It began so modestly... a system federal contractors were required to use in order to verify whether their employees assigned to work on federal contracts were legally allowed to work in the U.S. Today, the question for every employer, not just federal contractors, is whether it makes sense to sign up for E-Verify as the least costly and risky approach to immigration compliance. Of course, all employers have been required since 1986 to complete a form I-9 for all new hires, and properly doing so creates a presumption that an employer has not knowingly hired an illegal alien. Why, in the absence of a mandate, should an employer undertake a second verification process?
First, the federal government currently is considering whether to expand E-Verify to all employers rather than just federal contractors. The House of Representatives is likely to pass such a bill and the Senate may well do so. President Obama has indicated his willingness to agree but wants to couple it with a program for legalizing unauthorized workers. Factor in a presidential election, and we may see stalemate, denial or a contest to see which party can outdo the other in targeting unauthorized workers. But with E-Verify already functioning, and given the "mission creep" common to many federal programs, it seems inevitable that the U.S. will have a universal E-Verify requirement in the next few years. We can anticipate that such a law would provide exceptions only for small local employers.
Second, politicians in a growing minority of states have in recent years decided to fight employment of unauthorized workers by enacting laws that seek to force employers to use E-Verify. One problem for employers is that these laws vary wildly. Nebraska is an example of a limited mandate: E-Verify is required only for state and local agencies, and private employers who contract with them. Arizona took the universal punitive approach, threatening all private employers of at least five employees with the loss of their business licenses if they are discovered to have hired unauthorized workers whose status they failed to confirm through E-Verify.
In the absence of federal legislation that preempts state law, we are likely to see more states impose some form of E-Verify use on employers. Given the continued political pressure over unauthorized workers, a majority of the states can be expected to do so in the next few years. Any business with a regional or national market needs to consider whether it would simply be easier to minimize the potential for immigration compliance problems by participating in E-Verify now.
A third possible outcome would be a universal federal E-Verify mandate that allows the states freedom to impose their own additional sanctions. Employers already struggle to keep up with the differing legal rules of 51 jurisdictions across the broad range of employment topics such as human rights and family leave. E-Verify might be one of the rare examples of an employment issue with a single answer.
That answer is to integrate E-Verify into the company's employment process now. Employers should already have a functioning Form I-9 process in place, and it is simple to build on that a description of the key steps and timing involved in an E-Verify work authorization check. The same persons responsible for ensuring I-9 completion can be tasked with performing the E-Verify check and preserving a record of the result.
As with any other compliance program, E-Verify comes with costs and risks. The Department of Homeland Security (DHS) promotes E-Verify as a free service but that just means the federal government is not charging employers for access - at least not yet. However, the employer will have to train an employee to use E-Verify and may have to hire additional HR staff depending on new-hire volume. The real cost and risk is not with the input of data into the online E-Verify system (typically just a name and social security number) but instead arises if the employer receives back what is known as a tentative non-confirmation (TNC) of work authorization.
Here is the typical case. The employee fills out the I-9 form on her first day of work. The HR clerk uses the I-9 information to input data into E-Verify. The employee may have married, divorced or be using a hyphenated name, all common reasons for a TNC. If E-Verify responds with a TNC, the employer cannot fire or take any adverse employment action against the new employee. Instead, the employer must privately review the TNC notice with the employee and request the employee to indicate on the notice whether she will contest it, then sign the notice along with the employee and keep a copy for the file. The employee then has eight federal workdays to contact the government agency to resolve the matter. Meanwhile, the employer cannot ask the employee about it and, most importantly, must allow her to continue training and working. The employer may only continue to log into E-Verify to see whether the TNC has been withdrawn or replaced by a final non-confirmation or a note that the employee was a no-show for the agency review.
If the final outcome in E-Verify is anything other than a confirmation of eligibility to work, the employer now has to consider whether to fire the employee. Interestingly, E-Verify does not require termination but only that the employer records in E-Verify whether termination occurred. Suppose the employer believes that the employee is eligible to work and that the problem arises from an inaccuracy in the government databases. The employer has now invested perhaps a month in the employee and does not want to have to start over with a replacement. The employer could well decide those costs support the employer accepting the risk of being mistaken about the employee's work status. Unfortunately, because an employer must record in E-Verify its retention of a non-confirmed employee, the employer becomes an easy target for enforcement.
But how big a problem is it to address a TNC? According to U.S. Immigration and Customs Enforcement (USCIS) statistics for the 2010 fiscal year, E-Verify handled 15,640,167 cases, of which 98.3% resulted in confirmed work authorizations either instantly or within 24 hours. Another 0.3% of the total number of cases resulted in confirmed work authorization after a TNC process. Only 1.4% of all E-Verify cases resulted in final determinations that individuals were not authorized to work.
Balance the high confirmation rate of E-Verify against the risk of failure to verify. Enforcement against employers who hire unauthorized workers is real, at least at the federal level. DHS Secretary Napolitano told Congress in October 2011 that, in the two fiscal years just concluded, USCIS had audited more than 6,000 companies, issued more than $76 million in penalties and barred more than 400 companies from federal contracting.
The states may not be so willing to put the effort into enforcement. In 2010, the Arizona Republic reviewed implementation of Arizona's harsh E-Verify law. It found that only a third of the state's employers were using E-Verify and just half of the new hires in the state had been confirmed through the system. Not one business had actually lost its license. On the other hand, the risk of being targeted by private parties with the potential ability to damage a company's reputation also exists. The website found here declares that its mission in Arizona "is to embarrass and intimidate non-E-Verify compliant businesses, bring them to the attention of law enforcement, and to make them targets of anti-illegal immigration activists in such a way as to pressure them to comply."
Until a biometric authentication method is adopted, E-Verify is likely here to stay, and sure to become more pervasive. Although it doesn't guarantee an employer can avoid hiring unauthorized workers (identity theft is one means to get around it), E-Verify does strengthen the defenses of a company that uses it to vet new employees. So long as a company is of sufficient size that devoting HR time to the process involves no significant increase in costs, E-Verify is that rare regulatory process that might actually be a net positive.
