Compliance by Federal Contractors with the E-Verify System Became Mandatory Effective September 8, 2009

As most Denver businesses with federal contracts know, effective September 8, 2009, compliance with the free E-Verify internet-based system, formerly voluntary, became mandatory. The rule applies if the prime contract for services or construction is more than $100,000 with a period of performance longer than 120 days. For subcontractors, the value of services or construction must exceed $3,000.
Contractors and subcontractors are required to register with E-Verify within 30 days of the contract award date. The system, which facilitates compliance with federal immigration laws, requires that employers run new hires, whether or not employed on a federal contract, and existing employees directly working on these contracts, through the E-Verify system to determine the person’s eligibility to work in the U.S.
E-Verify compares the information on the individual’s Employment Eligibility Verification Form (I-9) against federal government databases to verify work eligibility. The E-Verify system is operated by the Department of Homeland Security in cooperation with the Social Security Administration. Applicable government contracts must have an E-Verify provision in the contract document. Penalties for non-compliance with the system’s mandatory requirements range from fines to criminal penalties and loss of eligibility to complete or bid on applicable federal government contracts.
The U.S. Chamber of Commerce and various industry associations filed a suit in a Maryland federal court, mounting serious legal challenges to the validity of the system, but the court upheld the system.
It would be prudent for prime contractors to have a provision in their subcontracts for mandatory compliance by subcontractors with the E-Verify system. Affected Colorado contractors should feel free to contact this office or their existing counsel for advice concerning the E-Verify system.