Immigration enforcement against federal contractors just got more teeth. On Friday, June 6, 2008, President Bush amended Executive Order 12989 ("the amended EO"), first issued in 1996 by President Bill Clinton. As amended, EO 12989 requires all federal contractors to verify the employment eligibility of their workforce through the use of a Department of Homeland Security ("DHS") approved electronic employment verification system.
The new requirements will be effective after publication of the implementing rule in the Federal Register and a 60-day comment period. Publication in the Federal Register is expected in the next two weeks.
On Monday, June 9, 2008, the DHS Secretary Michael Chertoff designated E-Verify, operated by the U.S. Citizenship and Immigration Services in partnership with the Social Security Administration, as the electronic employment eligibility verification system that all federal contractors must use as required by the amended EO. In announcing the DHS designation Secretary Chertoff said:
"A large part of our success in enforcing the nation's immigration laws hinges on equipping employers with the tools to determine quickly and effectively if a worker is legal or illegal. E-Verify is a proven tool that helps employers immediately verify the legal working status for all new hires."
Prior to the amendment, EO 12989 stated that "contracting agencies should not contract with employers that have not complied" with the Immigration and Nationality Act ("INA"). There was no federal mandate on how compliance was to be achieved. However, the amended EO now states:
"Executive departments and agencies that enter into contracts shall require, as a condition of each contract, that the contractor agree to use an electronic employment eligibility verification system designated by the Secretary of Homeland Security to verify the employment eligibility of: (i) all persons hired during the contract term by the contractor to perform employment duties within the United States; and (ii) all persons assigned by the contractor to perform work within the United States on the Federal contract." Italics added.
Under the amended EO, all federal contractors are required to verify all new employees hired during the contract term "to perform employment duties within the United States" and not just employees hired to work on the subject federal contract worksite. Further, the amended EO also requires the federal contractor use the DHS approved electronic employment eligibility verification system to verify the employment eligibility of "all persons assigned by the contractor to perform work within the United States" on the federal contract project. This language appears to extend to subcontractors and their employees that are "assigned by the contractor" to perform work on the jobsite.
The amended EO will have unforeseen consequences for federal contractors including, but not limited to, increased costs of recruitment, loss of an otherwise qualified workforce, and increased risk of a worksite enforcement action. There are also numerous questions that remain unanswered at this point. For example, are manufacturers and vendors that supply material to federal contractors and their sub-contractors required to enroll in E-Verify? Only time will tell how the federal government will apply the amended EO.
In the meantime, federal contractors should consult with legal counsel to fully understand how enrollment in E-Verify may affect their company and its owners, officers, and employees. Conducting a self-audit of Employment Eligibility and Verification forms (I-9) now may assist the federal contractor in identifying problem I-9s and undocumented workers. Federal contractors may also find that enrollment in E-Verify may expose them to greater risk than simply opting out of the federal contract procurement system altogether.
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