E-Verify is the free internet-based system USCIS operates within DHS that compares Form I-9 information against Social Security Administration and DHS records to confirm employment eligibility. Enrollment is voluntary for most private employers — but two pressures make it effectively mandatory for a growing slice of the workforce: the Federal Acquisition Regulation E-Verify clause for covered contractors and a patchwork of state laws that mandate enrollment for public or private employers. Once an employer is in, the Tentative Nonconfirmation procedure becomes the highest-stakes operational rhythm in HR, because a fumbled TNC clock turns a system mismatch into wrongful-termination exposure.
What changed
The federal contractor rule traces to Executive Order 12989 (Reagan, as amended by Bush 43’s E.O. 13465), implemented through FAR Subpart 22.18 and the contract clause at FAR 52.222-54. Any prime contract over the simplified-acquisition threshold with a performance period of more than 120 days and substantial work performed in the United States now carries the clause, and any subcontract over $3,500 for services or construction inherits it. The contractor has 30 calendar days from contract award to enroll, must begin verifying new hires within 90 days, and must verify every existing employee assigned to work on the federal contract within 90 days after enrollment or 30 days after assignment.
State law layers on top. Arizona requires every employer in the state to use E-Verify for new hires. Mississippi, South Carolina, Alabama, Georgia, North Carolina, Tennessee, Utah, and Florida impose mandates with varying employee thresholds and effective dates; Florida’s SB 1718 lowered the threshold to private employers with 25 or more employees as of July 1, 2023. Public-employer or public-contractor mandates exist in Colorado, Idaho, Indiana, Louisiana, Michigan, Missouri, Nebraska, Oklahoma, Pennsylvania, Texas, Virginia, and West Virginia. The E-Verify legislation map is the authoritative tracker.
The procedural backbone of the system is the Tentative Nonconfirmation. When E-Verify cannot confirm a query against SSA or DHS records, it returns a TNC — most often because of a name mismatch after marriage, a citizenship-status update SSA never received, an I-9 typo, or a photo-matching failure for List A documents. The employer must give the employee a Further Action Notice within 10 federal workdays of receiving the TNC, the employee then has 10 federal workdays from the date they receive the FAN to decide whether to contest, and a contested case opens an 8-federal-workday investigation window with SSA or DHS. The clock matters: termination, suspension, withholding pay, or any adverse action during the contest is a prohibited employer practice under the Memorandum of Understanding every enrolled employer signs and can be referred to the Department of Justice IER for citizenship-status discrimination or document abuse.
Why it matters
For federal contractors, missing the 30-day enrollment window or the 90-day verification deadlines is a compliance breach that the contracting officer can cure-notice and ultimately use as grounds for termination for default — and a documented E-Verify failure surfaces in the Federal Awardee Performance and Integrity Information System the next time the company bids. The clause also reaches subcontractor tiers most prime contractors never inventory at award, so the procurement team that signed the prime contract is responsible for a verification posture they may not directly control. A single noncomplying subcontractor on a large services contract is enough to trigger a USCIS site visit and a referral.
For state-mandate employers, the bite is at the state level: Florida’s $1,000-per-day civil penalty after the third offense, Arizona’s potential business-license suspension under the Legal Arizona Workers Act, South Carolina’s annual reporting requirement. The state regimes are not preempted by federal immigration law — the Supreme Court resolved that in Chamber of Commerce v. Whiting, 563 U.S. 582 (2011) — so a multistate employer faces both federal Form I-9 obligations and a state E-Verify floor that varies dramatically across the map.
For every enrolled employer, the TNC procedure is where most real harm gets done. Treating a TNC as a final nonconfirmation, terminating before the contest window closes, or pressuring the employee not to contest produces civil-penalty exposure and the very-real risk of a back-pay order from the DOJ IER. Conversely, Final Nonconfirmation with no employer follow-up exposes the employer to civil penalties under INA 274A(e) for knowingly continuing to employ an unauthorized worker.
Way forward
If you are a federal contractor or a subcontractor that just learned the clause flows down to you, enroll in E-Verify here and assign a program administrator before the 30-day window runs. Confirm in writing which existing employees are “assigned to the federal contract” under the FAR definition — every-employee verification is an election you can make, but it is not the default and most contractors should not opt in unless they have a uniform federal-contract workforce.
If your state mandates E-Verify, audit your hiring jurisdictions against the state legislation tracker, set your enrollment threshold against the lowest state that touches you (Florida’s 25-employee count is the current floor for several southeastern multi-site employers), and bake the E-Verify User Manual procedure into your onboarding checklist so the case is created within 3 federal workdays of the I-9 completion date.
If you are managing a TNC, follow the Further Action Notice flow verbatim: deliver the FAN and the Referral Date Confirmation in the employee’s preferred language, give them the 10 federal workdays, do not document any adverse action in the personnel file during the contest, and keep the case open in E-Verify until SSA or DHS resolves it. If the employee declines to contest, that is the only basis on which you can move to terminate before final resolution — and even then, document that the choice was the employee’s and not a result of employer pressure.
If your verification posture is messy and you need to clean up before an audit, consider E-Verify’s self-audit guidance and the parallel USCIS Handbook for Employers M-274 for the underlying I-9. Voluntary self-audit is not a safe harbor against ICE but it materially reduces fine exposure if a Notice of Inspection lands.
Disclaimer
This article is general information from Fola Editorial, not legal advice. E-Verify rules and state mandates change frequently. For your specific federal contract, state-mandate posture, or live TNC case, consult an immigration or employment lawyer and verify the current rule directly at e-verify.gov and your state’s labor agency.