Client Bulletin #392


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Federal contractors will soon be required to use E-Verify to check employment eligibility of all persons hired during the terms of federal contracts and all persons performing work in the United States under the contracts.

Last week, President Bush amended Executive Order 12989 to include a requirement that all federal departments and agencies require their contractors, as a condition of each federal contract, agree to use an electronic employment eligibility verification system. The Secretary of the Department of Homeland Security was to select the method of verification. On Monday, DHS Secretary Michael Chertoff designated E-Verify as the system that must be used.

Presumably, the rule will take effect after regulations are issued. Proposed regulations are expected imminently.

It is hoped that the regulations will address a number of (so far) unanswered questions:

• Does the Executive Order apply to existing federal contracts, or only to those federal contracts entered into after its effective date?

• Are federal subcontractors, in addition to first-tier contractors, covered? Because the Executive Order states that it applies to all persons assigned to perform work on the contract, it would appear to include subcontractors’ employees. Secretary Chertoff declined to address whether subcontractors would be covered, saying merely that DHS “would have to issue rules to implement the order.”

• Does the Executive Order apply to all employees of a contractor, or only those employees performing work on government contracts? The language implies that all employees of a contractor are covered.

In making its announcement, DHS noted that more than 69,000 employers are currently using the E-Verify system and that new employers are signing up to use E-Verify at the rate of about 1,000 per week.

Constangy will continue to monitor this issue and will issue further updates when the regulations are finalized. In the meantime, if you have questions about this Executive Order, please contact a member of Constangy’s Immigration or Affirmative Action practice groups or the Constangy attorney of your choice.
Constangy, Brooks & Smith, LLC has counseled employers, exclusively, on labor and employment law matters since 1946. The firm represents Fortune 500 corporations and small companies across the country. More than 100 lawyers work with clients to provide cost-effective legal services and sound preventive advice to enhance the employer-employee relationship. Offices are located in Georgia, South Carolina, North Carolina, Tennessee, Florida, Alabama, Virginia, Missouri, and Texas. For more information about the firm's labor and employment services, visit, or call toll free at 866-843-9555.

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