final rule published today that requires federal contractors and
subcontractors to screen workers and new hires through the E-Verify
system each year will put significant new burdens on those employers at
least in the short term, an industry representative said today.
is the automated system designed to allow employers to verify
employees’ and job applicants’ eligibility to work in the United
States. When an employer submits a person's name and personal
information, E-Verify checks the data against databases operated by the
Social Security Administration and Homeland Security Department to
confirm that person's legal residency.
President George W.
Bush signed an executive order June 6 that authored a change to the
Federal Acquisition Regulation to require federal contractors and
subcontractors to participate in E-Verify. The final rule specifies the
conditions of participation.
Under the new rule, which goes
into effect Jan. 15, the government estimates that 168,000 employers
will have to screen 3.8 million employees in 2009, up from the 70,000
employers using the system this year.
Contractors are worried
that E-Verify is not ready to handle a huge volume of activity and may
result in people being laid off or contracts being delayed until the
system can manage the larger volumes, said Trey Hodgkins, vice
president of federal government programs for the Information Technology
Association of America.
“Our concern is that the system is not
adequately scaled yet, and the delays that would be caused would
prevent companies from starting on contracts and may force them to lay
off or fire employees because they cannot obtain verification in a
timely fashion,” Hodgkins said. “These are the unintended consequences
and appear to be possibilities.”
The final E-Verify rule
inserts a clause into federal contracts that requires government
contractors and subcontractors to use the system to ensure employment
eligibility of all new hires, as well as all existing and new employees
directly performing work under federal contracts. It also orders prime
contractors to apply the requirements to subcontractors.
the rule to subcontractors may be “too broad,” Hodgkins said. The ITAA
had recommended that prime contractors would notify subcontractors of
the requirement, but the primes would not bear responsibility for the
subcontractors’ compliance, he said.
responsibility is unclear,” Hodgkins said. “It would be burdensome for
a company to have to do this for one or two subcontractors, but for a
major defense system, with thousands of subcontractors, the prime
contractor would have a major responsibility.”
The ITAA also
is examining the definition of covered employees, including whether it
includes any administrative personnel, and is looking into the final
rule’s handling of commercial items, which appear to be described using
terms that had been rejected in other federal contracting documents,
The government estimates that in 2009, under
the new rule, the cost of implementing the rule next year will total
$254 million. Over 10 years, the cost of the final rule is estimated at
The final rule raises the threshold for covered
contracts to $100,000, up from $3,000. It allows a contractor 90
calendar days, rather than 30 days as previously proposed, from
enrollment to using the system. It sets a deadline of 30 calendar days,
rather than three days, for employers to begin verifying existing
The final rule also exempts contracts for commercial off-the-shelf items.
has been operating on a small scale for more than a decade.The program
has been controversial due to the error rates in the federal databases
used to verify eligibility.
According to a report released in
June by the Government Accountability Office, 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 U.S. Citizen and Immigration Services.
Critics say those non-verification rates are the result of errors in
the databases and may result in loss of jobs among legitimate workers.
the E-Verify system cannot protect against workers using stolen
identity information and stolen Social Security numbers, according to
the GAO report.