On June 6, 2008 President Bush signed an amendment to Executive Order 12989 requiring all federal contractors to use E-Verify. The Executive Order prevents federal departments and agencies from entering into contracts with employers that do not use E-Verify. It also requires, as a condition of each contract, that contractors agree to use E-Verify to verify the employment eligibility of: 1) all persons hired during the contract term by the contractor to perform employment duties within the U.S.; and 2) all persons assigned by the contractor to perform work within the U.S. on a Federal contract.

The overall burden to contractors with respect to Executive Oder 12989 (as amended) is uncertain at this time. However, the Department of Homeland Security (DHS) is expected to publish proposed regulations in the Federal Register within the next two weeks. Until these regulations are published we recommend the following:

• Review all current federal contracts that will require compliance with the requirements of this Executive Order.
  
  
• Conduct an audit of your company's current procedures for Form I-9 completion and retention.

Once the proposed regulations are published, we will provide further guidance on whether the rule applies only to new Federal contracts, and whether current employees who work on the federal contract must be processed through E-Verify.

About E-Verify: E-Verify is operated by the U.S. Citizenship and Immigration Services (USCIS) in cooperation with the Social Security Administration (SSA), is Internet based, and is already used by nearly 70,000 employers. E-Verify compares information contained on the Employment Eligibility Verification Form I-9 with Social Security numbers, and with the DHS database to verify identity and employment eligibility of newly hired employees. Employers who enroll in E-Verify are required to sign a Memorandum of Understanding with the DHS and the SSA and agree, among other things, to allow the DHS and SSA to make periodic visits to the employer for the purpose of reviewing E-Verify related records, including Form I-9.

If you have any questions or need further information on reporting requirements, please give us a call.