The Department of Homeland Security (DHS) has published the long-awaited final rule on the use of E-Verify by federal contractors and subcontractors, which will take effect starting Jan. 15, 2009. The substance of the rule is mostly the same as what was initially proposed in June 2008, although the DHS has limited its overall use by stipulating that it will only apply to federal contracts with a period of performance longer than 120 days and value above $100,000. As before, it will not apply to contracts for commercial off-the-shelf items (those offered to the government without modification, in the same form in which they are sold in the marketplace).

Those employers affected by the rule will need to use E-Verify for all new hires as well as existing employees who will directly perform work under the federal contract. Companies awarded a contract with the federal government will be required to enroll in E-Verify within 30 days of the contract award date. Within 90 days from the date of enrollment, contractors must begin to initiate verification queries for employees already on staff who will be working on the contract and begin using the system to verify newly hired employees.

The following is a summary of some of the main points of the final rule:

• The final rule amends the Federal Acquisition Regulation and requires Federal contractors to use E-Verify for all new hires as well as existing employees who will directly perform work under the federal contract.
• 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).
• 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.
• 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 enroll in the E-Verify program within 30 calendar days of the contract or subcontract award date.
• Within 90 days from the date of enrollment, contractors must begin to initiate verification queries for employees already on staff who will be working on the contract and begin using the system to verify newly hired employees.
• Institutions of higher education, state and local governments, and Indian tribes will be only be required to E-verify existing or new employees assigned to work under a federal contract; they do not have to use E-Verify to verify the work eligibility of all new hires.
• 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.

The United States Citizenship and Immigration Services (USCIS) has posted a Fact Sheet which provides more information. The entire rule is available for viewing on the Federal Register Web site in PDF format.