signaled that E-Verify will be an integral part of the Obama administration's new worksite enforcement efforts to target employers who knowingly hire illegal workers.

As Napolitano noted to the Senate Judiciary Committee, while the Department of Homeland Security (DHS) is targeting employers who violate the law, the agency is also working to aid law-abiding employers in their good faith efforts to hire legal workers. An employer's use of E-Verify can therefore be evidence of the employer's good-faith efforts to employ a legal workforce.

DHS also released its Worksite Enforcement Strategy on April 30 in which it stated that "DHS will continue to work with partners in the public and private sectors to maintain a legal workforce through training and employee verification tools like E-Verify, which improve the accuracy of determinations of employment eligibility and combat illegal employment."

Napolitano has also stated that improving E-Verify is a top priority of the Obama administration. The administration's 2010 budget is requesting $112 million in funding to expand E-Verify—a 12 percent increase over current spending. This increase would provide funding for the hiring of approximately 80 employees mostly to staff a newly created monitoring and compliance office.

E-Verify Trend Continues at State Level

As governor of Arizona, Napolitano signed into law one of the nation's toughest employer sanctions laws, which requires all employers in Arizona to use E-Verify. Several other states have similar statutes and executive orders in place requiring the use of E-Verify for certain employers. A Utah state statute requiring state contractors to use E-Verify goes into effect on July 1. Nebraska recently passed a similar statute requiring public contractors to use E-Verify after October 1.

Thus far, legal challenges to state E-Verify requirements have been generally unsuccessful. On April 3, a Rhode Island state court denied a legal challenge to the Rhode Island executive order requiring public contractors to use E-Verify. Alternatively, on March 11, a federal court struck down a 2007 Illinois statute that sought to prohibit employers from using E-Verify as invalid under the Supremacy Clause of the U.S. Constitution.

Bill Introduced to Extend E-Verify for Five Years

On June 3, Rep. Gabrielle Giffords (D-Ariz.) introduced the Employee Verification Amendment Act (H.R. 2679), which would extend E-Verify as a voluntary program for five years, through September 30, 2014. The E-Verify program is currently set to expire on September 30, 2009.

While the future of the executive order and related regulations requiring federal contractors to use E-Verify is unclear, it is certain that E-Verify will remain an important tool for employers to use in their immigration compliance efforts.

For more information about the postponement until September 8, please click here.

For more information about the Department of Homeland Security Worksite Enforcement Strategy, please click here.

For more information about federal contractor E-Verify requirements, see "E-Verify Mandatory for Federal Contractors Starting May 21."

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