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Employers are breathing yet another temporary sign of relief over the controversial E-verify rule, which mandates that federal contractors certify workers' immigration status through a government database.

For the fourth time this year, the federal government has delayed the start of the employment verification rule, from June 30 to at least Sept. 8.

The Department of Homeland Security rolled back the start date to allow President Barack Obama's administration more time to complete its review of the rule, which is facing a legal challenge from the U.S. Chamber of Commerce in federal court in Maryland. Department of Justice attorneys recently moved to stay the litigation, stating that more time is needed to review the rule. The judge signed the request on Tuesday.

Employers, meanwhile, are feeling less tense about E-verify -- at least for now.

"What I don't want employers -- our clients -- to have is a sense of security. Because of these delays people think this whole thing will go away. But come September, if they say, 'Okay, we're ready,' employers will not have thought about this, and they're going to find themselves in a really critical position," said Dawn Lurie an immigration compliance attorney in the McLean, Va., office of Greenberg Traurig. "I keep reminding our employers ... this [delay] is a perfect motivation to do an I-9 audit." (An internal I-9 audit seeks to verify that a company's employees are authorized to work in the United States.)

The E-Verify rule was part of an executive order issued by former President George W. Bush, which mandated that roughly 168,000 federal contractors begin using E-Verify in January. The order applies to contracts of more than $100,000 and subcontracts of more than $3,000.

Under E-Verify, employers electronically submit Social Security numbers for new hires and existing employees in an online government database. If there is a match, an employee is eligible for work. If not, an employee is tagged, and more assessments are made.

Employment lawyers, meanwhile, say the longer the government puts off implementing the rule, the better the chances are that it will get wiped out altogether, or emerge in a lighter, more employer-friendly form.

"I think we all have a sense that what ever emerges from this -- it's going to be different from what was in the original regulation," said Eric S. Bord, a partner in the Washington office of Morgan, Lewis & Bockius. "The rule itself -- I think that it's burdensome ... While it's nominally free, the reality is that it imposes tremendous costs on employers in terms of administrative time and changing procedures in overhead."

Bord also sees some liability issues tied to E-Verify.

"It creates exposure to employers who unwittingly use E-Verify improperly, thereby opening the door to discrimination claims," Bord said.

Lawrence Lorber of the Washington office of New York's Proskauer Rose, who represents the Chamber of Commerce in its lawsuit, is also pleased with the delay. He has a laundry list of concerns with the rule: It's illegal, ineffective, costly and overly-burdensome, he claims.

Lorber's lawsuit on behalf of the Chamber of Commerce challenges the government's use of an executive order coupled with federal procurement law to make E-Verify mandatory for federal contractors. It also challenges the rule's requirement that contractors reverify the employment eligibility of any current employee assigned by the contractor to perform work within the United States, arguing that such reverification is barred by federal law.

"We believe, quite candidly, it's illegal," Lorber said. "Employers cannot reverify people."

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