E-Verify is the federal government’s employment eligibility verification system. In 1986, Congress forced all employers and employees to complete the Form I-9, attesting to the employee’s authorization to work. In the decade that followed, it became clear that this requirement had no effect on illegal employment, so in 1996, Congress created E-Verify as a pilot program to provide employers an electronic way to verify the authenticity of the information provided by their hires.

How E-Verify Operates

E-Verify compares an employee’s I-9 information to information in Social Security Administration (SSA) or Department of Homeland Security (DHS) databases. Employers are not required to use E-Verify, but those who voluntarily participate must follow these steps:

• Fill out the Form I-9 within 3 business days;
• Review a photo ID with a name matching the name provided on the Form I-9;
• Enter the employee’s name, date of birth, Social Security Number, and—if a noncitizen—alien identification number into E-Verify’s website within 3 business days;
• If the information fails to match the information at SSA or DHS:
  • The employee will receive a Tentative Non-Confirmation (TNC);
  • The employee has 8 business days to challenge the TNC by going to a DHS or SSA office.
  • If the employee fails to challenge or is not confirmed after a challenge, the employee and employer will each receive Final Non-Confirmation (FNC) notices.

If an employee receives an FNC, the employer must immediately terminate their employment.

Use of E-Verify

Until 2008, virtually no U.S. employers had enrolled in E-Verify. That year, President Bush issued an executive order requiring all federal contractors to use E-Verify, and the same year, Arizona became the first state to mandate that all employers use the program. In 2008 and every year after that, the share of employers using E-Verify has grown approximately 1 percentage point. In 2018, DHS had enrolled 821,771 employers in E-Verify—amounting to 13.5 percent of all employers in the United States (Figure 1). This means that 86.5 percent of U.S. employers refused to use E-Verify in 2018.

As of 2014, E-Verify employers were skewed toward the larger side relative to their share of total employers. As Figure 2 shows, less than 13 percent of E-Verify users had less than 10 employees, while 61 percent of all employers did. Almost 40 percent of E-Verify users had more than 100 employees, while just 21 percent of all employers did. It is likely that larger employers need to use E-Verify to contract with the federal government or do businesses in multiple states, some of which mandate E-Verify.

The number of hires run through E-Verify also increased from 2005 to 2018but at a faster pace. From 2005 to 2018, the number of E-Verify queries increased from less than a million to more than 36 million (Figure 3). The largest jump occurred in 2010 following the 2009 implementation of the federal contractor regulation. The number of queries as a share of total hires increased from 1 percent to 37 percent from 2005 to 2018. In other words, at least 63 percent of hires were not run through E-Verify (some hires could be subject to multiple queries).

E-Verify Outcomes

The number of hires denied employment has increased over time as well, but not nearly as fast as the number of new queries. From 2007 to 2018, the number of rejected new employees doubled from 173,409 to 351,836, but the number of FNCs as a share of total queries plummeted from 5.3 percent of queries to 1 percent (Figure 4). For context, unauthorized immigrants were 5.4 percent of the labor force in 2007 and 4.8 percent in 2016, according to the Pew Research Center. Altogether, since 2007, E-Verify has rejected just over 3 million hires.

During this time, many legal workers had their jobs blocked by E-Verify, either temporarily or permanently. Errors occur both when an employer enters the information or when a government employee at SSA or DHS incorrectly creates a legal worker’s record. Erroneous TNCs are identified after the employee challenges the error and vindicates their right to work. Since 2005, 568,283 legal employees have received a TNC and successfully challenged it (Figure 5). In 2018, some 58,362 workers proved their right to work. Nearly 36 percent of those challenges took more than 8 days to resolve, though the government failed to disclose the length beyond that.

Employees can also receive erroneous final non-confirmations (FNCs) because employers toss their applications without telling them, because they fail to get to the SSA office within 8 business days, or because they cannot disprove the database error. This number has only been estimated once by an independent statistics company, Westat, hired by the Department of Homeland Security. For purposes of estimating other years, Figure 4 assumes that the FNC error rate improved as much as the TNC error rate. Overall, about 0.2 percent of hires received errors in 2018—amounting to nearly 70,000 employees.

State Mandates for E-Verify

Starting with Arizona in 2008, 20 states have passed laws mandating E-Verify for state agencies or state contractors. Eight states—Arizona (2008), Alabama (2011), Mississippi (2008), South Carolina (2011), North Carolina (2011, 25+ employees), Georgia (2013, 10+ employees), Utah (2010, +15 employees), and Tennessee (2011, 6+ employees)—require E-Verify for all or most new hires (Figure 6).

Despite these mandates, however, a very significant number of hires in these states go unchecked through the E-Verify system based on Census data. As of 2017, the most compliant state was Alabama (Figure 7) with at most over 60 percent of new hires run through the system (again, queries and hires don’t quite match up because queries can be done multiple times on a single employee). The share in Mississippi has not risen above 50 percent except for a single quarter. This is despite the fact that Arizona promises a business “death penalty” for those who repeatedly fail to comply, and South Carolina regularly fines employers for missed checks (not necessarily for hiring illegal immigrants).

Wages for illegal immigrants in Arizona—which has had the mandate the longest—declined 8 percent for men and 1 percent for women, according to one study by Dallas Federal Reserve economists. The problem for advocates of E-Verify is that this amounts to a very small change in the expected wage gain for illegal immigrants coming to the United States. Indeed, they would receive a 253 percent wage boost by moving to America before the E-Verify mandate and a 240 percent wage gain after it (Figure 8). The study also found that due to the lower wages, immigrants worked more to make up for it, and more illegal immigrant women entered the labor force. In other words, illegal immigrants continued to work, but for lower wages.

Nationwide, the surge of E-Verify queries has not coincided with any significant reduction in the number of illegal workers. From 2007 to 2016, the number of illegal workers hovered around 8 million, even as the number of E-Verify queries increased tenfold (Figure 9). The only independent audit of the E-Verify system in 2012 concluded that half of all illegal workers run through the system evaded detection, primarily by borrowing the identification of legal workers.

Conclusion

E-Verify has become one of the largest government surveillance programs in the United States. It checks the identification numbers of tens of millions of legal workers per year, and hundreds of thousands of disproportionately larger businesses use the program. Despite this success, most businesses refuse to adopt the program, and most employees are not checked against the system. Only four states have adopted E-Verify mandates covering all private employers, and even these states cannot manage to enforce their mandates. Through erroneous non-confirmations, E-Verify has harmed nearly three quarters of a million legal workers and has not stopped illegal employment.