Photo Illustration by Travis Rothe; Photo Courtesy Library of Congress
With the passage of the Immigration Reform and Control Act in 1986, employers were introduced to the brand-new Form I-9 as a way to verify the employment eligibility of all new hires.
Then in November 1997, the federal government introduced the Basic Pilot Employment Verification Program to five states as an electronic barrier to prevent ineligible individuals from being employed in the United States. Eventually that program morphed into E-Verify, an electronic, Internet-based employment verification system that today is operated by the U.S. Department of Homeland Security and Social Security Administration.
Though more than 400,000 employers rely on E-Verify to access the employment eligibility of their new hires, the federal government does not require all employers to use it. It is only required for government agencies, government contractors and companies operating in one of the 17 states where its use is required universally. Otherwise, an employer can use the Form I-9.
However, private employers are able to voluntarily implement E-Verify if they choose. That could change soon though if the Border Security, Economic Opportunity and Immigration Modernization Act of 2013, which is the hotly contested immigration reform package being debated in Congress, becomes law.
Though it’s lost within the rhetoric about border security and citizenship for people who have entered the country without legal permission, a major focus of immigration reform is addressing the growing skills gap between U.S. workers and high-tech jobs, says Lynn Shotwell, executive director at the American Council on International Personnel.
“Employers need to be able to access the talent that they need, whether they’re recruiting internationally or recruiting at U.S. universities, where half of the graduating classes—if you get into the advanced degrees in science and technologies—are foreign nationals,” says Shotwell, who believes the U.S.’s ability to remain competitive in the global economy is largely dependent on the passage of immigration reform.
The bill would increase the minimum amount of H-1B visas to 110,000 per year from 65,000, with a cap set at 180,000. It would also create a new “W” visa for low-skilled, temporary workers.
In addition to the provisions that would increase the total amount of temporary work visas, the bill contains a provision that would require all employers to start using the E-Verify system.
If the immigration reform bill passes in its current state, there will be a five-year phase-in period for employers to implement the verification system. The system works by comparing the information presented on a new hire’s Form I-9 with information in the Homeland and Social Security databases to confirm the employment eligibility of that worker. Employers with 5,000 or more employees will have two years to complete the process, whereas companies employing 500 to 4,999 people will have three years, according to the Senate’s summary of the bill.
Regardless of how long it takes to implement E-Verify, extensive preparation and procedural fastidiousness will ultimately determine how successful a company will be at using the system.
WHY USE E-VERIFY AND ASSOCIATED RISKS
Planning to use E-Verify is like choosing to enter a swamp. The risks are innumerable, but with a skilled guide and unyielding vigilance, they’re easily manageable.
Take, for example, insurer Prudential Financial Inc., whose HR department oversees the company’s E-Verify procedures and has a 100 percent compliance rate, says Marietta Cozzi, the company’s vice president of human resources. Nancy Roman, director of process management for staffing at Prudential, says they haven’t encountered any legal troubles during the three years since its implementation.
While using E-Verify as successfully as Prudential isn’t easy to do, implementing the system is most likely easier for a large company than smaller organizations. “It involves setting up a system, training the appropriate people, and building it into the system of the company. It is a significant effort. It’s something that big companies are used to doing, but it is a significant effort to do it,” says David Grunblatt, a partner at New York-based law firm Proskauer Rose who heads its Immigration & Nationality Group.
Prudential’s 100 percent compliance rate doesn’t seem to be that much better than the 99 percent nationwide average, but that small difference could produce a breeding ground for a slew of employee lawsuits ranging from wrongful termination to discrimination, Grunblatt says.
Not every company has been as successful as Prudential in avoiding lawsuits stemming from the misuse of E-Verify. To further illustrate Grunblatt’s point that large companies are better equipped to implement E-Verify, one can look at Pacific Steel Casting Co., which in 2011 was sued by the Glass, Molders, Pottery, Plastics & Allied Workers International Union Local 164B because it implemented the electronic verification system without first notifying or bargaining with its unionized employees.
Berkeley, California-based Pacific Steel, a midsize employer that has between 500 and 1,000 workers at any given time, argued its business relationship with a federal contractor required implementation of E-Verify and therefore did not have to inform its unionized employees. The National Labor Relations Board, however, disagreed and ruled in favor of the union workers, finding Pacific Steel was in violation of the National Labor Relations Act. Under the act, it is illegal for an employer to refuse to bargain in good faith about wages, hours and other conditions of employment.
The manufacturer agreed to reinstate employees who lost their job as a result of unlawfully implementing E-Verify and pay those employees’ lost wages and benefits, according to the NLRB’s ruling.
Because Pacific Steel had ties to a federal contractor, it volunteered to implement E-Verify. Prudential, however, decided to implement the system because the company thinks the government will soon mandate its use by all employers, Roman says.
This sentiment appears to be increasing among employers, most likely because of a federal push to make the use of the system universal through the immigration reform bill.
Many businesses “are anticipating that this is going to become the law of the land anyway, so they might as well get started on it and get a system in place while it is still a voluntary program and look like a good corporate citizen by doing it,” Grunblatt says.
Another common reason why employers are volunteering to use the system already is that some companies feel they’re providing themselves another layer of protection against a government audit of their Form I-9s. But that isn’t necessarily how an audit works. Companies hiring in good faith can still find themselves in trouble with the Department of Homeland Security.
“We’ve had members that were sanctioned and fined on the I-9 for not writing out the full state’s name on it. So it’s not really a ‘knowingly hire’ violation, it’s a paperwork violation,” says Mike Aitken, vice president of government affairs at the Society for Human Resource Management.
A “knowingly hire” violation occurs when an employer hires a worker it knows is not eligible for employment in the U.S. One way this kind of violation can happen is if a company does not follow up on a “tentative nonconfirmation” administered by the E-Verify system within the required eight-day period, and instead allows the new hire to continue working. A tentative nonconfirmation means Social Security and/or Homeland Securitycould not confirm that an employee’s information matches government records.
Dawn Lurie, a partner at law firm Sheppard Mullin Richter & Hampton in Washington, D.C., says a new hire can even draw a tentative nonconfirmation from something as simple as a name change after getting married. The new name may not match the Social Security number listed in the agency’s database. In a situation like this, the employer must be sure to help the employee remedy the error.
“There’s a whole process that has to be put into place,” Lurie says. “The company has to notify the employee, tell them what they need to do, what agency they need to visit or call. And it all has to be done very carefully to protect the worker, to ensure there’s been no due-process violation.”
Carefully following Homeland Security’s legal procedures normally ensures a company can avoid E-Verify lawsuits; simply using the system to demonstrate good corporate citizenship will not.
“Once a company enrolls in the program, it must use it consistently and must resolve any initial nonconfirmations. Any pending, unresolved nonconfirmations could later expose the company to charges of knowingly hiring undocumented workers if the worker is deemed to be illegal, but the company failed to definitively resolve the discrepancy,” said Geetha Adinata,a lawyer with Atlanta-based law firm Ford & Harrison, in an email.
While the potential risks and strict oversight required to manage them may make E-Verify seem like a difficult system to use, most employment law experts, as well as Prudential’s Roman, agree the system has become much more user-friendly and accurate in the past few years.
Ultimately, human error is what tends to get companies in legal trouble over E-Verify more often than systemic mistakes.
“The one thing about the E-Verify system is that it’s incredibly improved over the years. There used to be a lot of problems with the system that aren’t there today. I mean, certainly, it has holes in it. Identity theft, for example, is a big issue. But it’s not the system that it was three or four years ago,” Lurie says.