Companies who want to do work for the federal government may soon have to do some mouse-clicking on the Internet first to make sure there are no illegal workers on their payrolls.
A proposed rule that could potentially affect hundreds of thousands of companies and millions of American workers would require all companies working on federal contracts to electronically check the working status of all of their employees through a system called E-Verify. President George W. Bush signed an executive order proposing the new requirement earlier this month. The order can be found at http://edocket.access.gpo.gov/2008/pdf/08-1348.pdf
If adopted, the rule could have a big impact on employers across the country – and companies need to tread carefully to avoid losing contracts, facing liability or landing on a federal contractor blacklist.
“It’s going to have a dramatic impact on employers,” said Aimee Clark Todd, of counsel in the Atlanta office of Littler Mendelson. “We have seen the trend of increasing the requirement to use E-Verify [with some state laws]. But with a federal requirement, it will become much more expansive and reach more employers than ever.”
E-Verify is an Internet system operated by the Department of Homeland Security that checks the names and Social Security numbers of workers against Social Security Administration and Department of Homeland Security data.
Within seconds, the system either verifies that the information matches, or gives the employer a “tentative non-conformation.” It is up to the employee to resolve any mismatch with SSA officials.
Currently, the use of E-Verify is voluntary (although several states have rules requiring participation) and applies only to new hires.
The new rule would require all employees to be verified during the period a company is contracted to work on a federal project. The move could mean that hundreds of thousands of firms will have to sign up to participate in the program.

Big change

About 69,000 companies are enrolled in E-Verify currently, but Todd notes that about 20,000 are in Arizona alone, where state law requires it.
In the executive order, Bush cites the desire to promote economy and efficiency within the federal government procurement process. When unexpected immigration problems affect workers on federal worksites, costly project delays can ensue, even when the immigration issues are unknown to the employer, Bush said in the announcement of the order.
“Contractors that adopt rigorous employment eligibility confirmation policies are much less likely to face immigration enforcement actions … and they are therefore generally more efficient and dependable procurement sources than contractors that do not employ the best available measures to verify the work eligibility of their workforce,” Bush wrote. “[The] electronic employment verification system … provides the best available means to confirm the identity and work eligibility of all employees that join the federal workforce. Private employers that choose to contract with the federal government should meet the same standard.”
The rule can become effective only after regulations are promulgated for its adoption. Draft regulations were published in the Federal Register on June 12, opening a 60-day public comment period. Comments can be submitted at http://www.regulations.gov.
The order drew fast and mixed reactions from lawmakers, legal advocates and business executives. At a June 10 congressional hearing, Rep. Ken Calvert, R-Calif., praised the move.
“E-Verify is not perfect. But it is a very good system that has safeguards to ensure that employers’ and employees’ rights are being protected in accordance with the law,” Calvert testified at the hearing of the House Judiciary Subcommittee on Immigration, Citizenship, Refugees, Border Security and International Law.
Calvert has introduced a bill, H.R. 19, that would make E-Verify mandatory for all employers, but no action has been taken on that measure.
Calvert downplayed criticisms the E-Verify system uses the same database used for the “no match” rule – which was adopted by the federal government but halted by a federal court citing concerns over inaccuracies in the system. He said data shows the system works.
“[A] report shows 94.2 percent of all checks to the system are automatically verified,” Calvert said. “Of the 5.8 percent that do not receive instant verification, .5 percent [of employees] resolve the mismatch and the remaining 5.3 percent walk away from the process entirely. Why do they walk away? Because E-Verify is denying jobs to illegal workers.”
Glenda Ingram, director of human resources for the Embassy Suites Convention Center in Washington, D.C., said the system provides a strong deterrent to illegal workers.
“In August 2005 when we were opening [we] hired 175 new employees using the E-Verify program,” Ingram testified at the hearing. “During the hiring process we posted notice and verbally told each potential new hire we utilize the E-Verify program. I firmly believe this helped us to eliminate hiring applicants who did not have the legal paperwork required to work for the hotel.”

Employers as immigration enforcers?

Critics of the rule say employers should not be put in the position of enforcing federal immigration laws.
Christopher Williams, director of the Chicago-based Working Hands Legal Clinic, said the burden on smaller companies would be heavy.
“There are over six million employers in the U.S., many of which are small, have no human resources staff and limited resources to get access to legally accurate information, and even less time to become compliant with a mandatory E-Verify system,” Williams said. “Many employers will be ill-equipped to be the frontline of immigration enforcement [applied] in an uneven and often unfair way.”
For example, Williams had a client who was a Mexican immigrant. He gained U.S. citizenship and then received a tentative “non-confirmation” under the E-verify system. Although SSA officials eventually confirmed there was an error in the data, the employer refused to hire him.
“Our legal clinic has responded to the firings of literally thousands of workers in and around Chicago over the past two years based on misapplication or misunderstanding of the E-Verify program,” Williams said.

Employers should click with care

The new system could spell potential legal trouble for employers who don’t use it carefully.
Improper use of the system and the federal databases it uses could expose employers to liability. Companies who take adverse action against employees based on information provided by the system could face civil penalties – including being required to pay employees’ back wages. They could also be expelled from the E-Verify program, and unable to contract with the federal government.
Employers who anticipate seeking government contracts in the future should make sure their employment records are ship-shape now.
“Companies should review their procedures internally and review their I-9 procedures to ensure everything is in order, and they have the correct procedures in place before enrolling in E-Verify,” Todd said.
Employers should also adhere to all notice requirements before enrolling in E-Verify, telling job applicants about the use of the program and posting notices in the workplace of the company’s participation.
But companies can’t jump the gun.
They are prohibited from using E-Verify to check the status of current employees before the final rule is adopted and before the employer seeks a government contract. Until then, the program is only open on a voluntary basis for employers to check the status of new hires.
“[Companies] cannot use E-Verify as a pre-screening tool,” Todd said. “They cannot enter an employee’s information after he or she has been hired.”