In a sudden rash of common sense, the Federal government has shelved implementation of the controversial proposed regulation, based upon an amendment to Executive Order 12989, that would make use of the Department of Homeland Security’s E-Verify System mandatory for contractors working on Federal projects. The proposed regulation also extends E-Verify use to all employees of a contractor.

The E-Verify system is Internet-based system that checks the names and Social Security numbers of all its workers against Social Security Administration and DHS data. The system either verifies that the information matches or gives the employer a “tentative non-conformation.” After a non-conformation notice, the employee must then resolve any non-confirmation issues in order to be eligible to work in the United States. If the mismatch is not resolved and the employee remains with the company, the employer faces losing its federal contracts.

Originally scheduled to be implemented in January, the regulation will not take effect until May of 2009 at the earliest. The Chamber of Commerce filed suit in December of 2008 to challenge the regulation. For now E-Verify usage is voluntary and only applies to new hires should a federal contractor wish to use the system.

The good news? At least until May, federal contractors can breathe easily that one more administrative cost will be postponed for an already stressed construction industry.