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									                            Mandatory E-Verify for
           Research and Educational Institutions with Federal Contracts

    A recent amendment to the Federal Acquisition Regulation (“FAR”) soon will require many
federal contracts, including contracts with universities, to contain an “E-Verify Clause” obligating
the contractor and its subcontractors to use the government’s E-Verify program to confirm the
work authorization of their employees. This article focuses on the E-Verify Clause requirement as it
applies to universities. Although opponents of the regulation may sue to block its implementation,
whatever the outcome, the Obama administration has signaled its interest in cracking down on
employers that hire unauthorized workers. Therefore, universities should be taking steps to prepare
for implementation of the FAR amendment and, at a minimum, to ensure that they are complying
with existing I-9 employee verification requirements.

                                         The E-Verify System

    E-Verify is an internet-based system operated by the US Citizenship and Immigration Services
(“USCIS”) of the Department of Homeland Security (“DHS”) together with the Social Security
Administration (“SSA”). It was designed to allow an employer to check the work authorization and
social security numbers of its workers against government databases as part of the I-9 verification
process. A data match will result in verification. A mismatch will yield a tentative nonconfirmation
notice (“TNC”), which the employee can contest or not. The employer may not terminate the
worker until E-Verify issues a notice of final nonconfirmation (“FNC”), which will occur if the
discrepancy is not resolved. To use E-Verify, a contractor must enter into a Memorandum of
Understanding (“MOU”) with USCIS and SSA. More information about E-Verify is at

                                           Contracts Covered

    As a general rule, the FAR amendment will require the E-Verify Clause to be included in the
following contracts:

       Prime contracts awarded after January 15, 2009, with a performance period longer than 120
        days and a value above $100,000;
       Flow-down subcontracts for services (except for commercial services related to the purchase
        of commercially available off-the-shelf items or “COTS”) with a value over $3,000; and,
       Indefinite-delivery/indefinite-quantity contracts (“IDIQ contracts”) with a remaining
        performance period that extends more than six months after January 15, 2009, if the amount
        of work or expected number of future orders is substantial.

     The E-Verify Clause requirement does not apply to:

        Contracts for COTS;
        Contracts only for work that will be performed outside the United States; or,
        Grants and cooperative agreements, which are not covered by the FAR.

 by Denise C. Hammond, Managing Partner of Hammond Claxton, P.C., with offices in Rockville, Maryland, and
Washington, D.C. Ms. Hammond was recognized by Legal Times and in Washington Post surveys as a leading
immigration lawyer in the Washington, D.C., area. She can be reached at
              Employees Covered - The E-Verify Clause As Applied to Universities

     Unlike universities, the general population of covered contractors must E-Verify all new hires and
all existing employees “assigned to the contract.” In view of their sheer size and unique characteristics,
institutions of higher education (as defined at 20 U.S.C. §1001(a)) can choose to E-Verify all new
hires, but are only required to E-Verify employees who are “assigned to the contract,” whether new or existing.

     There are valid reasons for limiting the E-Verify burden on the educational and research
community. The size of many institutions would make E-Verification of all new hires financially and
administratively burdensome and unduly stress the E-Verify system. The use of “sponsored pool
accounting systems” facilitates changes in researchers’ and staff members’ funding sources, which
complicates the use of E-Verify. Universities with significant foreign national populations already
have strong programs to monitor work authorizations, are subject to rigorous immigration oversight
and are low-risk employers. Requiring universities to E-Verify all new hires would hamper their
ability to attract highly sought foreign nationals and impact the quality of research programs. This is
particularly unjustified since most federal funding to the educational and research community takes
the form of grants, not contracts. Thus, requiring a university to E-Verify all its new hires just
because it has a single contract would increase incentives for academic institutions to insist on grant
funding rather than agreeing to enter into contracts. This would increase costs and performance
risks to the government. Therefore, institutions of higher education need only E-Verify employees
assigned to a federal contract.

     Although universities will have a particular interest in determining who is assigned to the
contract, the FAR amendment provides limited guidance. It states that an employee is deemed
assigned to the contract if he or she directly performs work under the contract as opposed to
normally performing support work or overhead functions. A mailroom clerk serving the entire firm
would not be “assigned to the contract”. Because it can be unwieldy to determine which employees
are “assigned to a contract,” contractors, including universities, may opt to use E-Verify for their
entire workforce, including all new and existing employees, regardless of their relation to the contract,
with prior notice to DHS.

    Exempted from E-Verify processing are employees with an active federal agency HSPD-12
credential or certain active US Government security clearances.

                                    Timeframes for Implementation

   Covered contractors and subcontractors must enroll in the E-Verify program within 30 calendar
days of the award of the contract and initiate verification of all new employees within 90 days of
enrollment. Existing employees assigned to the contract must be run through E-Verify within 90
days of enrollment or 30 days of assignment to the contract, whichever is later.

                                      Fate of the FAR Amendment

     Serious concerns about the FAR E-Verify requirement have led several major organizations to
consider litigation to block its implementation. While DHS touts E-Verify’s enhancements, the
program has been roundly criticized by users for the inaccuracy of its databases and the enormous
effort required to resolve discrepancies. Additional concerns relate to the increased risk of wrongful
terminations, exposure to government I-9 audits, heightened costs of doing business with the
government, and breaches of employee privacy. Only time will tell whether the FAR amendment
will be enjoined. Until then, employers should prepare for implementation.
                                      E-Verify Best Practices

    Assuming that the FAR Amendment takes effect on January 15, 2009, which is a prudent
assumption, covered employers should be prepared. They should designate personnel with E-Verify
responsibility, review carefully the E-Verify MOU and registration materials, and attend an E-Verify
seminar or webinar sponsored by the USCIS. They should identify all contracts that will be subject
to the mandatory E-Verify clause and determine employees that are “assigned to the contract.”
They should plan to track the costs of E-Verify participation in order to negotiate recovery from the
government. Employers also should develop timelines and written policies and procedures for E-
Verify processing.

    Of particular importance in an employer’s E-Verify policies and procedures are those designed
to avoid discrimination on the basis of national origin or citizenship status. Among these, employers
who participate in E-Verify should:

      Verify the employment eligibility of all new hires regardless of national origin or citizenship
      Use E-Verify for only after the employee has completed the I-9 Form;
      Give the employee a TNC promptly;
      When an employee chooses to contest a TNC, promptly give him a referral notice to SSA or
      Allow an employee who is contesting a TNC to continue working during the allowed period;
      Post required notices of participation in E-Verify and antidiscrimination;
      Secure the privacy of the E-Verify password and of employees’ personal information;

   A responsible E-Verify policy should state that the employer will NOT:

      E-Verify current employees who are not assigned to a contract (unless the employer elects to
       process all existing employees through E-Verify and notifies DHS);
      Use E-Verify selectively based on a “suspicion” that an employee is not authorized to work
       in the U.S., or based on national origin;
      Use the program to pre-screen employment applicants;
      Influence or coerce an employee not to contest a TNC;
      Terminate or take other adverse action against an employee who is contesting a TNC until
       receiving an FNC;
      Ask an employee to obtain a printout or other written verification from SSA or DHS when
       referring that employee to either agency;
      Ask an employee to provide additional documentation of employment eligibility after
       obtaining a TNC;
      Request specific documents in order to use E-Verify’s photo tool feature.


     Our current immigration enforcement policy puts the verification of work authorization at the
front lines of national security. Whether unauthorized workers truly threaten the homeland is a
legitimate debate as is the benefit to be gained from mandatory participation in E-Verify. Regardless,
with only weeks away from the FAR amendment and with DHS Secretary-Designate Napolitano’s
commitment to “cracking down” on the employers who hire unauthorized workers, universities with
federal contracts should ensure that they are complying with existing I-9 verification requirements
and will be up to the task of E-Verifying their workers.

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