Following the Bush Administration’s last minute decision to stay the implementation of a federal regulation mandating all federal contractors to register with and use DHS’ E-Verify System to screen employees, the new Obama Administration has agreed to further extend the stay to at least May 21, 2009.   In agreeing to this stay, in response to a federal lawsuit, the Department of Homeland Security agreed to include the federal contractor E-Verify regulation as part of an overall policy review by the Obama Administration of regulations that were passed in the waning days of the Bush Administration.  The federal contractor E-Verify requirement was originally scheduled to take effect on January 15, 2009 and was anticipated to have ultimately affected 168,000 federal contractors.

As the honeymoon period for the new Administration fades, so too does the ability to avoid the proverbial third rail called immigration.  The decision to further postpone implementation of the E-Verify rule marks one of the first decisions regarding immigration that the Obama Administration has taken.  While business members who filed suit against DHS have achieved delay in its implementation, it remains to be seen how DHS, under the new leadership of Secretary Napolitano, will decide on the ultimate fate of the E-Verify rule.  While the Obama Administration is just formulating its immigration strategies and policies, Secretary Napolitano in her prior role as Governor of border state Arizona has an established track record of supporting E-Verify and employer compliance.   As Governor, Secretary Napolitano signed and enacted what is viewed as one of the most stringent state laws on immigration, which required most Arizona businesses to register and use E-Verify.  Then-Governor Napolitano enacted this law with DHS’ support, despite repeated concerns regarding the accuracy of E-Verify data and the burden it would impose on businesses – the key arguments raised in the lawsuit pending against DHS and which now-DHS Secretary Napolitano must respond to.   While DHS in the past has defended the accuracy of E-Verify’s data and disagreed with concerns about the burden it imposes on employers, it remains to be seen whether this response and posture will continue in the new Administration.  Recently, Governor Napolitano hesitated to publicly support a House provision mandating E-Verify participation for all recipients of contracts funded through the pending stimulus package – indicating that this is a White House decision.

Equally pressing, the Obama Administration must formulate and reveal its position on the overall E-Verify program prior to March 6, 2009, when legislation authorizing the continuing existence of E-Verify is scheduled to expire.   Unless the program is reauthorized, over 100,000 employers who currently rely on the system will find themselves unable to use this tool to verify employees.  The E-Verify program was set to expire in November 2008.  In a compromise to permit further debate and review of the program, Congress extended the program to March 2009 through a continuing resolution.  The E-Verify debate prior to this brief extension revealed significant divides amongst members, the Administration and the business community, with views ranging from mandating E-Verify for all employers to eliminating or “freezing” the program while data integrity and cost issues are reviewed.  In addition, some members in the Senate prevented passage of a longer extension of the program by tying it to increases in the number of immigrant and workers’ visas available.

Those of us in the employer community and the immigration policy world now wait to see what “change” – if any- is coming to E-Verify and DHS’ worksite enforcement policies.

Victor X. Cerda is a Partner of Jackson Lewis LLP in the firm’s Corporate Immigration Group in the Washington DC Region office.  He focuses on advising corporations and individuals on immigration compliance and benefits strategies.