Government to Require Federal Contractors to Use E-Verify

Following President Bush’s executive order requiring all federal contractors to use an electronic verification system to avoid employing illegal immigrants, the government published a proposed rule in the Federal Register on June 12.

The Department of Homeland Security Secretary Michael Chertoff has designated E-Verify, the Web-based system operated by the U.S. Citizenship and Immigration Services, as the tool it will require contractors to use.

Comments from the public are accepted until Aug. 11. In a state of immigration address earlier this month, Chertoff said the administration hopes to implement the system this year.

The proposed rule requires that certain federal contracts (generally those over $3,000) contain a clause requiring the contractor and certain subcontractors use E-Verify to verify employment eligibility of all newly hired employees and all existing employees directly engaged in the federal work. The goal is to help federal agencies avoid contracting with companies that knowingly hire illegal workers. It also helps the government ensure compliance with the nation’s immigration laws and protects U.S. workers by discouraging companies to hire illegal immigrants who may drive down wages.

About 70,000 employers are currently enrolled in E-Verify, formerly known as Basic Pilot. From a federal standpoint, using the system is voluntary; however, 11 states have E-Verify requirements on the books. Arizona requires all businesses to use the system when making new hires; other states just require government contractors to do so.

DHS does not have an exact figure on how many businesses will be affected, but it may affect “hundreds of thousands, if not millions” of workers, Chertoff said.

One business that may be affected is Fox Run Nurseries, an Alexandria, Va.-based full-service landscape company. About 60 percent of Fox Run’s business comes from federal, state or local government contracts. Owner Lou Kobus says his company is not using E-Verify yet, but he’s prepared to move in that direction when it becomes a requirement. Fox Run has about 60 employees. “You won’t find the legitimate contractors are worried about this,” he says, adding he’s not concerned about the administrative side of it. “It’s just another cost of doing business.”

Senske Lawn & Tree Care/Senske Pest Control, a $19-million company in Kennewick, Wash., is another green industry firm with federal contracts. Since learning of the executive order, the company’s human resources representative has begun the registration process. “I really don’t see much impact on our hiring process,” says Gene Chafe, Senske’s federal contracts administrator. “We already require DMV records checks, drug screenings and criminal background checks. The E-Verify process seems pretty simple, and I wouldn’t anticipate the process to take more than a few minutes to complete.”

Though landscape contractors aren’t bracing for a big impact, the proposed rule has many critics. The American Civil Liberties Union is one of the most vocal in asserting the system will fuel the black market for identity theft. “E-Verify or a similar electronic employment eligibility verification system will exacerbate, not decrease, the incidence of identity theft,” said Timothy Sparapani, ACLU’s senior legislative counsel said in a Congressional subcommittee hearing earlier this month. “Requiring each worker to present his or her identity to be granted permission to work will lead some desperate undocumented immigrants – and those who smuggle and illegally employ them – to steal the identities of work-eligible American workers. In short, the identities of work-eligible individuals will become commodities for borrowing and sale.”

Kobus agrees that the system isn’t foolproof. “You can find out if the Social Security Number is a good one, but that doesn’t tell you if he’s legal or not,” he says.

Additionally, Kobus questions the government’s ability to enforce and administer such a requirement. But he does say there may be some benefit: Leveling the playing field between “legitimate” companies and “low-ballers.” “Government contracts have been going for dirt cheap over the last two years,” he says, citing one multi-million dollar contract where the lowest bidder came in 60 percent less than the second-lowest bid. Kobus says such companies have to be paying illegal immigrants less than the required wages to bid this low. “Those are the things that are happening, so thank goodness those companies won’t be around for much longer.”

Tom Delaney, director of government affairs for the Professional Landcare Network, adds that such a rule may heat up the immigration debate once again. “But then again, McCain and Obama don’t even want to talk about immigration, so I guess we’ll see.”