January 28, 2009

Effective Date of Mandating E-Verify for Federal Contractors is Postponed Until May 21, 2009

In light of the Obama administration's directive to freeze all pending federal regulations until the new team has vetted them, on January 27, 2009 the government agreed to extend the effective date of the Federal Contractor E-Verify mandate to May 21, 2009. The litigants in the lawsuit challenging the legality of forcing federal contractors to utilize E-Verify also agreed to ask the court to stay the proceedings to allow President Obama’s administration an opportunity to review the Federal Contractor E-Verify rule. The rule was originally slated to be implemented on January 15, 2009 and had already been postponed to February 20, 2009. The memorandum distributed on January 21 by White House Chief of Staff Rahm Emanuel stated that no proposed or final regulation should be sent to the Office of the Federal Register for publication until it has been reviewed by an Obama-appointed department or agency head. Emanuel also asked that officials reconsider final regulations that have been published, but have not yet taken effect. The U.S. Chamber of Commerce requested from the Office of Management and Budget that the Emanuel memorandum be applied to this regulation and counsel in the litigation made the same request to the government’s counsel according to a January 27 Chamber Alert updating their members on the status of the lawsuit.

This delay will postpone the time when federal agencies will begin to insert the clause into their contracts requiring certain federal contractors to use E-Verify. It is expected that the Federal Register will publish the applicability date this Friday. While we are confident that the new administration will review the regulation
carefully and nullify it in part or in whole, careful planning to understand companies’ responsibilities under the new regulation is crucial. For companies both large and small the regulation creates an enormous financial and time burden that includes a review and update of all I-9s completed on existing employees assigned to federal contracts.

GT will continue to update you on the status of this rule as we learn more.