February 14, 2017 12:59PM

Sen. Grassley’s Proposed E‐​Verify Mandate Is an Expensive Dud

Senator Chuck Grassley (R-IA) recently introduced S. 179, known as the Accountability Through Electronic Verification Act (ATEVA), to mandate E‐​Verify in the United States. The bill would mandate E‐​Verify for all employers in the United States while also mandating civil penalties for non‐​compliance of $1000 to $25,000 per violation. ATEVA also includes criminal penalties of $15,000 per illegal immigrant hired and/​or a 1 to 10‐​year prison sentence for repeat violators. The bill also includes a good faith clause to prevent punishment of the businessman in case E‐​Verify makes an error.

If ATEVA were to become law, the mandatory E‐​Verify portion would go into effect one year after the President’s signature. Most worrying though is that ATEVA would require all employers to verify their existing employees no later than 3 years from the date of enactment. The identity of unlawful immigrants who are granted final non‐​confirmations would then be transferred to Immigration and Customs Enforcement (ICE) for removal. Of course, ICE would have to locate the person but that is still a worrying increase in enforcement coordination.

ATEVA does not resolve the real and persistent problems with E‐​Verify. 

The first big problem is that E‐​Verify is expensive. Oftentimes it is labeled a “free online system” but nothing supplied by the government is free to the taxpayers who pay for it. E‐​Verify is also not free because of the opportunity cost of employers and workers who use the system. The current I-9 form costs employers about 13.48 million man‐​hours each year to process. ATEVA would add to that even if the I-9 is eventually replaced by E‐​Verify. Those are a lot of hours that employers could otherwise spend on growing their businesses but instead must waste complying with government rules.

About 46.5 percent of contested E‐​Verify cases in 2012 took DHS eight work days or more to resolve. During that time, employers are justifiably reluctant to train new employees who might not be work authorized. Employers will likely avoid that cost by pre‐​screening job applicants to exclude those who come back as tentative non‐​confirmations. Workers could thus get rejected from every job they apply for but not know that a simple and correctable error in the E‐​Verify database is the reason. ATEVA makes prescreening illegal except with the expressed permission of the employee but we shouldn’t expect that to prevent unlawful prescreening by employers who don’t mind breaking labor market regulations in the first place.

The second problem is that E‐​Verify is ineffective at detecting illegal immigrant workers and the system’s accuracy rates are notoriously difficult to judge. An audit of the system by the firm Westat found that an estimated 54 percent of unauthorized workers were incorrectly found to be work authorized by E‐​Verify because of rampant document fraud. E‐​Verify relies upon the documents presented by the workers themselves. Frequently, identity information comes from deceased Americans – a loophole the government seems incapable of closing. For instance, SSNs for roughly 6.5 million Americans who are 112 years old or older do not have a death date attached which means they can easily be used by illegal workers and nobody would complain. An illegal worker using the SSN of a deceased American would likely end up work authorized.

Employer avoidance of E-Verify’s is even more difficult to fix. Many employers ignore E‐​Verify even when it’s mandated, just like they ignore other government immigration enforcement rules. Alabama, Arizona, Mississippi, and South Carolina all mandate usage at the state level, yet usage and enforcement have been lax. In 2014, only 56 percent of employers in Alabama, 57 percent in Arizona, 43 percent in Mississippi, and 54 percent in South Carolina used E‐​Verify for new hires despite their state laws mandating that 100 percent of employers must use the system. ATEVA tries to solve this problem by placing high civil and criminal penalties on employers who break the rules. Violating I-9 rules currently opens up employers to serious criminal and civil penalties but that hasn’t incentivized many to comply even in states where E‐​Verify is mandated. It’s also hard to believe that the government will fine to death many small businesses for failing to use E‐​Verify properly. 

The third problem is that some Americans would be kicked out of the labor market due to E‐​Verify. E-Verify’s inaccuracy rate means that Americans will be barred from work due to false positives. Roughly 0.15 percent of all E‐​Verify queries currently result in a false “final non‐​confirmation.” While that is an admittedly small percentage, if applied nationwide to an American labor pool of roughly 125 million workers, it would result in 187,500 wrongly issued FNCs to American workers each year.

The fourth problem is that E‐​Verify is supposed to help curb illegal immigration by turning off the jobs magnet. In the real world, E‐​Verify barely altered the wages of suspected illegal immigrants. In Arizona, the E‐​Verify mandate lowered the expected wage gain of immigrants from Mexico from 253 percent to 241 percent – hardly diminishing the strength of the wage magnet. That small effect could even overstate E-Verify’s effectiveness because it includes a period of time before employers and employees learned how to circumvent the system. A national mandate in the near future would confront many millions of employers and illegal immigrants who now know how to get around the system thanks to their experience Arizona and other states.

The fifth problem is that ATEVA will incentivize identity theft. A huge cottage industry of forged identity documents sprung up after the government first mandated that employers check the identification of new hires in 1986 through the I-9 form. Just as IRCA gave a big boost to the black market 31 years ago, nationally mandated E‐​Verify would subsidize it even further regardless of the anti‐​identity theft provisions in ATEVA. 

The sixth big problem will be the reaction to mandatory E‐​Verify. The system’s errors and loopholes mean that it will be quickly rendered useless as an employment verification system – which is the most positive thing I’ll say about E‐​Verify. Congress will not react to E-Verify’s failure by throwing up it hands and calling it a day. Congress would instead integrate other biometric information like fingerprints or perhaps even DNA into a national identity system to close the E‐​Verify “loopholes” to make the system more effective. Such a beefed up E‐​Verify system could easily be used for other purposes like creating a national gun registry. It is unwise to mandate participation in a new government identity tool that will expand in the future, especially in an era of serious privacy scandals. 

ATEVA is another in a long line of bills introduced to mandate E‐​Verify in an attempt to force employers to help enforce federal immigration law. The government should enforce its own laws rather than conscripting employers. If the government cannot enforce its own laws then that is a signal that its laws should change. Americans should not have to ask government permission to work from a federal government database. If ATEVA were to ever become law, it would be an expensive new scheme that would fail to help enforce our immigration laws and likely lead to more invasive forms of national identification.

Special thanks to Scott Platton for his help in writing this.