FAR 52.222-54: E-Verify Requirements for Federal Contractors

FAR Clause 52.222-54 sets out the E-Verify requirements for federal contractors: if your prime contract includes the clause, you must enroll in E-Verify, run all new hires across your company through the system, verify employees assigned to the contract, flow the requirement down to qualifying subcontracts, and follow strict rules on timing, mismatches, and non-discrimination. The obligations are broader than what private employers face, and missed deadlines or premature adverse action against a flagged employee are the two mistakes that most often draw compliance attention.

When the Clause Applies

Two conditions have to be met at the prime contract level. The total value must exceed the simplified acquisition threshold, which is $350,000 as of October 1, 2025,¹ and the period of performance must run longer than 120 days. If either condition is missing, the clause doesn’t belong in the contract. When both are met, the contracting officer includes it, so the surest way to know the rule is yours is to read the contract.

The clause flows down. Any subcontract for services or construction valued at more than $3,500 must include it when the prime contract does.² Every tier carries the same verification duties as the prime.

Some work stays outside the mandate regardless of dollar value. Contracts for commercially available off-the-shelf (COTS) items are generally exempt, along with commercial services bundled with a COTS purchase and normally provided by the COTS supplier.² Work performed entirely outside the United States doesn’t trigger the obligation for the employees doing it. On a mixed contract, only the domestic portion is covered.

Enrolling as a Federal Contractor

Enrollment isn’t the same as signing up as an ordinary employer. During the process you have to select the “Federal Contractor with FAR E-Verify Clause” category,³ which turns on functionality that standard employers don’t have, including the ability to verify existing employees. You’ll need your Federal Employer Identification Number, physical addresses of your hiring sites, and a designated Program Administrator. Enrollment ends with a Memorandum of Understanding signed by someone with authority to bind the company.

You also make a scope decision at enrollment: verify only new hires and existing employees assigned to a covered contract, or verify your entire workforce.⁴ The contract-only option means you have to keep track of which employees are assigned to which contracts. The entire-workforce option is simpler operationally, but once you start verifying existing employees under that choice, you can’t switch back.

Who You Have to Verify

The obligation is broader than most contractors expect. Every new hire across your entire company, during the life of the contract, gets run through E-Verify, whether or not that person will ever touch federal work.² Someone hired for an unrelated commercial project at a different office still counts.

Existing employees assigned to the federal contract must also be verified. An employee is “assigned” if they perform any direct work under the contract, from lead engineer to administrative support tied to its requirements. If you chose the entire-workforce option at enrollment, all existing non-exempt employees across the company are in scope.⁴

Some employees are exempt even on a covered contract. Workers with an active confidential, secret, or top secret clearance don’t have to be processed through E-Verify.⁵ Neither do employees credentialed under Homeland Security Presidential Directive 12 after a completed background investigation, or anyone the same employer has already verified through E-Verify.

Deadlines for Creating Cases

Timing differs by employee category, and missed windows are one of the most common problems E-Verify’s Account Compliance team flags.⁶

New hires: create a case no later than the third business day after the employee starts work for pay. The clock runs from the first day of paid work, not the offer date or the paperwork date.⁷
Existing employees assigned to a contract, if you’re already enrolled: 30 calendar days from the assignment date.²
Existing employees, if you’re newly enrolled: within 90 calendar days after enrollment, or 30 calendar days after assignment, whichever is later.²

If you find you’ve missed a deadline, create the case right away rather than skipping it.

Handling a Mismatch

When E-Verify can’t immediately confirm authorization, it issues a Tentative Nonconfirmation, called a mismatch. This is the highest-risk moment in the process because acting too quickly against the employee violates their rights, and acting too slowly violates program rules.

Within 10 federal government working days of the mismatch, you have to notify the employee, complete the referral, and give them the chance to decide whether to contest it.⁸ You provide a Further Action Notice explaining the mismatch and what to do about it. An employee who chooses to contest has 8 federal government working days from the referral date to visit a Social Security field office or contact DHS, depending on the mismatch type.⁹

Throughout the resolution period, you cannot fire, suspend, delay a start date, cut hours, or take any other adverse action. The employee keeps working under the same terms as if the mismatch hadn’t happened. Premature adverse action is specifically called out by compliance monitors.⁶

If the employee doesn’t contest, or the agencies issue a Final Nonconfirmation, close the case. The Memorandum of Understanding provides that you may terminate the employee after a Final Nonconfirmation without civil or criminal liability.¹⁰ Continuing to employ the person requires notifying DHS, and on a federal contract that creates obvious exposure.

Anti-Discrimination Limits

Running E-Verify doesn’t loosen the Immigration and Nationality Act’s rules on unfair documentary practices. Three categories of conduct are prohibited during the Form I-9 and E-Verify process:¹¹ demanding more or different documents than Form I-9 requires; insisting on a particular document, such as a Permanent Resident Card, rather than letting the employee choose from acceptable options; and rejecting documents that reasonably appear genuine and relate to the person presenting them. In practice, the common violations involve applying extra scrutiny to employees who appear foreign or speak with an accent, or demanding specific documents from noncitizens. Civil penalties for these violations run independently of any E-Verify compliance problems.

Photo matching sits inside these limits. When an employee presents a U.S. passport, passport card, Permanent Resident Card, or Employment Authorization Document, E-Verify displays a photo for you to compare against the physical document, and you keep copies of the front and back with the Form I-9.¹² You cannot ask the employee to present one of these documents to trigger the match; document choice always belongs to the employee.

Recordkeeping and Monitoring

Record the E-Verify case number for each employee and keep it with the corresponding Form I-9.¹³ USCIS keeps employer records for 10 years.

The Account Compliance team watches for patterns that suggest misuse: cases created for employees hired before the MOU was effective, mismatch cases left open past 10 working days, duplicate cases for the same employee, and cases with final results left unclosed.⁶ Problems trigger a desk review. Closing cases promptly and keeping points of contact current is the day-to-day work of staying off that list.

Penalties

Contract-side consequences escalate fast. If DHS or SSA terminates your Memorandum of Understanding and cuts off E-Verify access, the FAR clause provides that you’ll be referred to a suspending and debarring official.² While the referral is pending, your E-Verify obligation is paused, but any outcome short of suspension or debarment means reenrolling and resuming compliance immediately.

Federal civil penalties for employment eligibility verification failures apply per worker and increase sharply for repeat violations. As of the inflation adjustment effective for penalties assessed after July 3, 2025:¹⁴

First offense, per unauthorized worker: $716 to $5,724
Second offense, per unauthorized worker: $5,724 to $14,308
Subsequent offenses, per unauthorized worker: $8,586 to $28,619
Paperwork violations, per individual: $288 to $2,861
Failure to notify DHS of continued employment after a Final Nonconfirmation: $998 to $1,992 per individual

Across a workforce of any size, paperwork penalties alone stack quickly, and a debarment referral affects the ability to win future federal work long after the fines are paid.

1
Acquisition.gov. Threshold Changes
2
Acquisition.gov. 52.222-54 Employment Eligibility Verification
3
E-Verify. 8.2 Federal Contractor Enrollment Steps
4
E-Verify. 8.1 Options for Verifying Existing Employees
5
E-Verify. E-Verify for Federal Contractors – Exemptions and Exceptions
6
E-Verify. Common Mistakes Found By Account Compliance
7
E-Verify. Timeframes for Enrollment and Use
8
E-Verify. Tentative Nonconfirmation (Mismatch) Overview
9
E-Verify. Further Action Notice Tentative Nonconfirmation
10
E-Verify. 3.6 Final Nonconfirmation
11
U.S. Citizenship and Immigration Services. 11.2 Types of Employment Discrimination Prohibited Under the INA
12
E-Verify. E-Verify Photo Matching
13
E-Verify. E-Verify Records Retention and Disposal Fact Sheet
14
eCFR. Civil Monetary Penalties Inflation Adjustment