On Friday, April 17, the agency announced that it would postpone until June 30 a rule mandating that all federal contractors use the mechanism, known as E-Verify.

Currently, 118,917 employers have signed up for E-Verify, which Congress established as a voluntary system.

The regulation, promulgated by the Bush administration, was originally supposed to go into effect on January 15. The Bush White House delayed it until February 20. In late January, the Obama administration pushed it back to May 21.

After the final rule was issued last fall, several business groups—including the U.S. Chamber of Commerce, the Society for Human Resource Management and the HR Policy Association—filed suit to block its implementation on the grounds that it is unconstitutional. The case is pending in a Maryland district court.

The homeland agency said it needs more time to think through the change.

“The extension provides the administration an adequate opportunity to review the entire rule prior to its applicability to federal contractors and subcontractors,” said the U.S. Citizenship and Immigration Services in a statement.

The move comes as supporters of comprehensive immigration reform are pushing the Obama administration to pass legislation this year. The politically divisive issue is sure to cause fissures within and between political parties, as it did two years ago when comprehensive reform died in the Senate.

It is unlikely that any piece of immigration policy—verification, legalization, employment visas—will move separately from a broad bill.

In the meantime, the White House likely will make cautious moves on immigration—such as delaying rather than killing a regulation that it doesn’t really like.

“The administration does not want to be burdened by affirmatively withdrawing this regulation and giving ammunition to anti-immigrant and restrictionist forces on the eve of an immigration reform debate,” said Eric Bord, a partner at Morgan Lewis & Bockius in Washington.

The regulation delay raised the ire of the congressional author of E-Verify.

“This is the second time the new administration has delayed the order and it simply makes no sense,” Rep. Ken Calvert, R-California, said in a statement. “At a time when Americans are losing jobs, we should be doing everything we can to ensure that federal funds are going to employ American citizens and legal workers—not illegal immigrants.”

Under the regulation, companies that win a federal contract of more than $100,000—and subcontractors with contracts of greater than $3,000—would have to enroll in E-Verify within 30 days of being awarded the work.

The firms would have to check the eligibility of existing and new employees who directly work on federal contracts.

E-Verify was the centerpiece of Bush administration efforts to step up work-site enforcement after the demise of comprehensive immigration reform in 2007.
 
The contractor rule could add at least 150,000 companies to the E-Verify roster. Business groups are resisting the contractor regulation and legislation in Congress that would make E-Verify compulsory because they say it is inaccurate, inefficient and unable to detect identity theft.

They argue that the 4.1 percent error rate in the Social Security database could lead to millions of people being incorrectly ruled ineligible for work. Supporters say that the system confirms 96 percent of queries instantly and has an error rate of less than 1 percent.

Although the Obama administration may not embrace E-Verify with the enthusiasm of its predecessor, Bord said that Homeland Secretary Janet Napolitano will keep it in place.

“Her goal is to address the deficiencies in E-Verify but not to scrap the program,” Bord said.

He advises employers to get ready for mandatory E-Verify use by using it at a couple of their operations. Under current rules, the program does not have to be implemented companywide.

“A prudent employer will begin to test the waters,” Bord said.