The notice fleshes out an executive order President Bush issued on June 6 directing contractors to use the E-Verify system to check workers’ status. Marco Giamberardino, senior director of the Associated General Contractors’ federal and heavy construction division, says the proposed rule contains specifics that the Bush order lacked. He says AGC has questions about the plan, including what it means for materials suppliers.

What the Proposed Rule Would Mean:

Employers must use E-Verify system to confirm workers’ legal status.

Applies to a company’s new hires and all its workers hired since Nov. 6, 1986.

Applies to federal contracts of more than $3,000.

Applies to construction and services subcontracts exceeding $3,000.

Overseas federal contracts are exempt (State Dept. embassies, DOD projects).

Companies would have 30 days after contract award to sign up for E-Verify.

Employers’ compliance cost estimated at $538 million over 10 years.

Source: Federal Register, June 16, 2008

E. Colette Nelson, American Subcontractors Association executive vice president, says ASA doesn’t think E-Verify will achieve the administration’s goals in the most efficient and effective way. Nelson also says, “The inclusion of subcontractors, particularly at the $3,000 amount, is gratuitous.” She says the executive order does not require such a threshold, nor is it comparable to levels under other contracting programs.

The proposed mandates would apply to solicitations issued and contracts awarded after a final rule’s effective date. That date isn’t known yet; comments on the proposal will be accepted through Aug. 11 and will take weeks to review. But Dept. of Homeland Security Secretary Michael Chertoff says officials are looking forward to having the program “up and running later this year.”

The compliance cost for the proposal is estimated at $550.3 million over 10 years, 98% of it borne by employers. Start-up and training are the main items, pegged at $308.3 million. “We really do think that they underestimate the impact on employers, particularly with how error-prone the [E-Verify] system is,” Nelson says. But Chertoff says E-Verify “has been a tremendous success,” with about 1,000 companies joining weekly.

E-Verify is a pilot program, slated to expire in November. Giamberardino says AGC’s discussions on Capitol Hill indicate there is support in Congress to reauthorize E-Verify “in some capacity.”

s its term nears an end, the Bush administration is pushing to require federal contractors, including construction firms, to use an electronic system to prove their workers are legally authorized to work in the U.S. The plan, spelled out in a proposed regulation published in the Federal Register on June 12, is far-reaching. It would cover all federal contracts and construction subcontracts of $3,000 or more. Contractors would have to verify the status not only of their new employees but also those hired as far back as 1986.