Under federal law, the employers required to use E-Verify are federal contractors and subcontractors whose contracts contain the E-Verify clause, private employers in states that mandate the system, most public-sector employers in states and localities that require it, and businesses ordered to enroll through a legal settlement or court order. There is no federal law requiring all private employers nationwide to use E-Verify; for everyone outside those four groups, participation is voluntary.1U.S. Department of Homeland Security. Verify Employment Eligibility (E-Verify)
Every employer still has to complete Form I-9 for each new hire. E-Verify is the additional step of running that I-9 information through a Department of Homeland Security and Social Security Administration database to confirm work eligibility, and only the categories below are legally required to take it.
Federal Contractors and Subcontractors
A prime contractor must enroll in E-Verify when three conditions are all met: the federal contract is worth more than $150,000, the performance period runs longer than 120 days, and the contract includes the Federal Acquisition Regulation E-Verify clause.2E-Verify. Who Is Affected by the E-Verify Federal Contractor Rule At least some portion of the work must be performed in the United States.
The obligation flows down. When a prime contract carries the FAR E-Verify clause, subcontractors must enroll if their subcontract is for services or construction worth more than $3,500.2E-Verify. Who Is Affected by the E-Verify Federal Contractor Rule The prime is responsible for ensuring its subs comply. The specific language in the prime contract also controls the scope of who has to be verified: only employees assigned to the government project, or the entire workforce.
Existing Employees, Not Just New Hires
Federal contractors are the one group that must verify existing employees, not just new hires. A company enrolling in E-Verify for the first time because of a federal contract has 90 calendar days from enrollment to create cases for existing employees on the covered contract, or 30 calendar days after an employee is assigned to that contract, whichever comes later.3E-Verify. Deadlines for Enrollment and Verifying Employees Contractors already enrolled who win a new covered contract have 90 calendar days from the award date to verify existing employees working on it.
Contracts That Don’t Trigger the Rule
Not every federal contract carries the clause. Contracts solely for commercially available off-the-shelf items, meaning standard commercial products bought without modification, are exempt.4eCFR. 48 CFR 52.222-54 – Employment Eligibility Verification Contracts performed entirely outside the United States and any contract below the $150,000 threshold are also excluded.5Acquisition.gov. Subpart 22.18 – Employment Eligibility Verification
Ignoring the clause is expensive. A contractor that fails to comply can have its contract terminated and be debarred from future federal contracting.
Private Employers in States That Require E-Verify
Roughly nine states require every employer, regardless of size, to run new hires through E-Verify, though a few of those states carve out exceptions for the smallest businesses. Penalties for skipping the check vary by state and can reach suspension or revocation of a business license.
Other states take a tiered approach, applying the mandate only once a company reaches a set number of employees. Those thresholds range from as few as six employees to more than fifteen depending on the jurisdiction, and some states let smaller employers substitute a check of a valid state-issued identification document. Because these laws change frequently and vary considerably, an employer with workers in a state should confirm current requirements directly rather than relying on general guidance.
Public-Sector Employers and Their Vendors
Even in states that don’t require private employers to use E-Verify, many require public ones to. State agencies, county offices, municipal departments, and local school boards are commonly obligated to verify every new hire. That obligation frequently extends to outside vendors: a business bidding on a public contract typically must show proof of E-Verify enrollment before the contract can be finalized.
Employers Under Settlements or Court Orders
A business can become subject to E-Verify because of an enforcement action rather than a general mandate. After a workplace investigation by Immigration and Customs Enforcement, a company may agree to enroll as part of a settlement resolving hiring-violation allegations, often with the Department of Justice involved and a multi-year monitoring period attached. Court orders following criminal convictions for document fraud or knowingly hiring unauthorized workers can also require enrollment as a condition of probation.
Voluntary Enrollment for Everyone Else
An employer who doesn’t fall into any of the categories above can still enroll voluntarily. Doing so puts a verification layer on top of the I-9 and can help demonstrate a good-faith compliance effort if the company is later audited.
Voluntary enrollment also unlocks a practical benefit for employers with remote hires: only employers enrolled in E-Verify and in good standing may use the alternative procedure to examine I-9 documents over live video instead of in person.6U.S. Citizenship and Immigration Services. Remote Examination of Documents (Optional Alternative Procedure to Physical Document Examination) An employer using it must offer the remote option consistently to all employees at a given hiring site, or to all remote hires, and must retain copies of the documents reviewed.
One rule cuts across every enrolled employer, whether required or voluntary. E-Verify cannot be used to screen job applicants. A case may be created only after a job offer has been extended, accepted, and the Form I-9 completed, and pre-employment screening can bring civil penalties, back pay awards, and removal from the program.7E-Verify. The E-Verify Memorandum of Understanding for Employers