Despite legal pressure from the U.S. Chamber and other trade groups, a federal court has given the go ahead to a new Department of Homeland Security rule requiring federal contractors and subcontractors to electronically verify the legal status of their employees.

Judge Alexander Williams, Jr., of the U.S. District Court in Maryland dismissed the Chamber's case on August 26.  The decision clears the way for the rule to take effect on September 8.
Beginning on that date, federal contractors with jobs over $100,000 and subcontractors with jobs over $3,000 will have to verify that their employees–whether they are working on government contracts or not–are legally eligible to work in the United States. Workers hired before November 1986 must be reverified if they are assigned to government contracts. The Chamber estimates that the rule will triple employers' costs to a collective $188 million.

Mandatory use of E-verify by qualified federal contractors and subcontractors was imposed by Executive Order during the Bush administration. However, the Chamber's lawsuit, Chamber of Commerce, et al v. Chertoff, et al., prevented the mandate from taking effect. The Obama Administration agreed to continue postponement while the litigation was ongoing.

The Chamber supports legislative initiatives to develop and implement an electronic verification system, but it must be effective, efficient, and manageable.