Federal contractors, Congress and the Obama administration have yet another respite, this time until May 21, 2009, to decide what to do about E-Verify. In a notice to be published today in the Federal Register, contractors and subs who enter into covered agreements with the federal government need not enroll for now in E-Verify.

Meantime, Congress needs to decide the fate of this controversial Web 2.0 method, jointly developed by the Social Security Administration and the Homeland Security Department, for employers to determine the right of new hires and some current employees of federal contractors to work in the United States. Although embraced by many in federal and state government, E-Verify is technically on life support; its enabling legislation sunsets in the first week in March. Yet House proponents of the program have slipped into that chamber’s version of the economic stimulus bill racing to the President’s desk a requirement that every private employer receiving stimulus money enroll in E-Verify.

E-Verify still sports an unacceptably high rejection rate of roughly four percent, disqualifying a sizable component of the workforce from the jobs for which they may be authorized. It also requires a substantial investment of employer staff time and lost opportunity costs to manage the strict deadlines to resolve the feared TNCs (in bureaucratese, “tentative non-confirmations”). The TNCs are issued by federal cyber-cops to allow authorized workers to fight the government’s claim that they lack the right to work.

How does diversion of employer staff and mistaken, autopilot rejection of workers promote economic rejuvenation? The country is already moving quickly toward government control of the economy, with nationalization of banks and auto companies a real possibility. Can we afford to let the same government department that suffers the deaths of immigrants in detention stifle the national economy with a not-ready-for-prime-time program of authorized-worker rejection?