Maryland Bar Bulletin
Publications : Bar Bulletin : January 2010

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 BAR BULLETIN FOCUS: LABOR/EMPLOYMENT LAW  

As of September 8, 2009, all current or prospective federal contractors awarded federal contracts which contain Federal Acquisition Regulation 1.108(d)(3) (FAR) must participate in the E-Verify program as a term of the contract. E-Verify is an Internet-based computer system administered by the Department of Homeland Security through the U.S. Citizenship and Immigration Service (UCIS). E-Verify allows employers to confirm the legal status of employees within seconds through the use of information submitted by employees on their I-9 forms.

E-Verify – previously known as the voluntary Basic/Pilot/Employment Eligibility Verification Program – was first implemented in 1997 as one of three pilot programs created under the Illegal Immigration Reform and Immigrant Responsibility Act of 1996. It allows comparison of records contained in Social Security Administration (SSA) and UCIS databases with information submitted by employees on their I-9 forms to help employers verify the identity and employment eligibility of newly hired employees.

While employer participation in E-Verify remains voluntary for most employers, as of September 8, 2009, FAR 1.108(d)(3) requires insertion of the E-Verify clause into prime federal contracts whose contract period of performance is more than 120 days and which have a value above the simplified acquisition threshold of $100,000. The rule also extends the E-Verify requirement to subcontracts for services or construction with a value over $3,000. Under FAR 1.108(d)(3), existing indefinite delivery and  indefinite quantity contracts must be modified on a bilateral basis to include the E-Verify requirement for future orders if the remaining period of performance extends at least six months after the final rule effective date, and the anticipated number of remaining orders or work is substantial.

Employers required to utilize E-Verify have 30 days from the date of contract award to enroll in the program and 90 days from the date of enrollment to initiate verification queries for existing employees tasked to service the contract and to begin to use the system to verify the eligibility of newly-hired employees. After the conclusion of the 90-day phase-in period, obligated employers are required to initiate verification of each newly-hired employee within three business days after their start date, regardless of whether the new employee is tasked to perform work on a federal contract.

Certain prime federal contracts are exempted from the E-Verify requirement under FAR 1.108(d)(3). For instance, contracts that include only commercially available off-the-shelf items (COTS) are specifically exempt. Contracts below the simplified acquisition threshold ($100,000) are exempt and contracts with a period of performance less than 120 days are exempt. Finally, contracts where work is to be performed outside of the United States are exempt.

Exceptions to the requirement that all newly-hired employees be verified also exist for certain employers. Federal contractors who are state and local governments, governments of federally-recognized Native American tribes, and sureties performing under a takeover agreement entered into with a federal agency pursuant to a surety bond, need only conduct E-Verify queries on employees assigned to covered federal contracts.

Employers can register for participation in E-Verify by visiting the USCIS webpage at www.uscis.gov. Employers will be required to provide basic information and sign a Memorandum of Understanding that provides the terms of agreement between the employer and USCIS. Once an employer’s application information has been reviewed, an employer account will be activated and login information will be forwarded by e-mail.

Employers also have the option of using E-Verify to verify the identity and employment eligibility of their entire workforce. This can be done by updating the employer’s profile on the E-Verify system. Once the update has been completed, an employer choosing to verify their entire workforce will have 180 days to initiate employee verification queries for all their employees. Employers should be aware that the use if E-Verify prior to a job offer and acceptance is prohibited and that the use of E-Verify does not create a “safe harbor” from Department of Homeland Security worksite enforcement. It does, however, create a rebuttable presumption that an employer has not knowingly hired an unauthorized alien. It should also be noted that many states (although Maryland is not yet among them) have adopted legislation that requires certain employers to utilize E-Verify. For this reason, employers who conduct business outside the state of Maryland should beware that although they may not fall within the current federal requirement to utilize E-Verify, a particular state’s laws may compel their participation.

Failure to participate as required in E-Verify can potentially result in civil and criminal penalties, as well as debarment from participation in federal contracts. For this reason, employers should pay close attention to compliance. Employers with questions about when and if E-Verify should be utilized should consult the Memorandum of Understanding on the E-Verify system which sets forth the specific terms of use. Additional information can also be found on the government’s U.S. Citizenship and Immigration Services website, www.uscis.gov.

David A. Burkhouse is an attorney with the law firm of Hodes, Pessin & Katz, P.A. He is based in the firm’s Columbia office, where he primarily practices labor and employment and education law.


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Publications : Bar Bulletin: January 2010

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