Every contractor that does business with the federal government is familiar with the requirement to use of E-Verify in order to document the employability of a contractor’s employees.  But, when is a contractor required to use E-Verify in Texas?  And, does this requirement to use E-Verify extend to the contractor’s subcontractors?  All contractors and each of their subcontractors will be required to use E-Verify for a variety of goods and services contracts with state agencies.  Failure to understand these requirements could lead to your company losing out on the award of the next Texas public procurement contract.

First, a bit of history on the use of E-Verify in Texas public procurements.  On December 3, 2014, Governor Perry issued Executive Order RP-80 which required all agencies under the direction of the Governor to utilize the DHS E-Verify system in two instances: (1) to verify the employment eligibility of all current and prospective employees; and (2) as a condition for award of all state contracts for services which utilizes contract employees and contractors (including subcontractors).  In the same executive order, the Governor encouraged all other state agencies to make use of E-Verify in these two instances.  In the 2015 legislative session, Senate Bill 374 was passed adding Chapter 673 to the Texas Government Code and was signed by Governor Abbott with an effective date of September 1, 2015.  Chapter 673 requires state agencies to participate through DHS E-Verify in confirming employment eligibility for all newly hired state employees.  State agencies, as referenced in Chapter 673, is defined by Section 659.101 of the Texas Government Code, to include: “a department, commission, board, office, or other agency or branch of state government, including an institution of higher education.”