20 Questions (& Answers) For The E-Verify Federal Contractor Rule

by Tom Ahearn August 27, 2009

“20 Questions” is a fun guessing game to play that helps pass the time during long road trips. However, the following 20 questions (and answers) should keep contractors (and subcontractors) from guessing about compliance issues with regard to the new Federal Contractor Rule mandating the use of E-Verify.

1. When does the E-Verify Federal Contractor Rule begin?
After being delayed three times, the effective date of the final rule requiring certain federal contractors and subcontractors to use E-Verify is September 8, 2009. The rule will only affect federal contractors who are awarded a new contract after September 8, 2009 that includes the Federal Acquisition Regulation (FAR) E-Verify clause (73 FR 67704). Federal contractors may NOT use E-Verify to verify current employees until the rule becomes effective and they are awarded a contract that includes the FAR E-Verify Clause.

2. What is E-Verify and how does it work?
E-Verify is a Web-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. Based on the information provided by the employees on their Employment Eligibility Verification Forms – “or I-9 Forms” – E-Verify checks this information electronically against records contained in DHS and SSA databases.

3. Why do federal contractors have to enroll in E-Verify?
On June 6, 2008, President George W. Bush issued Executive Order 13465 “Economy and Efficiency in Government Procurement through Compliance with Certain Immigration and Nationality Act Provisions and the Use of an Electronic Employment Eligibility Verification System,” providing that “Executive departments and agencies that enter into contracts shall require, as a condition of each contract, that the contractor agree to use an electronic employment eligibility verification system (E-Verify) designated by the Secretary of Homeland Security to verify the employment of: (i) All persons hired during the contract term by the contractor to perform employment duties within the United States; and (ii) All persons assigned by the contractor to perform work within the United States on the federal contract.” The Federal Acquisition Regulation (FAR) was amended to require federal contractors to use E-Verify, which is the system designated to implement the Executive Order. The E-Verify Federal Contractor Rule requires that federal contractors agree to electronically verify the employment eligibility of their employees so that the federal government does business with companies that have a legal workforce. The new rule requires federal contractors to agree, through language inserted into their federal contracts, to use E-Verify to confirm the employment eligibility of all persons hired during a contract term, and to confirm the employment eligibility of current employees who perform contract services for the federal government within the United States.

4. Are current or prospective federal contractors required to enroll in E-Verify now?
The E-Verify Federal Contractor Rule applies to solicitations issued and contracts awarded after the final rule becomes applicable to contractors on September 8, 2009. All employers, including federal contractors, may enroll in E-Verify at any time without waiting for the applicability date.  Under the rule, employers are required to enroll in E-Verify if and when they are awarded a federal contract or subcontract that requires participation in E-Verify as a term of the contract.

5. If a company is awarded a federal contract after the E-Verify Federal Contractor Rule takes effect, how soon is the company required to use E-Verify?
When a contractor wins the bid on a federal contract that contains the FAR E-Verify clause, the contractor and any covered subcontractors on the project are required to use the E-Verify program within 30 calendar days of the contract or subcontract award date.  Usage of E-Verify also applies to indefinite-delivery/indefinite-quantity contracts modified after the September 8, 2009 effective date.  The FAR rule provides that if the remaining period of performance extends at least six months after the final rule effective date of September 8, and the amount of work or number of orders expected under the remaining performance period is substantial, then the contract should be modified to include the clause.

6.  What is the E-Verify clause?
The rule requires the insertion of the E-Verify clause into applicable federal contracts, committing Government contractors to use E-Verify for their new hires and all employees (existing and new) assigned to any given federal contract.

7. What is the acquisition threshold for the E-Verify Federal Contractor Rule?
The rule requires the insertion of the E-Verify clause for prime federal contracts with a period of performance longer than 120 days and a value above the simplified acquisition threshold ($100,000).

8. Does the E-Verify Federal Contractor Rule apply to subcontracts?
The rule only covers subcontractors if a prime contract includes the clause.  For subcontracts that flow from those prime contracts, the rule extends the E-Verify requirement to subcontracts for services or for construction with a value over $3,000.

9. Does the E-Verify Federal Contractor Rule extend to contracts outside the United States?
The rule applies only to employees working in the United States, which is currently defined to include the fifty States and the District of Columbia, Guam, Puerto Rico, and the U.S. Virgin Islands.

10. Does the E-Verify Federal Contractor Rule apply to existing indefinite-delivery/indefinite-quantity contracts?
Existing indefinite-delivery/indefinite-quantity contracts should be modified by Contracting Officers on a bilateral basis in accordance with FAR, to include the clause for future orders if the remaining period of performance extends at least six months after the final rule effective date, and the amount of work or number of orders expected under the remaining performance period is substantial.

11.  What types of prime contracts are exempt from the E-Verify Federal Contractor Rule?
The E-Verify Federal Contractor Rule exempts: contracts that include only commercially available off-the-shelf (COTS) items (or minor modifications to a COTS item) and related services; contracts of less than the simplified acquisition threshold ($100,000); contracts less than 120 days; and contracts where all work is performed outside the United States.

12. What is considered to be a COTS item?
A COTS item is a commercial item that is sold in substantial quantities in the commercial marketplace and is offered to the government in the same form that it is available in the commercial marketplace, or with minor modifications.

13. Are contracts for agricultural and food products exempt from the E-Verify Federal Contractor Rule?
Nearly all food and agricultural products fall within the definition of “commercially available off-the-shelf (COTS)” items.  Federal contracts for COTS items are exempt from the rule.  Federal contracts for food and agricultural products shipped as bulk cargo, but that otherwise would be considered COTS items, such as grains, oils and produce are also exempt.  Subcontracts that only provide supplies, such as food, are exempt from the rule.

14. Which employees may federal contractors verify through the E-Verify system?
Federal contractors participating in E-Verify are required to use E-Verify for: all new employees, following completion of the Employment Eligibility Verification Form I-9 (Form I-9); and all existing employees who are classified as “employees assigned to the contract.” Employees already verified through E-Verify should not be re-verified. However, an employee’s previous employment authorization through E-Verify from another employer does not satisfy the current employer’s obligation to use E-Verify once they have hired that employee. Under the rule, only those employers that win a contract or subcontract that includes the E-Verify clause may run existing employees through E-Verify.  A federal contractor must verify new hires and the employees who are assigned to the contract, and may elect to also verify their entire workforce.

15. What is an “employee assigned to the federal contract”?
The rule defines an “employee assigned to the federal contract” as any employee hired after November 6, 1986, who is directly performing work in the United States under a contract that includes the clause committing the contractor to use E-Verify.  An employee is NOT considered to be directly performing work under the contract if the employee normally performs support work – such as indirect or overhead functions – and does not perform any substantial duties under the contract.

16. Are employees working on a contract for a minimal amount of time subject to E-Verify?
The E-Verify Federal Contractor Rule does NOT exempt employees based on the intermittent nature of the work or the length of time spent performing the work.

17. Should E-Verify be used prior to making a job offer to a job applicant?
All users, including federal contractors, are PROHIBITED from using E-Verify prior to a job offer and acceptance by the applicant. E-Verify should NOT be used for pre-employment screening of job applicants, support for any unlawful employment practice, or any other unauthorized use.  Should the employer use E-Verify procedures for any unauthorized purpose, the employer may be subject to appropriate legal action and termination of its access to the E-Verify systems.

18. Does participation in E-Verify provide “safe harbor” from work site enforcement?
Using E-Verify creates a presumption that the company has not knowingly hired unauthorized aliens as illegal workers.  However, participation in the E-Verify program does NOT provide a “safe harbor” from worksite enforcement.

19. Should federal contractors verify all new employees?
The E-Verify Federal Contractor Rule requires most federal contractors to use E-Verify for all new employees, regardless whether the employees are assigned to a federal contract.

20. If employees previously confirmed as work authorized through E-Verify move to another contract in the same company, do they need to be run through E-Verify again?
Once an employee has been run through E-Verify and employment authorization has been confirmed, the employee should NOT be reverified through E-Verify again by the same employer.

Bonus: What if contractors have more questions about the E-Verify Federal Contractor Rule?
Contractors and subcontractors with more questions about the E-Verify Federal Contractor Rule may find the answers through a designated E-Verify service agent like I-9Compliance.com, an I-9/E-Verify compliance solution offered by leading pre-employment screening provider Pre-Employ.com. I-9Compliance.com helps employers maintain full I-9/E-Verify compliance, eliminate errors, reduce liability from hiring illegal workers, and ensure jobs for legal workers. To learn how to get I-9Compliance.com for FREE, visit www.i-9compliance.com/FREE/. To view a FREE webinar "E-Verify & Federal Contractors: Know The Facts" on demand, visit http://www.i-9compliance.com/On-Demand-Webinars.aspx. For more information, download a FREE white paper "15 Facts You Should Know About I-9 Compliance," visit www.i-9compliance.com, email sales@i-9compliance.com, or call 1-800-300-1821. To follow Pre-Employ.com on Twitter, visit www.twitter.com/PreEmploy.

Source: USCIS.GOV – Frequently Asked Questions: Federal Contractors and E-Verify 

USCIS Update: Federal Contractors Required to Use E-Verify Beginning September 8, 2009

tahearn@i-9compliance.com

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