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Executive Order 12989: New Requirements for Federal Contractors -- E-Verify

Posted By Merritt J. Green, Tuesday, August 12, 2008

Executive Order 12989: New Requirements for Federal Contractors

Merritt J. Green
General Counsel, P.C.
On June 6, 2008, President Bush amended Executive Order 12989, which, when the proposed rules become finalized, will require federal contractors to use E-Verify to confirm the employment eligibility of all new hires to existing federal contract projects and all existing employees already assigned to contract projects. E-Verify is a no-cost Internet-based system operated by the Department of Homeland Security (“DHS”), along with the Social Security Administration (“SSA”), that allows employers to instantaneously check the employment eligibility of their employees by inputting the information from their completed I-9 forms.  The eligibility determination is then made based on the employee’s information being checked against the DHS and SSA databases.  Prior to the amendment, federal contractors could voluntarily participate in the E-Verify program, however this change to a mandatory requirement could potentially affect as many as 1 million workers, according to DHS Secretary Michael Chertoff.

Six days after the Executive Order was issued, DHS proposed a series of rules to implement the new amendment.  The rules are required to be open to public comment until August 11, 2008, but federal contractors should be aware of and prepare for the new obligations that they will likely face.  The proposed rules require that all federal contractors performing work in the United States, within 30 days of being awarded a contract, must enroll in E-Verify.  Once enrolled, an additional 30 days is given to use the program to verify the employment eligibility of employees assigned to the federal contract.  E-Verify must then be used for all new hires and all currently-employed employees who are subsequently assigned to work on the contract.  The rules do allow for all employees hired before November 6, 1986 to be exempt from having to be screened through the new system.  The verification process must be completed by the contractor within three days of the new employee’s hiring or their assignment to a contract.     

            It should be emphasized that the E-Verify system cannot be used by employers to screen potential employees.  The earliest point at which an employer can seek to verify the employment eligibility is after an employee has accepted a position and completed an I-9 Form.  Employers must also notify their employees and any applicants of their enrollment in the E-Verify program. 

             Employers that want to enroll in E-Verify must register online and then enter into a Memorandum of Understanding (MOU) with the DHS and SSA.  This MOU should be carefully reviewed by all contractors as it requires employers to abide by current legal hiring practices, ensure that E-Verify will not be used to discriminate against employees, and provides for the increased government access to employer records.  Also included in the MOU are provisions relating to:

  • If an employee receives a notice of mismatch (also known as a “tentative non-confirmation”), the employer must promptly provide the employee with information about how to challenge the tentative non-confirmation, including a written notice generated by the E-Verify system;
  • If the employee wishes to challenge the tentative non-confirmation, the employer must provide a referral letter generated by E-Verify with specific instructions that must be followed;
  • Employers are prohibited from taking adverse action against the employee for contesting the tentative non-confirmation; and
  • The Employee must be given up to eight federal government work days to contact the appropriate agency to challenge the tentative non-confirmation.

Finally, a federal contractor may fire an employee based upon the E-Verify system only if the employee has contested a tentative non-confirmation and received a final non-confirmation or if the employee does not choose to contest the tentative non-confirmation.

These proposed rules are not yet final, and may include substantive changes following the closing of the public comment period.  Additionally, once the rules become final and published there will be a 30-day period before they are effective.  Enrollment in E-Verify is still voluntary, but federal contractors that are not already enrolled in the program are encouraged to read the MOU and become familiarized with the E-Verify requirements and procedures. 

This article is meant to be a guide for the amendment to Executive Order 12989.  Specific advice and consultation can be arranged by contacting General Counsel, P.C. at 703-556-0411 or

Tags:  E-Verify 

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