Recently, President George W. Bush amended Executive Order 12989 in order to direct all federal departments and agencies to require contractors, as a condition of each future federal contract, to agree to use an electronic employment eligibility verification system to verify the employment eligibility of all persons hired during the contract term and all persons performing work within the United States on the federal contract.

On June 9, 2008, in response to this Executive Order, Secretary of Homeland Security Michael Chertoff designated E-Verify as the system of choice to ensure that the federal government only does business with companies that agree to verify the legality of their new hires and further, that the specific employees tapped to perform contract services in the United States for the federal government are authorized to work in this country.

According to the U.S. Department of Homeland security Press Release on June 9, 2008, "Agencies responsible for federal acquisition regulations (FAR) will send a Notice of Proposed Rulemaking (NPRM) to the Federal Register today soliciting public comment on proposed changes to these regulations. Comments will be accepted for 60 days."

It appears that the Executive Order will not take effect until the FAR is amended. This regulatory process is likely to take at least 90 days or longer given the complexity of the requirement and the many comments that the public is likely to submit in the rulemaking process.

According to the FAQ issued by U.S. Department of Homeland, federal contractors are not required to enroll in E-Verify right now. The FAQ, states that “[a]t this time, the E-Verify program remains a voluntary program for employers, including federal contractors. The Executive Order instructs Federal agencies to require contractor participation in E-Verify as a term of future contracts, and the proposed rule provides detailed guidance on how that requirement is to be implemented. However, the proposed rule is not a final rule; it is a proposal that is open for public comment at this time. There may be substantive changes to the rule before it becomes final. Moreover, the final rule will not be effective until 30 days after publication. Under the proposed rule, you would only be required to enroll in E-Verify if and when you enter into a Federal contract or subcontract that requires participation in E-Verify as a term of the contract. Although Federal Contractors are not yet required to participate in E-Verify, you are encouraged to enroll in E-Verify now to verify the employment eligibility of your new hires.”