This post was written by Irene M. Recio and Lorraine M. Campos.

The Federal Acquisition Regulation (“FAR”) provision requiring Federal contractors to use the E-Verify System became effective on September 8, 2009, following nearly a year of litigation. The E-Verify System is a free internet-based program operated by the U.S. Department of Homeland Security, U.S. Citizenship and Immigration Service (“CIS”) that allows employers to verify the employment eligibility of new hires. All federal contracts awarded and solicitations must now include a clause mandating the use of E-Verify for all new employees, as well as all employees who perform work on the contract during the contract period except those who perform support work such as indirect or overhead functions. Institutions of higher education, state and local governments, and governments of federally recognized Native American tribes need verify only those employees who are assigned to a covered Federal contract, rather than all newly hired employees.

The Final Rule exempts contracts that are for less than $100,000 or fewer than 120 days in duration. The Rule also exempts contracts where all work is performed outside the United States or those for commercially available off-the-shelf items (“COTS”), including nearly all food and agricultural items. Subcontractors to federal contractors are also required to use E-verify, as the Rule extends the E-Verify requirement to subcontracts for services or construction with a value of more than $3,000. It will also apply to existing indefinite-delivery/indefinite-quantity contracts if the remaining period of performance extends at least six months after the Rule’s effective date of September 8, 2009.

For employers not covered under the new Rule, E-Verify continues to be a voluntary program.