Strengthening E-Verify Compliance to Mitigate FCA Exposure

Strengthening E-Verify Compliance to Mitigate FCA Exposure

In an article, attorneys from Warner Norcross & Judd emphasize that the Department of Justice’s recent enforcement activity has brought E-Verify compliance to the forefront of False Claims Act (FCA) risk management. Their article explains that the DOJ’s second FCA settlement this year, tied to employment eligibility verification, demonstrates an enforcement environment where labor-authorization failures intersect directly with contract-billing integrity. This creates a broader risk narrative for contractors whose work depends on consistent eligibility verification across complex hiring and subcontracting structures.

The authors outline how the FCA attaches liability when a contractor knowingly submits false or fraudulent claims for payment, including situations where billing allegedly covers labor performed by individuals not authorized to work in the United States. Warner Norcross & Judd reports its use in two recent shipyard settlements, one for $4 million in New Jersey and another earlier this year in Louisiana. While those cases involved shipbuilders, the authors note that the underlying theory applies across industries where labor costs form the basis of federal invoices.

The article outlines the operational requirements under FAR 52.222-54, emphasizing the importance of adhering to E-Verify timelines in a disciplined manner, accurately creating cases, handling tentative non-confirmations properly, and maintaining updated enrollment status for contractors covered by the clause. The authors further emphasize that prime contractors face exposure if they are aware or should be aware that subcontractors are out of compliance, making structured oversight and documentation essential for their protection.

For risk professionals, elevated DOJ attention means E-Verify compliance now aligns directly with FCA exposure. Reinforcing verification processes, formalizing subcontractor controls, and maintaining audit-ready records are central to managing this emerging enforcement trend.