The Society for Human Resource Management and other groups filed suit Tuesday to stop a rule that will require federal contractors and subcontractors to use the Department of Homeland Security's E-Verify system.

E-Verify is a Web-based service for employers that checks information from I-9 forms against Homeland Security and Social Security Administration databases to ensure a worker is legally eligible to work in the U.S. The system may only be used after a worker has been hired and not for prescreening.

E-Verify is voluntary right now for all employers, although some states require its use. However, an executive order signed by President Bush mandates use of E-Verify by federal contractors starting Jan. 15. Firms must use E-Verify on employees directly working on federal projects and those hired during the contract term regardless of whether they are assigned to a federal contract. Exceptions include contracts less than $100,000 and less than 120 days in length.

SHRM argued in its lawsuit that authority to make such a mandate must come from Congress.

SHRM also said E-Verify would prove costly to federal contractors who already verify their workforces through the I-9 process. In addition, the lawsuit said it could expose employers to more lawsuits from workers who feel they were discriminated against on the basis of race or national origin.

"The E-Verify system is far from ready to be mandated on employers. Plus, the authority to mandate it lies with Congress, not a federal agency," said Mike Aitken, SHRM's director of government affairs. "SHRM believes the Administration is overreaching its authority by mandating an employment verification program designed by statute to be voluntary."

Other plaintiffs in the lawsuit include the U.S. Chamber of Commerce, Associated Builders and Contractors Inc., American Council on International Personnel and HR Policy Association.

The lawsuit names as defendants Michael Chertoff, secretary of Homeland Security; Albert Matera, chairman of the Civilian Agency Acquisition Council; and the United States.