Millions of contract employees to be vetted for legal employment status

Millions of contract employees to be
vetted for legal employment status

By Robert Brodsky rbrodsky@govexec.com

Federal contractors will be required to vet nearly 4 million current and future employees through an online government database to verify their legal working status, under a proposed rule published last week in the Federal Register.

The Federal Acquisition Regulation notice, however, does not resolve questions about how the government will oversee the system or punish companies that fail to fire illegal immigrants.

President Bush issued an executive order on June 9 requiring that, as a condition of all future federal contracts, companies must agree to use E-Verify, an electronic employment eligibility verification system. The program currently is voluntary for private sector companies but mandatory for federal agencies.

The rule would apply to all future contract employees and existing employees once they begin working on new contracts. Current indefinite-delivery, indefinite-quantity contracts would be amended so the rule applies to all future task orders.

The rule also applies to federal subcontractors.

In its initial year, the government expects nearly 170,000 contractors and subcontractors will enroll in the system, verifying the status of roughly 3.8 million employees. The program is expected to cost contractors more than $100 million in the first year and between $550 million and nearly $670 million during the next 10 years. The cost to the government would be significantly less, an estimated $8.2 million during the next decade.

The rule exempts employees working on contracts performed outside of the United States, those hired before Nov. 6, 1986, contracts valued at less than $3,000, and subcontracts for materials only for commercially available products.

"E-Verify, working with these other agencies, is going to give these contractors the tools they need to make sure that workers who were hired to work on federal contracts are legal workers," said Michael Chertoff, secretary of the Homeland Security Department, which administers the system, at a press conference last week. "It is always embarrassing, frankly, when we have these periodic operations in which we discover illegal workers working on federal projects paid for by federal money that is ultimately paid for by the taxpayer."

The proposed rule inserts a clause into all future government contracts requiring companies to verify the status of their new and existing hires through E-Verify within 30 days of the contract award.

"Contractors that use E-Verify to confirm the employment eligibility of their workforce are much less likely to face immigration enforcement actions, and are generally more efficient and dependable procurement sources than contractors that do not use that system to verify the work eligibility of their workforce," the notice stated.

In an attempt to reduce potential identity theft, workers will be required to supply their employers with both a Social Security number and photo identification. The contractor will put that information into the E-Verify system, which will tell the employer immediately if the worker is legally allowed to work in the country.

If the database is unable to confirm the employee's status, the worker will receive a "tentative nonconfirmation" notice and have eight days to settle the issue at a Social Security Administration office. If the worker fails to contest the finding or is unable to furnish proof of legal status, the employee must be fired, the rule states.

About 6 percent of employees vetted through E-Verify receive a tentative nonconfirmation letter requiring further action, said DHS spokeswoman Amy Kudwa. The majority choose not to contest the findings.

Companies that do not terminate the employment of nonverified workers face a fine of $500 to $1,000, the rule states. Contractors that break the rule, however, would not necessarily lose their contracts or face suspension or debarment.

"Suspension and debarment are really serious matters," Kudwa said. "These sanctions will occur only when it's in the public's interest."

The Federal Acquisition Regulation already provides federal officials with the authority to terminate a contract or to recommend suspension or debarment proceedings for companies that knowingly hire illegal workers.

And while contractors must agree to participate in E-Verify, there does not appear to be a system in place to confirm after the fact that they have done so.

Alan Chvotkin, vice-president of the Professional Services Council, a contractor trade group, suspects that federal watchdogs will conduct spot checks and perform periodic system reviews to verify that companies are complying with the rule. But he admits that it would be virtually impossible to audit every company's compliance.

"There's an element of truthfulness to it," Chvotkin said. "But we don't audit contractors' tax compliance. We don't presume that they have violated the rules."

Critics also have raised concerns about the reliability of E-Verify data. In December 2006, SSA's inspector general found that the database had an error rate of 4.1 percent.

Chertoff indicated last week that glitches in the system had been fixed, noting that the current error rate was down to 0.5 percent.

More than 69,000 companies currently use E-Verify, and the number of registered employers is growing by an average of more than 1,000 per week, DHS officials said.

Terrill: Bush decree undermines ruling

Terrill:

Bush decree undermines ruling
Marie Price
The Journal Record June 12, 2008

OKLAHOMA CITY – The principal author of Oklahoma’s immigration law thinks a new executive order issued by President Bush undermines last week’s federal court order temporarily blocking enforcement of parts of the law.

An official with the National Chamber Litigation Center, representing one of the plaintiff groups challenging the law, disagrees.

State Rep. Randy Terrill, R-Moore, issued a statement Tuesday saying that Bush’s order requires anyone contracting with the federal government to use the E-Verify system to check on the work status of employees.

“Judge (Robin) Cauthron claimed federal law does not allow the use of E-Verify to ensure an employee is a legal citizen or resident of the United States, but now President Bush has ordered federal officials to use the system for that explicit purpose,” Terrill said. “It’s clear the judge’s decision was based on an incorrect reading of the law.”

Not so, says Robin Conrad, executive vice president of the Washington, D.C.-based chamber litigation center.

The executive order in no way undermines the court order, “which properly recognized the ‘substantial likelihood’ that HB 1804 is pre-empted by federal law,” Conrad said Wednesday in an e-mailed reply to Terrill’s contention.

“As the court correctly held, federal law expressly prevents states from acting in this domain,” Conrad said.

The president’s order relates only to the ability of the federal government to mandate use of the Basic Pilot program by its own contractors, “but says nothing whatsoever to suggest that states may do so,” she added.

Conrad also said that the executive order is only the first step in a lengthy administrative process.

“There are serious doubts about its legality,” she said, “and, at the end of the day, it is for the federal courts to interpret federal law, not the executive branch.”

Last week, U.S. District Judge Robin Cauthron issued a preliminary injunction blocking enforcement of certain portions of the state immigration law that are scheduled to take effect July 1.

The Chamber of Commerce of the United States and several Oklahoma chamber and business groups are challenging those sections’ legality.

Some challenged language requires businesses to verify the work-authorization status of independent contractors or be required to withhold state income taxes at the top marginal rate.

Another section under challenge requires contractors who want to do business with the state to participate in a status-verification system for new hires.

Other parts of the law have been in effect since November of last year.
Terrill said that Cauthron’s ruling is inconsistent with decisions from other jurisdictions.

“Now President Bush’s executive order makes it obvious the judge’s ruling was wrong and should be overturned,” the lawmaker said.

Judge's 1804 Ruling Undermined by Presidential Executive Order

A judicial ruling to halt implementation of the private employer provisions of House Bill 1804, the state's omnibus anti-illegal immigration law, was undermined this week by a presidential executive order, state Rep. Randy Terrill noted today.

"It was clear from the very beginning that Judge Cauthron's ruling was inconsistent with recent decisions in other similar cases, most notably in Missouri and Arizona," said Terrill, a Moore Republican who authored House Bill 1804. "Now Present Bush's executive order makes it obvious the judge's ruling was wrong and should be overturned."

Last week, Judge Robin Cauthron issued a ruling that prevents implementation of the private employer provisions of House Bill 1804.

Those provisions would have required employers contracting with the state government to verify that their employees are not illegal aliens by using a simple federal database (E-Verify), allowed Oklahoma citizens
to sue an employer who fired them while retaining an illegal alien to perform the same job, and required businesses to check the citizenship status of independent contractors.

In that ruling, Cauthron claimed "federal law prohibits use of the Status Verification Systems to verify employment eligibility."

That claim was contradicted this week by President George W. Bush when he issued Executive Order 12829, which requires anyone contracting with the federal government to use the E-verify system.

Bush's order stated, "It is the policy of the executive branch to enforce fully the immigration laws of the United States, including the detection and removal of illegal aliens and the imposition of legal sanctions against employers that hire illegal aliens" and noted that E-verify "provides the best available means to confirm the identity and work eligibility of all employees that join the Federal workforce."

"Judge Cauthron claimed federal law does not allow the use of E-Verify to ensure an employee is a legal citizen or resident of the United States, but now President Bush has ordered federal officials to use the system for that explicit purpose," Terrill said. "It's clear the judge's decision was based on an incorrect reading of the law."

Terrill noted that other complaints of House Bill 1804 opponents are also falling apart.

Although business groups claim E-Verify is burdensome for employers, Stewart Baker, an assistant secretary for policy at the U.S. Department of Homeland Security, recently wrote, "In fact, it's a bit less burdensome than ordering books for the first time from Amazon.com."

In articles posted on the agency's "Leadership Journal", Baker dismantled many of the claims of E-Verify critics.

To use E-Verify, he noted the employer must enter data about a new hire such as name, social security number, date of birth, and other data that employers already record on federal forms.

"Anyone who has seen it done once can do it, and the process takes a few minutes," Baker wrote. "Understanding the rules that go with the process requires a bit of online training, but that takes at most an hour or two.

Plus, E-Verify makes it unlikely that a company will get a Social Security Administration notice at the end of the year indicating that some of its new hires have Social Security Numbers that don't match their names. So time spent now on verification will save hassles later."

"One by one, the criticisms of House Bill 1804 are being dismantled and it's becoming clear opponents of the law have just one goal - the continued exploitation of cheap illegal alien slave labor to drive down the wages paid to Oklahoma citizens," Terrill said. "Oklahoma can do better and we will when Judge Cauthron's poorly reasoned decision is overturned."