Department of Homeland Security Secretary Janet Napolitano has announced support for a regulation that will award federal contracts only to employers who use E-Verify to check employee work authorization, but at the same time said that DHS intends to rescind its controversial “no match” rule, which had been blocked by court order. After her announcement, the U.S. Senate approved by voice vote an amendment that would prohibit funds in the appropriations bill from being used to “amend, rewrite, change, or delay the implementation” of the no-match rule, but it was reported that the amendment would have little effect if DHS rescinds the rule before October 1, 2009 when the new budget takes effect.

The “no match” rule was originally proposed in June 2006, and required employers to follow up and resolve discrepancies after receiving notice from the Social Security Administration about mismatches in name and social security number of a worker in employer reports and what is contained in the SSA’s database, or after receiving a “notice of suspect document” from DHS. If the discrepancy was not resolved, employers would have been required to terminate individuals or face liability for employing unauthorized aliens. The final rule was published in August 2007 setting out safe harbor procedures for employers, but the rule was enjoined by federal court at the request of union and employer groups.

E-Verify, which compares information from I-9 Forms against federal government databases to verify workers’ employment eligibility, is a free web-based system operated by DHS and the SSA. The federal contractor rule extends use of the E-Verify system to covered federal contractors and subcontractors, including those who receive American Recovery and Reinvestment Act funds. Napolitano signaled that the Administration will push ahead with full implementation of the rule, which will apply to federal solicitations and contract awards Government-wide starting on September 8, 2009.