E-Verify System to Check Employment Eligibility – Good? Bad? Mandatory?

Authored by Steve Holden. Published in the Sacramento Business Journal May 2012.

While the issue of illegal immigration pops in and out of the daily news, most of us know that the issue is nowhere near resolved and is not going away any time soon.  It is a thorny issue that politicians do not want to touch.  On the one hand, they say that the best way to control illegal immigration is to prohibit employers from hiring illegal workers.  On the other hand, they provide little protection for employers who try to weed out illegal workers.  The unfortunate result: Employers remain caught in the middle hoping for definitive and lasting solutions.

To date one of the best solutions for employers has been the federal E-Verify program.  E-Verify is an Internet-based system that compares information from an employee’s Employment Eligibility Verification Form (I-9), to data from U.S. Department of Homeland Security and Social Security Administration records to confirm employment eligibility. The government reports that more than 288,000 employers across the country use E-Verify to check the employment eligibility of their employees, with about 1,200 new businesses signing up each week.  While participation in E-Verify is voluntary for most businesses, some companies may be required to use the program if they have federal contracts or subcontracts that contain the Federal Acquisition Regulation E-Verify clause.

Employers wishing to use the system enter into a Memorandum of Understanding (contract) with government which sets the terms of use.  There are multiple ways to participate, and detailed rules of access for each.  Enrollment can be accomplished on-line at https://e-verify.uscis.gov/enroll.  Employers should be aware that the use of E-Verify does not replace the obligation to properly complete the I-9 form.

E-Verify may not be a good choice for all employers. While a steady increase in the number of employers participating in the E-Verify program is undeniable, it is unclear whether the increase is the result of employer choice or state laws that mandate or encourage the use.  Prior to enrolling in E-Verify, employers should conduct an audit of its I-9 information and current verification and hiring practices.  Employers will also want to consider the states in which they conduct business, any past issues or government audits, and then weigh the pros and cons of E-Verify with counsel.

The Cons:

  • The E-Verify is not perfectly accurate, resulting in mismatch problems.  There is a risk of false non-confirmations (called TNCs) that expose an employer to legal action.
  • Employers must make the commitment of administrative burdens associated with the program which include training and timely management of the verifications and subsequent actions.
  • Improper use of the E-Verify program for pre-employment screening or to re-verify current employees exposes employers to liability.
  • Uncertainty regarding the technical capacity of E-Verify to handle a heavy load and the ability of the SSA to quickly resolve numerous confirmation issues.
  • Participating employers expressly allow the SSA and DHS to perform periodic audits.

The Pros:

  • The program quickly verifies employment eligibility and almost eliminates Social Security mismatch letters.
  • Employers utilizing E-Verify may presume that they did not knowingly hire an unauthorized worker, providing added insulation from liability.
  • Employers in some states may be able to pursue certain types of business via state or local government contracts that they would not otherwise be eligible to obtain.
  • Proper use of the program protects jobs for authorized workers.

Despite the positive aspects of the program, some employers may choose to hold off signing up given the uncertain future of E-Verify.  The E-Verify program was established by Illegal Immigration Reform and Immigrant Responsibility Act of 1996.  California was one of the pilot states to test the program beginning in 1997.  Since 2003, the program has been available in all 50 states.  But, the program remains controversial.  A number of states now require employers to use the program, and the Supreme Court has ruled that such mandates are permissible.  California is one of only two states that go the other direction—limiting the use of E-Verify.  In October of last year the state passed a law prohibiting state agencies and local governments from mandating the use of E-Verify unless required by federal law or necessary to receive federal funds.  Private employers in California may still use E-Verify.

Congress continues to play hot potato with the E-Verify program.  It has been extended periodically by Congress, but never made permanent.  As a result, the program will cease to be funded on September 30, 2012 unless Congress takes further action.  Bills in both the House of Representatives (HR 2885) and Senate (S 1196) were introduced last year to make E-Verify a permanent and mandatory verification system for all employers.  It is unclear, however, whether either will pass.  It is even less clear what they will look like in final form and what impact they will have on the E-Verify program and employers’ hiring practices..