Tag: E-Verify

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.

Nationwide E-Verify an Unwelcome Step Towards a National ID

Senate Judiciary Committee Chairman Chuck Grassley recently reintroduced an E-Verify bill that ought to concern privacy advocates. If enacted, the bill would implement the employment verification scheme nationwide, something President Trump called for during his campaign. Nationwide E-Verify would establish the framework for a national ID system that would undoubtedly come to be used for more than the enforcement of immigration laws.

E-Verify allows employers to check a new hire’s information against government databases to confirm legal status. It is an ineffective system. One reason why E-Verify suffers from inefficiency is because, as things stand, employers taking part in E-Verify use information from documents such as Social Security cards provided by employees. Because the E-Verify system matches employees’ names with a Social Security Number (SSN) it’s possible for an unauthorized worker using a fraudulent SSN to be cleared for employment. A 2009 audit commissioned by the United States Citizenship and Immigration Services estimated that 54 percent of unauthorized workers who submitted documents via E-Verify were erroneously cleared for employment thanks to fraud.

An effective E-Verify system would have to address this glaring loophole. One way of addressing E-Verify’s inadequacy is to include biometric information, such as a facial photograph. Such proposals are worrying.

The E-Verify system currently checks submitted data against Department of Homeland Security (DHS) and Social Security Administration databases. Section 11 of Grassley’s bill would allow the E-Verify system to include the “passport and visa record (including photographs) maintained by the Department of State” as well as driver’s license photos. Seven states voluntarily provide DHS with driver’s license data as part of the Records and Information from DMVs for E-Verify (RIDE) initiative. 

That Grassley’s bill explicitly mentions driver’s license photos is important. Allowing the DHS secretary to deem it necessary for the E-Verify system to confirm identity via driver’s license photos introduces biometric information that proponents believe will make the system more effective.

If the statute purports to require that 43 states provide DMV information that raises constitutional concerns, but as the recent debates surrounding REAL-ID show, the federal government could try to coerce states into compliance. DHS announced last month that residents in nine states will need an identifying document other than a state driver’s license to fly if their licenses are not REAL-ID compliant by January 22, 2018.

Even if the federal government fails to force states to submit DMV data under a nationwide E-Verify scheme, there is still the possibility of nationwide E-Verify leading to a de facto biometric national ID card.

E-Verify Gaining Ground in Texas

Texas State Senator Charles Schwertner (R-Georgetown) recently filed SB 23, a bill that would put into statute Governor Rick Perry’s executive order mandating E-Verify for all state contractors and force all state contracts to include a paragraph specifying that they must participate in the program. There’s a good faith exemption, in case the contractor receives inaccurate information from the E-Verify system (false confirmations that later come to light). SB 23 adds an enforcement mechanism that Governor Perry’s executive order lacked. Under the proposed law, a contractor’s failure to use E-Verify would bar them from receiving state contracts for five years and make the state comptroller responsible for enforcement. The legislature already mandated E-Verify for state agencies and universities.  

SB 23 won’t much affect Texas because it probably won’t be enforced. Nebraska mandates E-Verify for all public contractors, but a 2011 Nebraska report found that only 23 percent of registered state contractors were even enrolled in the system. If Texas is as uninterested in enforcing E-Verify as Nebraska, then the results will be similar.    

The real damage from SB 23 is that it brings Texas one step close to universally mandated E-Verify and all of its systematic problems. E-Verify is a government run system that is free for the user if you exclude the taxes, time, and money spent on maintaining it, using it, and resolving any identification problems that arise. E-Verify also doesn’t work well, as accuracy rates are poor, there are many ways for illegal workers to obtain SSNs from deceased Americans to fool the system, and many employers in states where the system is mandated don’t bother to use it at all. Furthermore, E-Verify doesn’t dim the job magnetE-Verify is an expensive system that doesn’t work.

SB 23 is a stepping stone toward universal mandated E-Verify in Texas and all of the problems it creates. For that reason alone, SB 23 is a rotten deal for Texans. 

Special thanks to Scott Platton for his help in researching this blog post.

Serious Problems with E-Verify

A recent piece by Mark Krikorian, executive director of the Center for Immigration Studies (CIS), argued for mandatory E-Verify as “an important enforcement tool” and metaphorical “wall” that would prevent the hiring of illegal immigrants.  Krikorian did not mention many of the problems with E-Verify so I will do that here after a brief description of the system.

The 1986 Immigration Reform and Control Act (IRCA) created the rudimentary employment verification known as the I-9 form that every new employee must fill out.  An E-Verify mandate would add another lay on top of the I-9 whereby employers, after collecting I-9 those forms, would enter the information on the form into a government website.  The system compares these data with information held in the Social Security Administration (SSA) and Department of Homeland Security (DHS) databases.  The employee is work authorized if the databases decide that the data are valid.  A flag raised by either database returns a “tentative non-confirmation,” requiring the employee and employer to sort out whatever error has been flagged.  If the employee and employer cannot sort out the errors then the employer must terminate the new employee through a “final non-confirmation.” 

First, Krikorian erroneously labels E-Verify as a “free online system.”  E-Verify is not a gift from heaven, it was created by the federal government and funded by taxpayers.  E-Verify is also not free because of the opportunity cost of the using the system.  The current I-9 form costs employers an estimated 13.48 million man-hours each year.  A national E-Verify mandate would add to that – perhaps substantially.  Those are a lot of hours that employers could otherwise spend on growing their businesses but instead must waste complying with government rules. 

Most E-Verify checks do not take much time but 46.5 percent of contested 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 and rejecting those who come back as tentative non-confirmations.  Workers could thus get rejected from every job they apply for but not know a simple and correctable error in the E-Verify database is the reason.  Although pre-screening employees would be illegal under a national E-Verify mandate, we shouldn’t expect it to work because the entire point of the system is to stop illegal behavior by employers in the first place.

Second, E-Verify is ineffective at detecting illegal immigrant workers. On top of that, E-Verify’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 to their employer.  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.

E-Verify: Responding to the Critics

Our recent policy analysis criticizing E-Verify drew a response from NumbersUSA that we did not notice until recently. Most of the NumbersUSA piece is about how well E-Verify polls, which has nothing to do with the system’s failures or how it will harm Americans. NumbersUSA does take an issue with the data set we used for showing that E-Verify is largely ineffective at identifying unauthorized immigrants. As the piece reads:

According to Nowrasteh and Harper, the “the most damning indictment of E-Verify as a tool to force unlawful immigrants out of the labor market” is it’s [sic] susceptibility for identity theft. The authors write that “E-Verify cannot tell the employer, for instance, that the SSN handed to him by a Hispanic job applicant in 2015 in Texas actually belongs to an 11-year old girl who died in Minnesota decades ago.” To be sure, E-Verify was not created to catch identity thieves. And the authors report that “an estimated 54 percent of unauthorized workers submitted to E-Verify were incorrectly found to be work authorized because of rampant document fraud.” That was the finding of a 2009 report that studied statistics from April to June of 2008. The authors present it as if it was a recent discovery applicable to 2015.

The 2009 dataset is older but more reliable and detailed than more recent sets. Also, the NumbersUSA critic acknowledges in his next paragraph that  identity-theft still plagues E-Verify in 2015.  He blasts the Social Security Administration (SSA) for “failing to crack down” on identity thieves and demands further integration with the DHS.

We are glad that NumbersUSA at least shares our concerns over E-Verify’s problematic identity theft issues. However, the problem with E-Verify is economic and won’t be solved by sharing data with DHS. Our immigration laws try to separate willing workers from willing employers where large mutual gains exist. E-Verify is just one of the latest tools to attempt that. Spending more taxpayer dollars to keep these workers and employers apart with ever fancier gadgets like E-Verify won’t work. Liberalizing the law to allow more lawful immigration will. 

Thanks to Scott Platton for his excellent research assistance.

E-Verify’s Standing in the States

The Arizona Republic and the Associated Press (AP) used Cato’s recent work to highlight the failure of E-Verify to turn off the jobs magnet that attracts unauthorized immigrants to the United States. Arizona has a shaky record on immigration enforcement, despite its laws and reputation to the contrary. Maricopa County Attorney’s Office has had zero E-Verify related cases since 2010 and the state Attorney General’s office has failed to update a list of E-Verify compliant businesses since at least 2012 – a requirement under state law.

Other states’ recent experiences also point to problems with E-Verify.

In Ohio, an unauthorized worker at a dairy company was charged on October 20th with identity fraud, after having been discovered to be using the Social Security number of a (legal) Arizona resident.  The fraud only came to light after the Arizonan discovered that his Social Security number was being used in Ohio. The fraud was not discovered by the routine E-Verify check that the unauthorized Ohio worker underwent in 2013. E-Verify confirmed the worker, who was utilizing the stolen SSN and fraudulently obtained documents based off of said number, as work-authorized and legal. The use of a valid number and fraudulent (but on the surface valid) documents by migrants is a problem with E-Verify that we’ve highlighted in the past.

California passed legislation to prevent employer misuse of E-Verify. Their law effectively duplicates federal restrictions on re-verification of employees, bars selective verification (targeting certain applicants over others), punishes use of E-Verify as an interview screening tool, and imposes a $10,000 fine for misuse. The intent of the new law is positive but it will be impossible to enforce. 

Finally, a controversial immigration bill has become law in North Carolina (I wrote about this in May). The new law lowers the threshold for mandated E-Verify to businesses with five or more employees, limits the types of identification that migrants can present (effectively banning use of Mexican consular identification cards), and prevents local and county governments from adopting so-called “sanctuary city” policies.

E-Verify imposes an economic cost on American workers and employers, does little to halt unlawful immigration because it fails to turn off the “jobs magnet,” and is an expansionary threat to American liberties.  During the housing collapse and Great Recession, Arizona enacted the Legal Arizona Workers Act (LAWA), which mandated E-Verify for all new hires in the states.  In its early days, E-Verify had a reputation of effectiveness that, combined with the crashing economy, resulted in a large exodus of unlawful immigrants from Arizona.  After the economic recovery and E-Verify’s flaws were made clear, subsequent states like Alabama, Mississippi, and South Carolina have had far less success in using E-Verify to decrease the numbers of unauthorized immigrants in their states.  E-Verify’s bark was worse than its bite.   

This post was written with the help of Scott Platton

Employers Ignore E-Verify

Alabama, Arizona, Mississippi, and South Carolina have mandated E-Verify for all new hires in their state (see Table 1), which means that every time an employee is hired the employer must use the E-Verify system to check the worker’s ability to legally work.  In our recent Cato Institute policy analysis, Jim Harper and I document that employers are not using E-Verify despite the mandates in those states.  Washington Examiner reporter Sean Higgins wrote an excellent piece expanding on our findings.

Table 1 

E-Verify Mandate Dates

   

Alabama

Arizona

Mississippi

South Carolina

4/1/2012

1/1/2008

7/1/2011

7/1/2010

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