CLIENT ALERT: Federal Contractors Required to Use E-Verify Beginning Sept. 8, 2009

As a result of a recent federal court decision, and after four separate delays, a new regulation requiring federal contractors to use E-Verify will become effective on September 8, 2009. This requirement is part of a system put in place by Department of Homeland Security in an effort to strengthen employment verification methods by awarding federal contracts only to employers who use E-Verify to check employee work authorization. The E-Verify system is an Internet-based system operated by the United States Citizenship and Immigration Services (USCIS) intended to help deter illegal aliens and other unauthorized individuals from attempting to work and also helps employers identify unauthorized aliens.


As part of the newly enacted program, the E-Verify federal contractor rule will require the federal government to include a clause confirming compliance with the E-Verify system in all contracts that are awarded after the September 8 effective date. Additionally, employers will be required to confirm the identity of all new hires and of any current employees who are assigned to work under the government contract using the E-Verify system through information provided on I-9 Employment Eligibility Verification Forms.


The E-Verify employment verification requirements extend the use of the E-Verify system to covered federal subcontractors as well as covered prime (general) contractors, including those who receive American Recovery and Reinvestment Act funds. Companies awarded a contract containing the newly mandated E-Verify clause will be required to enroll in E-Verify within 30 days of the contract award date. Prime contracts are subject to the requirement if they are for a performance period of longer than 120 days and a value above a $100,000 dollar threshold (subject to certain exemptions specified in the regulation). If the prime contract includes the mandated E-Verify clause, the E-Verify requirement extends to any subcontract for services or construction with a value above $3,000 that flows from the prime contract. Federal contractors are advised to insert in their subcontracts a clause requiring subcontractor compliance with the E-Verify regulation and to provide proof of compliance upon request.


Businesses that have pending contracts with the federal government or subcontracts for federal projects are not required to sign up for E-Verify. The requirement is triggered on the contract (or subcontract) award date. The contractor or subcontractor must then sign up for E-Verify within 30 days.


This Client Alert is a summary only, prepared for general informational purposes, and is not an exhaustive description of the new federal E-Verify requirements. Nothing in this letter is intended or is to constitute a legal opinion or legal advice on the part of Meyers, Roman, Friedberg & Lewis.


If you would like to discuss how these changes affect you or your business, or for a fuller description of the new E-Verify requirements, please contact: Seth P. Briskin, Esq. (216-831-0042 ext. 141; or Lester W. Armstrong, Esq. (216-831-0042 ext. 161;