Rule mandates E-Verify for contractor employees

About 168,000 federal contractors and subcontractors will need to enroll 3.8 million employees in E-Verify next year under a new proposed rule published in the Federal Register yesterday.

The federal contractors will pay the bulk of the $550 million cost of implementing E-Verify under the rule over 10 years, including $308 million for start-up and training costs, the notice states.

E-Verify is the Bush Administration's automated system for allowing employers to verify job applicants' eligibility to work as U.S. citizens, legal permanent residents and authorized immigrants. When an employer submits an applicant's name and personal information for eligibility verification, E-Verify checks the personal information against Social Security Administration and Homeland Security Department databases.

President Bush on June 6 signed an executive order requiring federal contractors and subcontractors to participate in E-Verify. The rule published on Thursday specifies a change in the Federal Acquisition Regulation laying out the conditions under which federal contractors must take part in E-Verify and the likely costs and impact of the rule.

Public comments are due by Aug. 11.

In the notice, it is forecasted that in fiscal 2009 there will be 168,324 contractors and subcontractors required to enroll in E-Verify due to the rule, resulting in an additional 3.8 million employees vetted through E-Verify.

Over 10 years, the federal contractors will pay the bulk of the costs of complying with E-Verify: $308 million in startup and training costs, $129 million for verifications, and $101 million for employee losses, the notice states. In addition, contracting employees will pay $3 million and the federal government, $8 million, for E-verify verification costs.

The rule states that all employees of federal contractors who are newly hired or are directly engaged in work on federal contracts would need to have their work eligibility checked through E-Verify. The rule applies to contracts of more than $3,000 with work performed within the United States.

In the initial contract start-up phase, employees assigned to the contract must be verified within 30 days, but after the initial period, the verifications must occur within three days, the notice said.

"The E-Verify System is expected to help contractors avoid employment of unauthorized aliens and will assist federal agencies to avoid contracting with companies that knowingly hire unauthorized aliens," the rule states.

About 70,000 employers nationwide are currently participating in E-Verify. The system has been operating for more than a decade, previously as the Basic Pilot program. It has been controversial due to the error rates in the federal databases used to verify eligibility.

About 7 percent of the queries to E-Verify cannot be verified immediately by the Social Security Administration, and about 1 percent cannot be immediately confirmed as work-authorized by the U.S. Citizen and Immigration Services, according to a June 10 report from the Government Accountability Office. Critics say those non-verification rates are due to errors in the databases and unfairly penalize many legitimate workers.

Furthermore, the E-Verify system cannot protect against workers using stolen identity information and stolen Social Security numbers, according to the GAO. Some critics say increased use of E-Verify may result in a rise in identity theft.