Federal Government Immigration Measure Targets Contractors

A new proposed rule will permanently change the way federal contractors hire new workers. The rule would require contractors and subcontractors on federal construction projects to use a government database to verify the work authorization status of new and existing employees assigned to federal projects.

ASA will be submitting comments on the proposed rule and we need information about how this will affect members’ business operations.


Background

Since 1986, employers that knowingly hire an illegal worker are subject to penalties, referred to as “sanctions.”  “Knowing” includes both actual and constructive knowledge (i.e., that which can be fairly inferred). Employers can avoid sanctions by verifying employees’ work eligibility using an official government form, the I-9. Employers that properly complete and maintain I-9 forms are granted a safe harbor from sanctions.

On June 6, 2008 President Bush signed an executive order directing executive branch departments and agencies to require contractors to use a Department of Homeland Security (DHS) approved electronic eligibility verification system to verify the work authorization status of contract workers.

In response, on June 12, 2008, the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council proposed an amendment to the Federal Acquisition Regulation (FAR) to implement the executive order. The proposed rule would require federal departments and agencies to include, in all solicitations for goods and services over $3,000, a contract clause that requires the contractor, and all of his subcontractors, to use the federal E-Verify system.

The E-Verify system is a federal database that verifies that a worker’s name, date of birth and Social Security number all match government records. Under the proposed rule, contractors would be required to submit information for all new and existing workers assigned to work on federal projects. If a mismatch occurred, an employer would receive a tentative non-confirmation notice and be required to notify the worker in writing. The worker would then have to indicate whether or not he or she planned to contest the notice.

If the worker contested the notice, the employer would be required to provide a “Referral Letter” containing information about how to resolve the discrepancy. The employee would have eight federal government work days to resolve the discrepancy. During this period, the employer would be prohibited from terminating the worker. However, if the employee could not resolve the discrepancy, the employer would be required to terminate the employee or notify DHS of its continued employment of an unauthorized worker. Fines range from $500 to $1,000 for each failure to notify DHS of continued employment following a final non-confirmation.


What the Proposed Rule Would Do

Since it is not a final rule, the rule proposed on June 12 could change depending on how the issuing agencies address the comments they receive. As currently drafted, the rule would:

* Require federal contractors to enroll in the E-Verify program within 30 days after being awarded a federal contract.

* Require federal contractors to use E-Verify to verify the work authorization status of all employees assigned to the contract.

* Require federal contractors to use E-Verify after the contract is awarded to verify the work authorization status of all new employees, even those that do not work on the federal contract, within three days of their date of hire.

* Require federal contractors to require all subcontractors performing work under the contract in excess of $3,000 to abide by the same E-Verify requirements.

* Would NOT apply to existing federal contracts. The proposed rule would apply only to contracts awarded after the effective date of the final rule.

DHS is revising a Memorandum of Understanding (MOU) that employers must sign when participating in E-Verify. Compliance with the MOU would be a performance requirement under the contract so contract termination could be one consequence of failure to abide by the MOU.

The proposed rule can be viewed here:

http://edocket.access.gpo.gov/2008/pdf/E8-13358.pdf


ASA Needs Feedback from Members

ASA will submit comments on the proposed rule and invites feedback from ASA members. Explaining how this new regulation will affect subcontractors will be integral to ASA’s comments. Please direct all comments to:

Freeman Smith
ASA Director of Government Relations 
fsmith@asa-hq.com
by July 15, 2008

Some questions to consider:

1. Will the additional steps necessary to verify a worker’s eligibility to work impose a burden on your business? If so, how? Can you quantify the additional burden in terms of time and money?

2. What could the government do to make compliance with the rule less of a burden on your business?

3. Social Security Administration no-match letters are issued when a worker’s name and Social Security number do not match government records. How many of your employees typically are the subject of no-match letters? (This could be a good barometer of how many of your employees you would not be able to verify through E-Verify.)

4. What is your estimate of the percentage of your workers for whom you might have problems verifying their eligibility to work?

5. Does your company have the computer hardware and Internet connection necessary to use E-Verify?

6. Do you have the staff necessary to comply with the new verification requirements and maintain proper records?

7. If a newly hired employee contested a tentative non-confirmation and you could not fire him or her during the required eight-day resolution period, what costs would your company incur as a result of having to train and then hire and re-train a new worker for the position?

8. Would the proposed rule impose any new record keeping or paperwork burdens on your business? If so, what would the costs be on a per-employee basis?

9. Would the proposed rule affect your ability to hire the workers necessary to complete future federal contracts? How would this affect your ability to expand and build your business?

10. What other impacts would this proposed rule have on your company?


Submitting Individual Comments on the Proposed Rule

In addition to comments being compiled and prepared by ASA, all members are encouraged to submit their own comments on the proposed rule directly to the government. To do so:

1. Visit the Federal eRulemaking portal at: http://www.regulations.gov.

2. Under the heading “Comment or Submission,” input “FAR Case 2007–013.”

3. Select the link “Send a Comment or Submission” that corresponds with FAR Case 2007–013.

4. Follow the instructions provided to complete the ‘‘Public Comment and Submission Form.”

5. Be sure to include your name, company name (if any), and “FAR Case 2007–013” on any attached document.

Note: All submissions will be publicly posted on http://www.regulations.gov  so you may want to omit confidential company or personal information.

Please send a copy of your individually submitted comments to:

Freeman Smith
ASA Director of Government Relations
fsmith@asa-hq.com

Additional Steps You Can Take

Send an e-mail to your members of Congress.

To e-mail your representative in the House go to http://www.house.gov/ and enter your ZIP code in the box in the upper left-hand corner.
To e-mail your Senators go to http://www.senate.gov/ and enter your state under “Find Your Senators” in the upper right-hand corner.

Questions? Contact:

Freeman Smith
ASA Director of Government Relations
(703) 684-3450, Ext. 1321
fsmith@asa-hq.com