Trex gets a Q3 sales bump
Composite decking manufacturer Trex Co. reported net sales of $70.8 million for the third fiscal quarter, a 4.2% rise over net sales of $67.9 million for the same quarter in 2011. The company reported a net loss of $14.3 million for the quarter, which ended Sept. 30, compared with a net loss of $0.5 million the prior-year period. Before a one-time charge during the third quarter of 2012 — a $20 million pre-tax increase to its warranty reserve for decking material — net income was $6.2 million.
In a prepared statement, chairman, president and CEO Ronald Kaplan said that warranty claims may continue to be a drag on the company’s earnings. “Although the rate of claims in 2012 has dropped off at a healthy pace — and we expect reductions to continue in subsequent years — it is now apparent that the declines will not be at the rate previously expected,” Kaplan said. “This not only has an impact on this year’s claims rate, but also on the rate of expected future claims.”
Trex is introducing a new line of capped decking, the chief executive said, to build on the trend of “ultra low maintenance products.” The Winchester, Va., manufacturer has also entered the vinyl railing category and is adding a new line of aluminum railing.
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E-Verify could become mandatory
E-Verify has found a champion in presidential candidate Mitt Romney, who would make the federal electronic employee verification system mandatory nationwide so that U.S. employment would become less of a magnet for illegal immigration.
But while E-Verify has become less error-ridden and more popular among employers than it used to be, it remains easy to fool, costly and widely ignored in states where it is required, according to a Sept. 25, 2012, report.
Hodgepodge of state laws
Already six states — Alabama, Arizona, Louisiana, Mississippi, South Carolina and Tennessee — require employers to use E-Verify for all new hires, said Kevin Lashus, an attorney with Jackson Lewis in Austin, Texas, to SHRM Online Oct. 23, 2012.
Georgia, North Carolina and Utah mandate E-Verify for employers that meet each state statute’s employee threshold, according to LawLogix.
Various other states have made E-Verify mandatory for public employers and state contractors. E-Verify became mandatory for federal contractors’ new hires and employees in 2009. In addition, some municipalities require the use of E-Verify.
In Arizona, the first state to make E-Verify mandatory, Romney remarked during a Feb. 22, 2012, debate, “I think you see a model in Arizona.” He added, “This E-Verify system allows employers in Arizona to know who’s here legally and who’s not here legally.
“As a result of E-Verify being in place, the number of people in Arizona that are here illegally has dropped by some 14%, where the national average has only gone down 7%,” Romney said.
President Barack Obama “is a proponent of E-Verify in its current form — mandatory for federal contractors, voluntary for the rest,” according to Lashus. “E-Verify may be a part of a broader comprehensive immigration reform package, but the president hasn’t unveiled his plan yet.”
Initially riddled with a high error rate, some of E-Verify’s glitches have been addressed, Lashus noted. E-Verify consequently has become more popular. More than 353,000 employers use E-Verify at nearly 900,000 worksites, according to the U.S. Citizenship and Immigration Services, and approximately 1,200 new businesses sign up for the program each week.
Despite E-Verify’s improvements, employers should be “a little wary” of it becoming mandatory, Lashus said.
Mary Pivec, an attorney with Williams Mullen in Washington, D.C., said some bugs still haven’t been worked out. “Savvy employers know that absent biometric controls, the E-Verify system is very easy to fool,” she said. “For I-9 and E-Verify purposes, if an employee provides identity and employment verification documents that related to another individual, there is no way for the E-Verify system to detect the fraud. The employer is responsible for comparing the photo identification document provided against the employee’s personal appearance to determine if there is a match during the I-9 completion process. Unfortunately, this is frequently not done with field and remote hires.”
The advent of E-Verify’s photo screening tool “did truly make a difference, as E-Verify now is very good at identifying false green cards and employment authorization,” said Bonnie Gibson, an attorney with Fragomen in Phoenix.
But some have found a way to make an end run around the photo tool. “Now many falsely documented employees present state drivers’ license and Social Security cards instead — and the photo match does not include these documents,” Gibson remarked. “If the policymakers are serious about using E-Verify to make a real difference in reducing undocumented employment, as opposed to dealing only with optics, the government either has to find a way to link to all state databases, including photos — a huge undertaking — or move toward an E-Verify process that recognizes only federal documents — another huge undertaking.”
And according to a recent Cato Institute report, E-Verify has an inaccuracy rate of 4.1% — 3.3% from unauthorized workers erroneously found to be work authorized and 0.8 percent legal workers wrongly identified as unauthorized. “E-Verify fails to identify 54% of unauthorized workers, due primarily to employment-based identity fraud,” the report states.
E-Verify also is expensive, the report adds, noting that each E-Verify query costs $147.
In a Sept. 14, 2011, letter to Rep. Lamar Smith, R-Texas, opposing the proposed Legal Workforce Act (H.R. 2885), The Main Street Alliance said that if E-Verify had been mandated in 2010, it would have cost the nation’s employers $2.7 billion. “Small businesses would bear the bulk of these costs, paying millions of dollars to verify employees’ work eligibility in this time when we’re trying to stretch every dollar to meet payroll, keep people employed and find ways to grow our businesses and create jobs,” the organization wrote.
“States that have adopted mandatory E-Verify and punitive measures against employers and employees for violating the nation’s immigration laws have experienced economic decline and loss of tax revenues — secondary to the exodus of employers and employees,” Pivec said.
Most surprisingly, the report said that many employers in Arizona “are widely ignoring the E-Verify mandate.” Only 72 percent of new hires — 962,140 out of 1.3 million — were checked through E-Verify in the state in 2010.
The law has two big loopholes, the report noted. First, independent contractors do not have to be run through E-Verify.
Secondly, self-employed people and entrepreneurs do not have to be checked with E-Verify. This loophole and the slow economic recovery partly account for the 73% increase in self-employment and entrepreneurial activity in Arizona from 2006 to 2011, according to the report.
‘National security issue’
“These loopholes allow many unauthorized workers to move deeper into the informal economy, where they are paid cash, do not receive a W-2 and do not have taxes taken out of their paychecks,” the report stated.
Industries frequently raided to enforce immigration laws include restaurants, construction and manufacturing. And unauthorized immigrants are estimated to represent between 25% and 90% of all farm workers nationwide.
“Raising the price of labor will incentivize farmers to shift production to less profitable crops that can be harvested by machines, shift production across the border or scale back farming altogether,” the report predicted. “Legal workers are unable to fill the gap because the H-2A visa program is too bureaucratic and too expensive, and the wages that most legal workers demand are too high to make crop production profitable.”
Gibson shared the report’s concern, saying, “U.S. agriculture cannot survive mandatory E-Verify. I think we should discuss the need for agricultural labor as a national security issue. Many say that there would not be an agricultural shortage if wages and benefits were higher. I don’t know whether that is true or not, but I also think that what the average American can afford to pay for food is also part of the national security discussion we need to have.”
Allen Smith, J.D., is manager, workplace law content, for SHRM.
©2012 SHRM. All rights reserved.
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Social Security Administration has a much better system to validate personal identifiers called Consent Based SSN Verification (CBSV) service. Although it’s been around since 2002, you may not have never heard about it. CBSV trumps E-Verify in many ways: 1) CBSV is more accurate as it matches Name, SSN, Date of Birth, Gender, and Death Indicator to the SSA Master File and Death Index. 2) CBSV is valid pre-hire; E-Verify is NOT valid pre-hire. (Question: Why hire an applicant, run E-Verify, find them unauthorized, then terminate them? Tremendous waste of time, effort, and money. Use CBSV first!) 3) CBSV is valid to use on EXISTING EMPLOYEES to ensure an authorized workforce; E-Verify is NOT. 4) CBSV is used for all business purposes; applicants, clients, students, tenants, policyholders, loan originations, depository accounts, fraud investigations, collections, and to strengthen compliance policies. Faulty E-Verify is used for only one reason; post-hire on new job applicants. E-Verify beats CBSV in only one area: Marketing. E-Verify has a fancy logo, a slick website, and is advertised (with your tax dollars) in print (e.g., Forbes Magazine) and online (e.g., LinkedIn). CBSV is the superlative personal identifier validation methodology. If you’re not using it, you’re allowing 80% of preventable fraud. For details visit http://www.ssa.gov/cbsv and then an authorized CBSV Agent such as https://www.idvalidation.net