E-Verify and Immigration Reform

Assistant Director for Immigration Policy and Advocacy

November 6, 2014

Any comprehensive package of immigration reforms likely will mandate that employers use an electronic work authorization verification system (E-Verify) to authenticate the immigration status of their employees. While it began as a voluntary program that employers could use to check the legal status of prospective employees, more than 500,000 employers currently use E-Verify. At present, under federal law, all federal departments and agencies must require federal contractors to run all potential employees through E-Verify. Nineteen states also have passed laws that require at least some employers, if not all, to use E-Verify. Recent immigration reform bills in both the House and Senate have included a mandatory E-Verify component.

How E-Verify Works
To use E-Verify, employers enter a potential employee’s I-9 information (name, Social Security number, address and date of birth) into the system. E-Verify then checks the information against U.S. government databases to determine whether the potential employee is authorized to work in the United States. If the information on the I-9 form does not match the information on government databases, the employee receives a tentative nonconfirmation (TNC). He or she then has eight business days to contest the TNC with the government. If not contested, a TNC is converted into a final nonconfirmation (FNC) and the individual is flagged as not work-authorized. Employers then face the choice of terminating the employee or paying a $500 to $1,200 fine for each FNC worker they continue to employ if investigated by the federal government.

Mandatory E-Verify Should Be Only a Piece of Broad Immigration Reform
The National Immigration Forum is opposed to mandatory E-Verify absent broad immigration reform that addresses the status of the roughly 11 million undocumented individuals who currently live in the shadows. Unless accompanied by comprehensive immigration reform that, in addition to requiring E-Verify, addresses labor shortages in agricultural, service and other industries with high proportions of immigrant labor, we believe that mandatory E-Verify cannot succeed. If an electronic work authorization verification system is forced on the estimated 7.4 million American employers[1] without fixing underlying problems plaguing our broken immigration system, employers will face the choice of violating the law, suffering through dramatic labor shortages or outsourcing work to another country. The impact on millions of workers, thousands of businesses and the broader economy as a whole would be severe.

Implementing E-Verify in isolation would have the following consequences:

  • Employment would shift abroad or to underground economies. A significant percentage of our workforce is without legal status — 5.2 percent[2] overall, with substantially more in industries such as agriculture, in which an estimated 50 to 70 percent[3] are undocumented. Stakeholders from business and labor across many industries acknowledge that deficiencies in the legal immigration system encourage hiring undocumented workers. This problem needs to be addressed holistically, by revising immigrant and nonimmigrant visas and expanding the number of legal workers in industries with persistent labor shortages. Such changes would prevent companies in industries that are dependent on undocumented workers — agriculture, for example — from facing the choice of risking the consequences of noncompliance, suffering through dramatic labor shortages that risk shutting down operations, or moving operations to other countries.
  • American workers would lose jobs and consumer prices would rise. Whether employers move their workers off the books or to other countries, the effect on American workers and consumers is negative. Work moved offshore and underground labor have negative impacts on American workers, and increased compliance costs and labor shortages drive up prices and harm consumers. Further, labor shortages have ripple effects throughout the economy. For example, in agriculture, for each farm job eliminated due to E-Verify, three jobs would be lost in related support industries.[4] Additionally, were more agricultural production shifted to other countries, the U.S. would find itself dependent on more imported food, a prospect with significant ecological and national security effects.
  • Government would lose tax revenue. According to the Congressional Budget Office (CBO), the imposition of mandatory E-Verify on a standalone basis would drive significant numbers of employees off the books, which they estimate would cost the federal government more than $17 billion in tax revenues over a 10-year period.[5] In contrast, passing broad immigration reform would boost our economy and reduce our deficit. The CBO’s assessment of the Senate’s broad immigration reform bill, S. 744, showed that it would reduce the deficit by almost $900 billion over 20 years, increasing GDP by 3.3 percent in the first 10 years and 5.4 percent in 20 years.[6]

Even as Part of Immigration Reform, E-Verify Needs Safeguards
E-Verify is not without flaws. The most recent E-Verify accuracy reports show that 0.3 percent of people wrongly receive a tentative nonconfirmation.[7] While this percentage is relatively small and represents significant improvement since the program was introduced, more than 50,000 workers wrongly received a TNC in 2012 and were at least temporarily prevented from working.
Important safeguards include:

  • Create an efficient appeals procedure for FNCs. While U.S. Citizenship and Immigration Services has standardized the process for contesting TNCs, no set process exists for contesting FNCs. Because workers have only a limited time to contest a TNC and often receive unclear instructions on how to challenge a mistake, 6 percent of the workers who receive FNCs are actually work-authorized. These employees (and their employers) have done nothing wrong but lack recourse in these situations. Navigating an unclear process with little to no guidance, businesses incur fines from continuing to employ legally authorized workers while they resolve their FNC. Congress should not institute mandatory E-Verify without instituting a clear process to appeal FNCs.
  • Give employers sufficient time to implement the program. Because of the high costs of implementing E-Verify, the government should be certain to provide employers sufficient time to transition to using the system. Without it, mandatory E-Verify would be especially costly for small businesses that have to shift significant resources into employee verification, reducing revenues. Providing employers with sufficient time will reduce their initial costs of implementation, allow an orderly transition to the system and allow them to train employees on E-Verify procedures. According to the E-Verify accuracy reports, the percentage of accurate FNCs would rise from 94 percent to 99 percent if employers clearly explained the process to contest a TNC. Thus, giving employers time to transition to using the system would both reduce costs and prevent errors.

The Bottom Line
Standalone mandatory E-Verify would endanger American consumers, businesses and jobs by adding to the deficit and shrinking the U.S. economy. Therefore, the National Immigration Forum believes that the only sensible way to institute mandatory E-Verify is as part of a broad package of immigration reforms and with proper safeguards to ensure accurate results.

 

[1] U.S. Census Bureau, “2012 Business Patterns,” Geography Area Series: County Business Patterns, http://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=BP_2012_00A1&prodType=table (accessed September 8, 2014).

[2] Jeffrey S. Passel and D’Vera Cohn, Unauthorized Immigrant Population: National and State Trends, (Washington, DC: Pew Research Center, February 1, 2011).

[3] Illegal Immigrants Benefit the U.S. Economy, (The Hill, April 23, 2014) http://thehill.com/blogs/congress-blog/foreign-policy/203984-illegal-immigrants-benefit-the-us-economy.

[4] Dan Griswold, ICE Worksite Enforcement – Up to the Job?: Testimony Before the Subcommittee on Immigration Policy and Enforcement, Committee on the Judiciary, U.S. House of Representatives (Cato Institute, Jan. 26, 2011), www.cato.org/pub_display.php?pub_id=12730

[5] Congressional Budget Office, Letter to the Honorable John Conyers Jr. dated April 4, 2008, http://www.cbo.gov/sites/default/files/cbofiles/ftpdocs/91xx/doc9100/hr4088ltr.pdf

[6] Congressional Budget Office, The Economic Impact of S. 744, the Border Security, Economic Opportunity, and Immigration Modernization Act (Washington, DC: GPO, June 2013), http://www.cbo.gov/sites/default/files/cbofiles/attachments/44346-Immigration.pdf.

[7] U.S. Citizenship and Immigration Services, Summary of the Evaluation of the Accuracy of E-Verify Findings, http://www.uscis.gov/sites/default/files/USCIS/Verification/E-Verify/E-Verify_Native_Documents/Everify%20Studies/E-Verify%20Accuracy%20Report%20Summary.pdf (accessed September 23, 2014).