WASHINGTON — Federal contractors will have to verify new employees' citizenship status to make sure they can legally work in the United States, Homeland Secretary Michael Chertoff announced Monday.

President Bush signed the executive order Friday, and Chertoff included the new requirement in an update of the administration's work on immigration Monday, along with a progress report on the border fence, enforcement at the Southwest border and U.S. passport cards.

"We know that only by promoting a legal work force can we reduce the incentives for people to come in illegally," Chertoff said. "The federal government should lead by example and not merely by exhortation."

Previous bills in Congress had worker-verification programs, but they did not go through when the immigration-reform bills failed in 2006 and 2007.

Chertoff designated the E-Verify system for contractors to fulfill the new requirement.

"That is a giant step forward," said Sen. Bill Hickman, R-St. George, sponsor of a new law in Utah, which will require, when it takes effect in July 2009, that the state's contractors use E-Verify.

"I am impressed, first of all, that it is being done," Hickman said. "I am not surprised it has to be done by executive order because the Congress of the United States doesn't have the guts to do it themselves."

Chertoff said E-Verify has been successful, with more than 70,000 employers enrolled in the program so far, and he said expanding it to federal contractors will be beneficial. There are currently 457 companies in Utah with 1,600 sites in Utah that participate.

Employers have run more than 4 million employment-verification queries so far in fiscal year 2008, with 99.5 percent getting cleared for employment.

"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," Chertoff said, adding that it is "embarrassing" when it's discovered that illegal workers are getting paid for jobs tied to federal tax dollars.

"We are going to make sure we finish getting our own house in order first, even as we work to continue to make sure that others and the private sector use this system," Chertoff said.

U.S. Rep. Chris Cannon, R-Utah, called the move "a good first step" toward the federal government setting an example.

"Enforcing the law within a system that works is good for American business, American labor and national security," Cannon said. "Finishing the fence and deploying E-verify are two giant steps forward to control the border."

However, critics have called into question efforts to mandate E-Verify, saying it's an imperfect system. A report last year by Maryland-based Westat found that 3 percent of foreign-born employees with work eligibility were no-matches, compared to 0.1 percent of U.S.-born employees.

Employees who are considered a no-match must get cleared to work through the Social Security Administration or U.S. Citizenship and Immigration Services, said Roger Tsai, a Salt Lake immigration attorney.

"Even if you are not an immigrant, even if you are born in the United States, you are going to have to be checked through this system," said Tsai. "There is a possibility the system is inaccurate."

Hickman expressed hopes the new requirement will lead to a more-accurate E-Verify system.

"It's the only tool we've had available, and it isn't totally effective," he said. "Now with the federal government utilizing it on this basis, it will become more effective."

The executive order ties hiring illegal aliens to creating an unstable federal workforce.

"A contractor whose workforce is less stable will be less likely to produce goods and services economically and efficiently than a contractor whose workforce is more stable," the executive order reads. "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."

Chertoff said this would only apply to new contracts or if new employees were hired to work on an existing contract. He said the money allotted for the program would be sufficient to handle the new requirement.

Also as part of the immigration update, Chertoff said that the government has so far constructed 328.7 miles of fence along the Southwest border toward its goal of completing 670 miles by the end of 2008.

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