I-9 Compliance and E-Verify — Ready for Prime Time?

By Cynthia C. Arn

What is E-Verify?
Many employers, aware that they are required by the Department of Homeland Security (DHS) to verify that all of their employees are permitted to work in the U.S., would like more simplicity and certainty in the process. Many have heard of E-Verify and wonder if they can or should make use of the program. The purpose of this article is to explain how E-Verify works and to identify our concerns with the program as it currently exists.

E-Verify is a program administered by DHS, in conjunction with the Social Security Administration (SSA). The program enables employers to electronically verify employment authorization of newly hired workers through the SSA and DHS databases. Employers must still complete and maintain I-9 forms, as before, and cannot use E-Verify as a screening tool. E-Verify can be accessed only after the employee has been hired and completed an I-9. The program is free, but companies may need to develop software that works with the database.

DHS has made E-Verify the cornerstone of its employment verification program, and use of E-Verify is expanding. On November 13, 2008, USCIS announced that, as of January 15, 2009, federal contractors and subcontractors must use E-verify to verify work authorization (www.uscis.gov/files/article/FAR_13Nov08.pdf). A number of states (Arizona, Georgia, Colorado, Oklahoma and Missouri) have also enacted mandates requiring employers to use E-Verify. However, E-Verify remains a controversial program, and pending litigation has prevented any state from enforcing mandated use. Due to concerns about undue burdens on employers and risks to employees, other states (Illinois and California) either have or are considering legislation forbidding employers from using E-Verify.

How does E-Verify work?
To use E-Verify, the employer must register online and sign on to a nine-page “Memorandum of Understanding,” which sets forth rights and responsibilities of all parties under the program. The MOU can be found on-line at: www.uscis.gov/files/nativedocuments/MOU.pdf. Among other things, the employer must:
Post a notice informing employees of their use of E-Verify;
Use E-Verify for all new hires regardless of national origin or citizenship status. It may not be used selectively or for previously hired employees;
Use E-Verify only after hire and after completion of the Form I-9. Employers may not pre-screen applicants through E-Verify;
Promptly provide employees who receive an information mismatch from their Form I-9 and SSA and DHS databases with information about how to challenge the information mismatch;
Not take any adverse action against an employee because he/she contests the information mismatch. This includes firing, suspending, withholding pay or training, or otherwise infringing upon his/her employment;
Provide the employee with eight federal government work days to contact the appropriate federal agency to contest the information mismatch;
Terminate the employee if the mismatch cannot be corrected within the specified timeframe;
Notify the government if he continues to employ an individual after final non-confirmation; and
Agree to become familiar with and comply with the E-Verify Manual (approximately 150 pages).

Failure to report the continued employment of the employee can result in fines of between $550 and $1,100 for each such employee. In addition, if the employer is audited by DHS for their overall compliance with the I-9 program, continued employment of such an individual could result in a charge that the employer “knowingly” employed an unauthorized alien. This carries a fairly high fine, in addition to the fines listed above for failing to report the employee.

Should Employers Use E-Verify?
One organization that has filed a negative assessment of the use of E-Verify on a widespread or mandatory basis is the U.S. Chamber of Commerce. “The E-Verify system is not ready for prime time,” said Randel Johnson, the Chamber’s vice president of labor, immigration, and employee benefits. The sheer amount of data in the SSA and DHS databases (according to DHS, SSA has over 444 million records, and DHS has more than 60 million records in their own database) understandably causes concern over the likelihood of errors in the data, as well as difficulty in having such errors corrected in a timely fashion.

According to the SSA, 7 out of every 100 workers currently run though E-Verify result in an initial mismatch. The SSA database, according to the SSA’s Inspector General, has a 4.1 percent inaccuracy rate. According to Jim Harper, director of information policy studies at the Cato Institute in Washington, that means that about 17 million people’s names may not be exactly correct or there was an error when their information, such as date of birth, was entered. Though they are here legally, those residents would come back as ‘tentative non-confirmations.’ “As a matter of simple math, that means that if E-Verify were to go national, on the first day 1 in 25 legal new hires would be bounced out of the system.”

Another concern is whether E-Verify will actually produce the desired result. Since E-Verify cannot tell if a worker is submitting a stolen Social Security number, some critics speculate that widespread use of E-Verify may actually encourage identity theft by individuals desperate to find work.

At this point, employers with effective I-9 compliance programs would be hard pressed to find adequate incentive to voluntarily participate in E-Verify. They may have no choice, if they do business in one of the states that may soon require participation in E-Verify, since it is an “all or nothing” proposition. Further, apart from policy and privacy concerns that arise from the government maintaining a massive database about U.S. workers that must be accessed before a person is allowed to work, the potential benefits of an electronic verification system pales in comparison to the huge costs required to ensure that such a massive database is accurate. SSA would need to expand significantly to meet the new burden imposed by E-Verify as a national system. At present, E-Verify is more of a barrier to the hiring and retention of needed workers than it is a quick and easy solution.

The attorneys at Landis & Arn are available to answer any questions related to E-Verify and I-9 compliance.