E-Verify & I-9 News

The legal wrangling over the federal contractor implementation date appears to be coming to its final(?) end as the U.S. Court of Appeals for the Fourth Circuit has now also denied the plaintiffs’ motion for an injunction to stop the E-Verify federal contractor rule’s implementation. According to court documents, plaintiffs filed this motion with the appeals court on Friday, the government responded on Sunday, and this latest denial order was just filed today.

The next legal obstacle is the extension of the E-Verify program itself, which is set to expire in three weeks (September 30, 2009) unless Congress takes action to continue its funding. Earlier this year, both houses proposed extending the E-Verify program as part of the fiscal year 2010 DHS appropriations bill. The House version proposed a two year extension, while the Senate, led by Senator Jeff Sessions, proposed a permanent reauthorization along with a requirement that federal contractors and subcontractors use the system for all new hires and employees assigned to a contract. Given the disparity between these proposals, the actual provisions will need to be reconciled and approved in the coming weeks.

With the E-Verify Federal Contractor Rule now in effect, the USCIS has released a supplemental guide for federal contractors which provides a basic outline of the rule, associated deadlines, enrollment options, exemptions, and other information. The supplemental guide and the E-Verify User Manual for Federal Contractors can be downloaded from this USCIS web page.

Most of the information in these new guides comes from previously published FAQs and webinars hosted by DHS. In a few instances, however, the USCIS has answered some lingering questions (while also leading us to a few more). In today’s blog, we’ve selected the most interesting revelations from the federal contractor supplement while identifying some unresolved issues. For more information on any of these topics, check out the supplemental guide (22 pages) available in the link above. It’s also best to discuss these issues with your legal counsel to properly plan your organization’s E-Verify roll-out.

Covered Contracts and Enrollment

How do I know if my organization has (or will have) a qualifying contract? This has been one of the most frequently voiced questions, and the guide makes it very clear that “your government contracting official, not the E-Verify program, determines whether your contract will include the FAR E-Verify clause. You should review your contract for the FAR E-Verify clause, and check with your government contracting official if you have questions.” While this may be comforting to know, it still doesn’t help organizations plan for the future. A helpful rule of thumb for some organizations: not all contracts with the government (even those meeting the threshold) are covered by this rule. The E-Verify requirement will only apply to certain “procurement” contracts (i.e., the government is buying products or services from an organization).

Assuming my company is awarded a covered contract, how do I designate it as such in the E-Verify system? The guide provides: “Once your company is awarded a Federal contract that includes the FAR E-Verify clause, you must designate your company as a Federal contractor in E-Verify.” The interesting part here though is the next sentence which indicates “[y]ou should not do so until you officially receive a qualifying Federal contract.” As explained below, the primary reason for waiting is that your deadlines for verifying existing employees depends upon your organization’s enrollment (or designation) as a federal contractor.

Contractor and Subcontractors

The guide affirmatively states that prime contractors are not responsible for verifying the subcontractors’ individual employees. However, the prime contractor must, by whatever means the contractor considers appropriate, ensure that all covered subcontracts at every tier incorporate the E-Verify clause and that all subcontractors use the E-Verify system. This requirement was alluded to in the commentary portion of the regulations, but unfortunately, it’s still not very clear, especially with respect to a prime contractor’s liability for ensuring the continued use of E-Verify by covered subcontractors. At a bare minimum, it seems that prime contractors should request proof that their covered subcontractors have enrolled in E-Verify. See our prior post on how to document an employer’s participation in E-Verify.

The guide also mentions that subcontractors may designate the prime contractor as its designated agent for ensuring E-Verify compliance. While this would help prime contractors ensure that subs are following the rules, it may be overly burdensome to the prime contractor, both in terms of the time needed to perform the verification queries as well as the liabilities under the designated agent MOU.

Submitting Form I-9 information for Existing Employees

The guide presents two options for entering Form I-9 information into E-Verify for existing employees: (1) the employer can complete new I-9 forms for all employees or (2) employer can carefully examine and review previously completed I-9s with the employees to determine if a new form is needed or if the form can be updated. Clearly, the USCIS seems to think that option 1 is easier because “the process is the same as the process for newly hired employees” whereas option 2 may only be appropriate if you have few employees and/or sufficient resources to determine if a new Form I-9 is needed or existing ones must be updated.

For employers choosing option 2, the guide also explains situations when a new Form I-9 must be completed. These include when the employee

• Presented an expired document on a previous Form I-9 that allowed for such documents;
• Is an alien whose employment authorization as stated in Section 1 of Form I-9 has expired;
• Presented a List B document that did not have a photo when he or she completed the previous Form I-9;
• Presented a List B document on a previous Form I-9 and you are unable to determine if that document had a photo;
• Was at the time of attestation a Noncitizen National of the United States and was unable to attest to his or her correct status in Section 1 of Form I-9 with a revision date before 02/02/09;
• Had a change in his or her immigration status;
• Changed his or her name; or
• Completed his or her previous Form I-9 and it did not comply with Form I-9 requirements at the time of completion.

Deadlines

Throughout the guide, we’re told that the deadlines for verifying existing employees  is within 90 days or 180 days depending upon the election. The question still remains: do all existing workers have to be verified by those deadlines? Or does the employer simply need to start verification within that timeframe? In section 3.5 of the guide, the language seems to favor the former when it indicates the employer must “verify all existing employees assigned to a contract within 90 calendar days of enrollment OR within 30 calendar days of employee’s assignment to a contract, whichever is later.”

Finally, it’s important to note the timeline for employers already enrolled in E-Verify. The guide makes it clear that employers already using E-Verify have 30 days after contract award to update their company profile to designate themselves as a federal contractor. Prior guidance was inconsistent as to whether existing E-Verify-enrolled employers were afforded this extra time. The key take-away here: avoid updating your profile until absolutely necessary to give your organization as much time as possible to E-Verify existing employees.

In another victory for DHS, the U.S. District Court for the District of Maryland has denied the plaintiffs’ emergency motion which sought to suspend the E-Verify Federal Contractor requirement pending appeal. In the Order filed today, the Court agreed with the government on all points, finding that the plaintiffs had not met their burden of showing a likelihood of success in the appeal; failed to show the irreparable harm caused to its members; and did not justify a further delay. The Court also agreed with the government that “granting the injunction, which would reverse the Executive Order of two Presidents for the benefit of private subcontractors, is not in the public interest.”

The entire order is provided below.

The remaining legal challenge to the E-Verify federal contractor rule now rests with the 4th Circuit Appeals Court, which is not likely to render a decision any time soon. Stay tuned next week as we anticipate receiving more guidance from DHS on the September 8, 2009 E-Verify federal contactor effective date.

This week’s I-9 and E-Verify “question of the week” concerns the E-Verify federal contractor requirements as applied to a multi-entity organization. To pose a question for next week’s blog, visit our Ask a Question page and fill-in the form provided.

Today’s question comes in two parts:

1. If a subsidiary is awarded a federal contract, can the parent company (which is the company that signed up for e-verify and entered into the MOU but has a different FEIN from the subsidiary) e-verify all of its current employees and those of its other subsidiaries, even if the parent and the other subsidiaries do not hold federal contracts?

2. What if an employee of a subsidiary that is not a federal contractor is assigned to perform work for a subsidiary that did sign a contract (but the employee is not transferred to/employed by the contracting subsidiary)?

Let’s discuss the first part: the regulations amending the FAR (Federal Acquisition Regulation) do not specifically address the issue of whether separate but related legal entities may use E-Verify for their entire workforce when only one company has a qualifying contract. The commentary portion of the rule does mention a similar scenario though, in addressing the issue of whether subsidiaries must use E-Verify for existing employees when the parent holds the contract, but the subsidiaries do not. In particular, the FAR council writes:

Whoever signs a contract is the contractor. Only the legal entity that signs the contract and is bound by the performance obligations of the contract is covered by this E-Verify term. If ambiguity remains, this issue will have to be handled on a case-by-case basis consistent with traditional FAR principles.

This reasoning would seem to indicate that this first scenario is not permissible, since the parent company (and its subsidiaries) are not a party to the contract, and thus under the MOU, they cannot use E-Verify for existing employees. On the other hand, E-Verify representative have told us that a parent company can register using one account and include all related companies as hiring locations. Since many companies have been doing this, they may need to change this policy so related companies are not all given federal contractor status.

The second part of the question addresses the situation when an employee of a subsidiary that is not a federal contractor is assigned to perform work for a subsidiary that is, and there is no employee-transfer involved. Following the logic above, it would seem that this employee cannot be run through E-Verify since his employer is not a federal contractor. Once again, the regulation is silent on this issue, but the commentary portion provides some insight. When asked whether the requirement to E-Verify new hires could be applied only to locations that are engaged in the contract, the Council responded:

If the requirement were limited only to new hires at locations doing Government work, the rule would be impractical and too easy to undermine by transferring employees from noncontracting work sites to contracting work sites. Not all hires of a contractor are hired through the location where they work. It is very common for a contractor to hire through a central site that has no connection to various work sites.

Although this comment addressed a different issue, it is possible that the government may take a similar stance that the employee should be run through E-Verify, even though his direct employer is not a federal contractor. Remember, this whole rule came about from President Bush’s Executive Order, which mandated that federal contractors should have a legal workforce to promote efficiency and reliability in federal government procurement. Allowing this one employee to escape the requirement simply because he is technically employed by a non-contracting entity would seem to undermine the intent of the rule.

These are complex issues and the law/requirements surrounding this rule are constantly evolving. We’ll be sure to provide further updates and clarification on this issue as guidance becomes available.

Disclaimer: Although our bloggers are legal experts in the field, these answers should not be construed as direct legal advice. Your specific employment situation may involve facts and complications unknown to us. For specific issues and questions regarding I-9 and E-Verify compliance, please contact your immigration or employment counsel.

Today, the Department of Homeland Security (DHS) filed a response with the U.S. District Court in Maryland opposing plaintiffs’ emergency motion for an injunction against the E-Verify federal contractor rule. As reported on Tuesday, the plaintiffs, U.S. Chamber of Commerce and other business organizations, have appealed the district court’s ruling on the E-Verify federal contractor rule while simultaneously asking the court to halt the impending effective date until the appeal is decided.

In its reply brief filed today, the government calls the plaintiffs’ motion for an injunction an “extraordinary and drastic remedy” which does not meet the standard set out by the Supreme Court. Here is a summary of the government’s main arguments against the motion. The entire brief is available below.

1. The plaintiffs’ appeal is not likely to succeed because the District Court methodically examined each issue in the original suit and found each to be without merit. The government also points out that the issues in this case have been decided in other circuits (namely, the D.C. Circuit and Ninth Circuit), and so the plaintiffs’ argument that this is an issue of first impression is not persuasive.

2. No irreparable harm to plaintiffs because (a) contractors will likely bill back any monetary damages back to the Federal Government; and (b) plaintiffs can simply refrain from doing business with the government.

3. An injunction would cause irreparable harm to the government and the public interest since an appeal could take months or even years, during which time the reliability of government procurement would continue to suffer.

4. The ongoing legislative proposals in Congress would involve a same or similar result as the rule, and thus either way, the use of E-Verify will likely be mandated.

A new E-Verify help document is now available online through the E-Verify web site which provides instructions on how to prove that your company (or more accurately, your organization) participates in E-Verify. Presumably, the USCIS is anticipating that federal contractors may need to demonstrate their enrollment in E-Verify by providing some form of proof to a contracting officer. Likewise, subcontractors may need to do the same to ensure their prime contractors that they are abiding by the E-Verify clause.

The actual document is available below. Essentially, it instructs an organization to print-out the Company Information screen from E-Verify. It’s unclear whether this is a final document, but hopefully we’ll receive additional guidance next week.

Today, the United States Citizenship and Immigration Services (USCIS) reminded federal contractors and subcontractors of the new regulations going into effect on September 8, 2009. The announcement (dated September 1, 2009) explains that the E-Verify federal contractor rule extends use of the E-Verify system to covered federal contractors and subcontractors, including those who receive American Recovery and Reinvestment Act funds.  Under the rule, applicable federal contracts awarded or amended on or after September 8 must include a clause committing government contractors to use E-Verify.

The notice also provides the latest E-Verify enrollment statistics: “More than 145,000 participating employers at nearly 550,000 worksites nationwide currently use E-Verify to electronically verify their workers’ employment eligibility. Since Oct. 1, 2008, more than 7.6 million employment verification queries have been run through the system and approximately 97 percent of all queries are now automatically confirmed as work-authorized within 24 hours or less.”

The U.S. Chamber of Commerce and other business organizations have filed an appeal with the U.S. Court of Appeals for the Fourth Circuit seeking to overturn the Maryland District Court’s decision last week in favor of the E-Verify Federal Contractor Rule. Since the appeal will take some time to decide, the plaintiffs have also filed an emergency motion with the district court for injunctive relief to maintain the status quo of E-Verify while the appeal is under consideration.

In their emergency motion, the plaintiffs argue that blocking the rule’s implementation while an appeal is pending is appropriate due to the impending effective date (September 8, 2009) and other “good cause” factors which satisfy the court’s four-factor test. In particular, plaintiffs argue that their motion should be granted because (1) they are likely to succeed on the merits of the appeal; (2) the plaintiffs’ members will be irreparably harmed by significant E-Verify start-up costs; (3) the delay will not harm the defendants who have also prolonged the implementation; and (4) a delay is in the interest of the public, especially considering the likelihood that the issue may be resolved by legislative action when Congress returns from recess.

It’s unclear at this time how quickly the court will rule on the emergency motion. We will keep you posted of further updates regarding both the appeal and the emergency motion as they become available.

In anticipation of the E-Verify federal contractor mandate, the USCIS will be releasing a Supplemental Guide to address specific E-Verify requirements and time periods for federal contractors and subcontractors who are impacted by the rule. The E-Verify Tutorial (available online to E-Verify participants) already makes reference to this document (see image to the right), which will be located in the Online Resources section of your E-Verify account. We’ll make sure to publish this document on our blog as soon as it’s released.

In the meantime, the E-Verify refresher tutorial provides instructions for employers who are already enrolled in E-Verify on how to notify DHS that they are a federal contractor. We’re reproducing some of these instructions below. Of particular interest, is that employers are not required to sign a new MOU.

1. You must update your profile to indicate that you are a Federal contractor. As a Federal contractor, you will be subject to the new Memorandum of Understanding (MOU), which includes language on the verification of “employees assigned to the contract.”

2. If you are already participating in E-Verify, you are not required to sign the new MOU. However, once you have indicated that you are a Federal Contractor in E-Verify, you will be subject to the rules and requirements associated with this profile and have access to all materials specific to Federal Contractors (and verification of “employees assigned to the contract”).

3. If you modify your organization type to and from “Federal Contractor” on the company information page, it will affect your users who are in the process of taking the tutorial. These users will be redirected to and must start over with the appropriate tutorial. Also, if you modify your organization type to a non-Federal Contractor value, existing employees must not be verified.

This is the first in a new series of blog posts which will address and answer your questions regarding Form I-9 and E-Verify compliance. To pose a question, visit our Ask a Question page and fill-in the form provided. We’ll select the best question each week and provide an answer on this blog.

Our first question comes from a technical recruiter who is concerned about using E-Verify for existing employees who are on a covered contract. Here is a summary of the question, which has two parts:

Question: Since the new I-9 (February 2nd and August 7th editions) have different rules for acceptable documents (e.g., expired documents, such as US passport are no longer allowed) , will we have to do a new I-9 for those employees that are on a covered contract? We’re currently using E-Verify for new hires, but how long do we have to be compliant to have all existing employees in the system?

Answer: Once you’ve been awarded a federal contract or subcontract with the E-Verify clause, you will have a choice regarding existing employees: you can use E-Verify for just those that are working on the covered contract OR you can elect to use E-Verify for your entire workforce (if, for example, it’s too burdensome to make the determination of who is on the contract). In either case, you can use a previously completed I-9 form (even one with expired documents) as the basis for the E-Verify query as long as it meets certain requirements that are outlined in the E-Verify MOU. These include: it must be complete (including the SSN); if you accepted a list B document on the old I-9 form, it must be a type which has a photo; if you accepted a green card or EAD, you must have a photo copy of it; and the employee’s work authorization must still be valid. In addition, the MOU indicates that employers must review the old Form I-9 either in person or in communications with the employee to ensure that the employee’s stated basis in section 1 of the Form I-9 for work authorization has not changed.

As for the timing, since you are already using E-Verify, you will have 90 days to initiate verification queries for current employees after you are awarded a covered contract. For those not currently using E-Verify, they get 30 days to enroll and then 90 days from E-Verify enrollment (total of 120 days). Lastly, if you intend to choose the entire workforce option, you have 180 days from election of that option to verify all existing employees hired after November 6, 1986.

Disclaimer: Although our bloggers are legal experts in the field, these answers should not be construed as direct legal advice. Your specific employment situation may involve facts and complications unknown to us. For specific issues and questions regarding I-9 and E-Verify compliance, please contact your immigration or employment counsel.