For further information regarding federal contractors' obligations under E.O. 12989, please see our June 25, 2008 Alert.

Effective immediately, all federal contractors are required to use E-Verify, an Internet-based system operated by the U.S. Department of Homeland Security (DHS) and the Social Security Administration, to electronically verify the immigration status/employment eligibility of new employees. E-Verify is a free and, until recently, voluntary way to determine the employment eligibility of new hires and the validity of their Social Security Numbers. However, as of June 6, 2008, when President Bush amended Executive Order (E.O.) 12989, federal contractors' use of E-Verify is mandatory.

The original E.O. 12989, signed by President Clinton on February 13, 1996, stated that a government contractor who violated the Immigration and Naturalization Act's prohibition on hiring illegal or undocumented aliens could be "debarred," i.e. lose its current government contract and be shut out from future contracts during the debarment period. The newly amended E.O. 12989 goes a step further, requiring all federal contractors to use the E-Verify system to ensure that "all persons hired during the contract term by the contractor to perform employment duties within the United States" are authorized to work in the United States. This requirement appears to extend to all newly-hired employees of federal contractors, not just employees hired to work on the government contract. In addition, the Executive Order requires the contractor to use an electronic verification system to verify the employment eligibility of "all persons assigned by the contractor to perform work in the United States."

As currently designed, the DHS E-Verify system may be used only for newly-hired employees; however, pending legislation would expand the program to cover current employees.

It is important to note that federal contractors must still take care to avoid discriminating against applicants and employees whom they suspect might be undocumented workers — various laws prohibit discrimination based on citizenship status and national origin. Accordingly, contractors may not single out or otherwise treat individuals differently because they are foreign born, are "foreign-looking," are "foreign-sounding," or have "foreign sounding names." All individuals must be treated in the same way during the part of the hiring process in which work authorization documentation is produced and inspected.

Not yet clear is how the amended E.O. 12989 will impact state efforts to prohibit use of E-Verify until the system has been proven accurate. We will continue to monitor this evolving area of the law. If you have any questions regarding E-Verify, please contact any member of the Labor and Employment Group.