eTrends - E-Verify Requirement Delayed Until June 30, 2009

For the third time in just over five months, the federal government has announced that it will delay implementation of the November 13, 2008 final rule requiring certain federal contractors to use the E-Verify system to verify the employment eligibility of all new hires and all persons assigned to perform work within the United States on federal contracts. Unless the new administration announces otherwise, the final rule will become effective June 30, 2009, and will apply to solicitations issued and contracts awarded after that effective date that include the E-Verify clause.

E-Verify is an internet-based system operated by the Department of Homeland Security (DHS) and U.S. Citizenship and Immigration Services (USCIS) that allows employers to verify the employment eligibility of their employees, regardless of citizenship. Based on the information provided by the employee on his or her Form I-9, E-Verify checks the information electronically against records contained in DHS and Social Security Administration databases.

Generally, under the final rule, federal contractors are required to enroll in E-Verify if they are awarded a contract or a subcontract that requires participation in E-Verify as a term of the contract. Additionally, the final rule also applies to certain existing indefinite-delivery/indefinite-quantity contracts which are modified after the effective date to include an E-Verify clause for future orders if the remaining period of performance extends at least six months from the effective date, and the amount of work or number of orders expected under the remaining performance period is "substantial" (according to the federal agencies, the interpretation of "substantial" will be within the discretion of the contracting officer). However, the final rule only applies to federal contracts that involve work in the United States, are worth at least $100,000, and are for a period of performance of at least 120 days. The rule also covers subcontractors if the contract is worth $3,000 or more and flows from a prime contract subject to the E-Verify requirement. The final rule exempts contracts where all work is performed outside of the United States, contracts worth less than $100,000, contracts where the period of performance is less than 120 days, and contracts that include only commercially available off-the-shelf (COTS) items and related services.

Smith Anderson will continue to keep you updated on developments regarding the E-Verify requirement. In the meantime, for more information regarding E-Verify, including a copy of USCIS’s Frequently Asked Questions, please visit

For more information, please contact Kimberly J. Korando or J. Travis Hockaday

Employment, Labor and Human Resources

Employee Benefits and Compensation

Environmental Health and Safety

Government Contracting


  • Alicia A. Gilleskie
  • Frederick R. Zufelt

Smith Anderson publishes eTrends periodically as a service to clients and friends. The purpose of this eTrends is to provide general information about a significant legal development in the field of employment law. Readers should be aware that the facts may vary from one situation to another, so the conclusions stated herein may not be applicable to the reader’s particular circumstances.

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