Federal Contractors Are Now Required to Use an Electronic Employment Eligibility System

By Anne Frassetto Olsen, ESQ.
Published: June 24, 2008

On June 9, 2008, President Bush signed an Executive Order requiring that all federal contractors use E-Verify, an Internet-based system, to electronically verify the employment eligibility of newly hired employees in connection with the I-9 process. E-Verify was originally designed by the Department of Homeland Security as a voluntary program and, for most participating employers, it remains so. However, this new order mandates that if a private company enters into a contract with a federal agency, it must use E-Verify to verify the employment eligibility of:

  • all persons hired during the contract term by the contractor to perform employment duties within the United States; and
  • all persons assigned by the contractor to perform work within the United States on the federal contract.

There are several issues that need to be resolved before these requirements can become effective, namely:

  • Whether these provisions will apply only to new Federal contracts going forward, or whether a policy will be developed to implement the requirement for contracts already in existence; and
  • since the existing E-Verify system specifically directs employers to use the program only for new hires, will it be adapted for application to existing employees assigned to work under a federal contract?

Hopefully, these will be addressed and clarified once a Proposed Rule is published in the Federal Register in the near future.
Any employer who enrolls in the E-Verify program is required to agree, in writing, that the government may access the company’s records, including I-9 records. It is advisable, therefore, to audit current I-9’s for accuracy. It is also very important to make sure that appropriate personnel are trained on the proper completion, storage and retention of I-9 forms.

The federal government takes the position that E-verify is the best means available for determining employment eligibility of new hires and the validity of their Social Security Numbers, although many outside agencies have questioned the accuracy of the databases used by the program. Be that as it may, the use of E-Verify is now a requirement with which federal contractors must comply. Any questions regarding this issue should be directed to legal counsel competent in the area of employment law.