E-verify Rule Finalized with Small Business Concessions

Nov 18, 2008

The Federal Acquisition Regulation (FAR) Council finalized a rule on November 14 to require federal contractors and subcontractors to participate in the Homeland Security Department’s E-Verify system. The system is used to check the eligibility of employees to work in the United States.

The final rule made some concessions to ease the burden on the small business community and to allow more time for compliance. The final rule raises the threshold for covered contracts to $100,000, up from $3,000. It allows a contractor 90 calendar days, rather than 30 days as previously proposed, from enrollment to use the system. It also sets a deadline of 30 calendar days, rather than three days, for employers to begin verifying existing employees.

The proposed rule incited over 1,600 public comments. NSBA submitted comments to highlight several concerns with mandating the use of the E-verify to small businesses. NSBA’s comments focused on problems employers and employees have encountered in the past while using the E-Verify system, including well publicized error rates in the federal databases used to verify eligibility. According to a June 2008 report from the Government Accountability Office, about 7 percent of the queries to E-Verify cannot be verified immediately by the Social Security Administration, and about 1 percent cannot be immediately confirmed as work-authorized by U.S. Citizen and Immigration Services.

NSBA also urged additional research to ascertain the potential impact and additional regulatory burden that would truly be placed on small businesses. NSBA expressed concerns that the rule seems to be an indication that the E-Verify program is moving in the direction of being mandated nationwide. Any further expansion of the E-verify program must be considered by Congress as it is not under the purview of the administration to expand the program to the private sector.

The E-verify database, run by the Department of Homeland Security, has been available for some time and is currently voluntary for the private sector but mandatory for federal agencies. Employees using the system are required to supply their employers with photo identification and a Social Security number. The contractor can directly insert the information online and get an immediate response to verify the employees working status. Currently, there are approximately 92,000 employers participating in the program.

Congress extended the E-verify voluntary program in the recently passed continuing resolution. The short-term extension will expire on March 6, 2009, setting up an inevitable debate on immigration issues for the 111th Congress.
NSBA will continue working with members of Congress and their staff to ensure that any legislation considered does not have a negative impact on the small business community. Contact NSBA if you need additional information on the final FAR Council rule or would like to provide comment in regard to the pending immigration debate in the 111th Congress.