E-Verify & I-9 News

The U.S. Chamber of Commerce and other business, community-based, and civil rights organizations have filed a petition with the U.S. Supreme Court requesting a review of the Arizona E-Verify law, which requires all employers in the state to participate in E-Verify and imposes sanctions on employers who hire unauthorized workers. The petition (Chamber of Commerce, et al. v. Candelaria, et al.) argues that the Arizona statute is preempted by federal law and undermines the “comprehensive scheme” that Congress created to regulate the employment of foreign workers.

By way of background, the Legal Arizona Workers Act was enacted in 2007 and signed by then-Governor Janet Napolitano in one of the first instances of state immigration regulation. As mentioned above, the Act prohibits the hiring of unauthorized workers and imposes sanctions on offending employers, including the revocation or suspension of the company’s license. In addition, the Act makes E-Verify mandatory for all Arizona employers and specifies that employers failing to participate may be denied economic development benefits and be forced to repay any benefits previously obtained from the state.

Shortly after the Act was passed, several groups challenged it as being preempted by federal law. The U.S. district court disagreed, holding that the Act constitutes a “licensing or similar law” and that its provisions are not expressly preempted. Last year, the U.S. Court of Appeals for the Ninth Circuit affirmed that decision.

The US Chamber and other plaintiffs argue that this case involves a question of “exceptional national importance: whether state legislatures and municipal governments may override Congress’s judgment concerning United States immigration policy.” They argue that the Arizona law is not an isolated case, as state legislatures and governments across the country have been seeking to regulate the employment of foreign workers through a “cacophony” of state immigration laws. This is certainly supported by the facts – which show that in the first 3 months of 2009 alone, over 1,000 immigration-related bills and resolutions have been introduced.

According to a recent article in the Beaufort Gazette, many employers in South Carolina are struggling to comply with the South Carolina Illegal Immigration Reform Act, finding the requirements both time-consuming and costly. Under the current law, all South Carolina employers with 100 employees or more must either participate in E-Verify or only hire employees who possess or qualify for a South Carolina driver’s license (or other state license with similarly strict requirements). The law will expand to include all employers in July 2010.

The Costs: A restaurant owner estimates he’ll need an office worker to devote three hours per week overseeing the E-Verify issue, which could cost him $5,000 to $6,000 per year. He recently spent $500 training a new employee on the law, only to see that person leave.

The Confusion: state law and federal guidelines don’t always mix well. In this case, the state law says that employers can either use E-Verify OR demand that new hires possess a South Carolina (or similarly strict) driver’s license. The problem is that many employers think they can go back and forth between these methods, whereas the E-Verify MOU dictates that once you start using E-Verify at a particular site, you must use it for all new hires at that site. There are also differing time deadlines: the state law gives employers 5 days, whereas E-Verify requires verification to be initiated within 3 days.

The Consequences: according to the article, state auditors have been visiting employers in South Carolina unannounced and asking for documents that are not covered under the law. This practice is compounded by certain local ordinances which allow county officials to conduct random I-9 audits and impose significant penalties including the loss of an employer’s business license.

Yesterday, Rep. Heath Shuler (D-NC) re-introduced the Secure America Through Verification and Enforcement (SAVE) Act which would tighten America’s borders and require all employers to use E-Verify. Rep. Shuler introduced a similar SAVE act in last year’s Congress, which attracted a significant number of co-sponsors in the House.

The bill summary and status record from the online Library of Congress (Thomas) site is reproduced below.

H.R.3308
Title: To provide immigration reform by securing America’s borders, clarifying and enforcing existing laws, and enabling a practical employer verification program.
Sponsor: Rep Shuler, Heath [NC-11] (introduced 7/23/2009) Cosponsors (75)
Latest Major Action: 7/23/2009 Referred to House committee. Status: Referred to the Committee on Homeland Security, and in addition to the Committees on the Judiciary, Ways and Means, Education and Labor, Oversight and Government Reform, Armed Services, Agriculture, and Natural Resources, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned. 

Today, the U.S. Chamber of Commerce testified before a House Subcommittee on “E-Verify Challenges and Opportunities.” Speaking for the Chamber, Mr. Angelo Amador voiced concerns of the business community at a potential expansion of the E-Verify program while laying out his recommendations for a fair, efficient and workable system. Throughout his testimony, Mr. Amador indicated that most businesses would support E-Verify or some other employment eligibility verification (EEV) system as long as it addresses the concerns of both large and small businesses. In particular, he advocated the following principals for a comprehensive solution:

• An E-Verify mandate should be implemented in a fair and reasonable roll out (or tiered approach). Mr. Amador also urged the committee to consider exempting businesses with less than 50 employees for whom the burdens of a new system may be too great.
• Contractors should not be liable for subcontractor actions unless the contractor knows the sub is hiring undocumented workers or otherwise violating the law.
• E-Verify should only be mandatory for new hires and employers should be able to reverify existing employees on a purely voluntary basis. Mr. Amador noted that Chamber members large and small had been reporting a TNC rate closer to 15%, which would make reverifications costly and burdensome. Instead, he recommended that employers only be required to reverify if DHS obtains a mismatch from W-2 data.
• There should be only one federal E-Verify law which preempts all state and local actions.
• Enforcement provisions must be fair and businesses must be given an opportunity to rectify minor paperwork violations.
• DHS should have primary authority to enforce E-Verify, and trial attorneys should not be able to use the federal RICO statute to enforce immigration law.
• Penalties for noncompliance should be proportionate to the offense and comparable to other penalties in the employment law arena. Enforcement agencies should have more discretion to mitigate penalties. DHS should not have authority to automatically debar employers from federal contracts. Anti-discrimination penalties should not be expanded in light of the “catch-22” position that many employers face.
• Documents should be retooled in the long run (with biometrics) and the number of acceptable documents should be limited to reduce identity theft issues and employer confusion.
• E-Verify checks should be started earlier and finalized sooner (maximum of 30 days from date of initial inquiry)
• The government should be held accountable for E-Verify mistakes through an administrative and judicial review process. Employers and employees should be able to contest findings and seek lost wages and/or attorneys’ fees and costs.
• E-Verify should not have an overly burdensome document retention requirement.
• An expansion of E-Verify should not serve as a back door to expand employment laws.

The entire statement is available in PDF here.

On Tuesday, the Senate Judiciary Committee held a hearing on E-Verify and the future of employment eligibility verification. Sen. Schumer, the chairman of the Senate Judiciary subcommittee on immigration, set the stage with his opening remarks by declaring that improving employment verification is a necessary component of broad immigration reform. Most in attendance agreed that the current system (using the paper I-9 and optional E-Verify) has flaws in that it cannot detect identity fraud, requires overly subjective evaluation by employers, and is ultimately error-prone. As can be imagined, there were differing views on the best way to resolve this dilemma.

Sen Schumer outlined 10 characteristics of his proposed system, which would include the use of non-forgeable biometric identifiers (such as fingerprints, iris scans, etc). Congressman Gutierrez also supported an entirely biometric system, arguing that it would reduce fraud, prevent pre-screening, and empower individuals to correct errors more easily.

James Ziglar, former commissioner for INS, also advocated the use of biometrics (while simultaneously disclosing his equity position in a biometrics company). Mr. Ziglar was not as harsh in his critique of E-Verify, going so far as to suggest that a biometric component could be added-on so that we don’t have to scrap the whole E-Verify system. He recognized though that the cost of a biometric system (either brand new or in E-Verify) would be significant.

Lynden Melmed, former Chief Counsel for USCIS, emphasized the need for a prompt, accurate and reliable system which eliminates subjective decision-making by employers, simplifies the rules, and fairly distributes the costs of such a system so that employers are not overly burdened. Mr. Melmed testified that this could be possible either through an improved E-Verify system (with biometrics) or a similar program that achieves the same end.

Michael Aytes, Acting Deputy Director of the USCIS, was the lone voice with full support for the current E-Verify system. As in past testimony, Mr. Aytes highlighted the growing enrollment in E-Verify, enhancements in accuracy and reliability, and the USCIS commitment to further strengthen the system through outreach programs, increased monitoring and compliance, and mechanisms to safeguard employee privacy. Here are the latest E-Verify Usage stats and figures from Mr. Aytes as of July 18, 2009:

• Over 137,000 employers are enrolled, representing over 517,000 locations
• Employers have run over 6.4 million queries thus far in FY 2009
• 96.9 percent of all cases queried through E-Verify were automatically verified as work authorized (based on data from October through December 2008)
• 3.1 percent of queries resulted in a mismatch, or a Tentative Nonconfirmation (TNC)
• Of the 3.1 % TNCs, 0.3 percent are related to new hires who were issued a TNC and successfully contested the case. The remaining 2.8 % were found not work-authorized either because the employee was in fact not work-authorized, chose not to contest, did not follow the necessary procedures to successfully contest, or was unaware of the TNC or the opportunity to contest because the employer did not follow proper procedures.

According to the USCIS web page on E-Verify, the Verification Information System (VIS) is experiencing some technical difficulties which may prevent E-Verify users from completing the verification queries. According to the notice, they are currently working on correcting the issue.

In related news, the Verification Division has announced a Planned Outage for E-Verify on Sunday July 19, 2009 from 1:00 AM EDT to 7:00 AM EDT in order to conduct scheduled maintenance. The official notice is available here.

In a court filing today, the parties to the E-Verify Federal Contractor lawsuit agreed to reschedule the August 27, 2009 hearing to Friday, August 21, 2009. The other court deadlines mentioned in our earlier post remain the same.

In the midst of recent news regarding E-Verify, Social Security no-match letters, and increasing government audits, the Senate Judiciary Committee will hold a hearing on Tuesday, July 21st at 2:00 pm EST on the broader goal of improving our employment verification system.  The hearing will be webcast live online. You can visit this link on July 21st to launch the live video feed.

Here is the full announcement:

OFFICIAL HEARING NOTICE / WITNESS LIST:
July 14, 2009

NOTICE OF SUBCOMMITTEE HEARING

The Senate Committee on the Judiciary, Subcommittee on Immigration, Refugees and Border Security will hold a hearing entitled “Ensuring a Legal Workforce: What Changes Should be Made to Our Current Employment Verification System?” on Tuesday, July 21, 2009 at 2:00 p.m. in Room 226 of the Senate Dirksen Office Building.

Chairman Schumer will preside.

By order of the Chairman

Today, the United States District Court for the District of Maryland lifted the stay of the E-Verify Federal Contractor lawsuit and announced a briefing schedule for motions and hearings. As previously reported, the U.S. Chamber of Commerce and several other organizations filed a federal lawsuit in December last year, challenging the legality of President Bush’s Executive Order and the FAR (Federal Acquisition Council) regulations requiring federal contractors and sub-contractors to use E-Verify. The lawsuit has been on hold (technical term is “stayed”) for almost six months in order to give the Obama Administration more time to review the rule.  In light of the Administration’s recent support of the rule, the Court is now resuming its case schedule as follows:

July 27, 2009: The Government must file their combined opposition to Plaintiffs’ motion for summary judgment and cross-motion for summary judgment;

August 3, 2009: Plaintiffs must file their combined opposition to the Government’s cross-motion for summary judgment and reply brief;

August 10, 2009: The Government must file its reply brief;

August 28, 2009: The Court will hold a hearing on any pending motions.

Aside from this legal challenge, the E-Verify Federal Contractor Rule could also be impacted by the DHS 2010 appropriations bill (H.R. 2892) which was passed by the Senate last week. An amendment inserted by Senator Sessions mandates that all federal agencies require contractors to use E-Verify as a condition of doing business with the government. Unlike the regulation, the appropriations bill does not include any exemptions or conditions ($100,000 value, COTS exemption, etc), so presumably it could apply to all contractors regardless of the contract size, type, or duration.

The bill now heads to a joint conference where leaders will attempt to reconcile differences between the House and Senate versions of the bill. If these E-Verify provisions remain, it’s possible that the E-Verify Federal Contractor Rule would need to be revised or revoked in favor of new regulations.

The Department of Homeland Security (DHS) announced today that the Obama Administration fully supports the E-Verify Federal Contractor Rule, which is currently slated to go into effect on September 8, 2009.  Up until now, the Administration had not formally expressed an opinion on the rule, while pushing back the effective date several times this year.

“After a careful review, the Administration will push ahead with full implementation of the rule, which will apply to federal solicitations and contract awards Government-wide starting on September 8, 2009.”

As part of today’s announcement, DHS also indicated that it will rescind its controversial Social Security No-match regulation which would have required employers to undertake a series of steps for employees whose names and Social Security numbers do not match.

In related news, the Senate voted on (and passed) an amendment today, offered by Senator Sessions, to the DHS 2010 appropriations bill which would permanently reauthorize E-Verify and codify the Federal Contractor rule. The Senate now has to approve the entire DHS appropriations bill and reconcile it with the House version (which had only a 2-year extension of E-Verify and no Federal Contractor provisions).