On June 6, 2008, President Bush amended Executive Order 12989 to require that all federal contractors verify the legal status of their employees by using the government’s electronic employment verification system or face sanctions including debarment from future contracts:

Executive departments and agencies that enter into contracts shall require, as a condition of each contract, that the contractor agree to use an electronic employment eligibility verification system designated by the Secretary of Homeland Security to verify the employment eligibility of: (i) all persons hired during the contract term by the contractor to perform employment duties within the United States; and (ii) all persons assigned by the contractor to perform work within the United States on the Federal contract.

DHS has designated E-Verify as the employment eligibility verification system for all federal contractors and touted its effectiveness:

More than 69,000 employers currently rely on E-Verify to determine that their new hires are authorized to work in the United States. Employers have run more than 4 million employment verification queries so far in fiscal year 2008. Of those queries, 99.5 percent of qualified employees are cleared automatically by E-Verify.

Commentators have questioned the accuracy and capacity of the E-Verify system. Michael Aitken, SHRM Government Affairs Director has said, “ mandating participation in a system that doesn’t really work won’t give employers the tools they need to ensure a legal workforce.” DHS has responded publicly in its release “Debunking the E-Verify Capacity Problem.” I have suggested taking a Wait and See Approach to E-Verify. However, the wait is over for government contractors who will soon see how the system fairs. Bush’s Order has no clear effective date, but appears to be prospectively applicable to new or renewed government contracts.