Mandatory Proof

REVIEW SUMMARY
What. Mandatory verification of employees.
Issue. Federal program is imperfect; bill doesn't include phase-ins.
Impact. Higher hiring costs for some industries.

Florida's three key industries — tourism, construction and agriculture — are likely to bear the heaviest burden if proposed legislation mandating an employee-screening system becomes law.

From Idaho to Georgia more and more legislatures are requiring employers — private and public alike — to use the federal government's optional employment authorization program known as E-Verify. The objective is clear: to curb illegal immigration by way of the work place.

Congress created the E-Verify program in 1996 as a voluntary Internet-based pilot program to help employers verify the work authorization of new hires. It applies to U.S. citizens and non-citizens. In 2003, Congress authorized the expansion of the pilot program to employers in all 50 states.

The nearly 217,000 companies using E-Verify filed 13.4 million cases last year, according to a recent Government Accountability Office report.

The goals of E-Verify are to: 1) reduce the employment of individuals unauthorized to work; 2) reduce discrimination; 3) protect employee civil liberties and privacy; and 4) prevent undue burden on employers.

Federal contractors and subcontractors have been required to use the U.S. Citizenship and Immigration Services' E-Verify system since Sept. 8, 2009, to verify their employees' eligibility to work in the United States.

Except for those federal contractors, it's an optional system. But that hasn't discouraged more and more states from adopting similar systems in the past five years as a way to deal with effects of illegal immigration.

So far, 11 states passed laws and three others mandate employers by executive orders to use the computerized system.

Florida may be next to adopt legislation.

Gov. Rick Scott already directed state agencies by executive order to use the system, but now some legislators are pushing for a broader reach.

Sen. Alan Hays, R-Umatilla, and Rep. Gayle Harrell, R-Stuart, filed identical bills requiring all employers — private and government — to begin using E-Verify by Jan. 1, 2012. There would be no phase-in period, a practice used in several states as a way to give smaller companies time to comply.

Says Hays, “This has everything to do with the fiscal impact that the illegal people are having on our infrastructure, especially our schools and our health care.”

The highlights of Senate Bill 518 and House Bill 691:

• It would require every employer to use the employment authorization program to verify the employment eligibility of each employee.

• Any business that does not use the E-Verify system shall lose its license to do business in the state until the business has registered with the E-Verify system.

• It would prohibit an employer from employing an unauthorized alien.

• It would require every public employer — meaning any department, agency or political subdivision of the state — to register with and participate in the E-Verify system.

• It would prohibit a public employer, contractor or subcontractor of the public employer from contracting for services in the state unless the contractor or subcontractor registers and participates in the system.

• It would provide a “safe harbor” for an employer. There could be “no cause of action against an employer who, on the date of firing an employee, was enrolled and participating in the E-Verify system.”

Industry views vary

The Florida Chamber of Commerce, for one, opposes mandating E-Verify for any private employers. Construction and tourism industry representatives have concerns, but the state's principal agriculture lobby, the Florida Farm Bureau, is more direct.

“We are opposed to a mandatory E-Verify,” says Joshua Craft, assistant director of agriculture policy at the Florida Farm Bureau. “One of the reasons is because it's not a 100% accurate program.”

Craft points out problems such as identity theft and the regulatory burden it could put on a small farmer who might need to hire 300 workers for six weeks.

That could cost the farmer roughly $3,000, according to Tom Kontinos, owner and president of TKI, a private investigation and employment screening agency in Fort Myers. He expects the E-Verify mandate to help grow his business.

“I'm hoping it's required,” says an admittedly biased Kontinos. “There's going to be a lot of smaller businesses saying, 'I don't have time to do this.'”

He charges roughly $10 per employee and counts the Tween Waters Inn on Captiva Island among his clients that don't want the hassle of training employees to use the system.

The rate varies a bit according to volume, says Kontinos, who uses E-Verify along with a proprietary system that he says, “verifies the record belongs to that person.” But Kontinos also says even with that extra layer of screening, it isn't 100% accurate.

It's also not particularly user friendly, according to Kontinos, who has heard the frustrations from human resources people. “It's very difficult for employers to register for the E-Verify system,” he says. “To become an E-Verify user, you're required to take a test, which you have to pass. The test is rather difficult,” Kontinos adds, “and you have to study all the rules and regulations of the E-Verify process. And you have to pass with a 70% in order to be able to continue to use it.”

Darrell Turner, president of Turner Tree and Landscape, based in Manatee County, sees another problem first hand: finding qualified workers to add to his staff of 106.

“We are in the hiring mode,” Turner says. “We are using E-Verify, and we're having a shortage of applicants,” Turner has several government contracts necessitating he use the system.

“We could hire 15 new workers, but I'm not sure they could pass E-Verify or not,” says Turner. “We have our receptionist doing it. It takes up 20% of her time.”

Turner's frustration illustrate one of the Farm Bureau's other objections to the program. Craft says prospective employees won't apply for openings if they know a company is using it. “They'll just go to a state that's not an E-Verify state,” he warns.

The Florida Restaurant and Lodging Association is monitoring the legislation, but doesn't yet have an official position. “It seems to be a little clunky and not always accurate,” says Richard Turner, the association's vice president of government relations.

Accuracy and 'safe harbor'

One state, Illinois, is attempting to limit the use of E-Verify until the accuracy of the federal databases improves. The current lack of accuracy, though only coming up in less than 2% of the cases, is a big industry concern. “It should make all citizens nervous about how accurate the system is,” says Turner. “A business could lose its right to conduct business maybe for a single act.”

Adds Steve Cona III, chief operating officer of the Florida Gulf Coast Chapter of Associated Builders and Contractors: “The only thing we're asking our state legislators for is a safe harbor if E-Verify isn't accurate.”

Cona argues that employers shouldn't be penalized for “false positives” that can occur with name mismatches due to multiple or hyphenated names, but also through identity theft. Employer fraud occurs, too, and all of the above can lead to the dreaded TCO: tentative nonconfirmation notice. And that leads to a bureaucratic and potentially costly process of investigation and appeals.

But the Hays/Harrell bill provides for the safe harbor language essentially protecting firms that use the system in good faith from penalties.

'Stair-step provision'

The Hays/Harrell bills are an all-in, do-it-quickly approach. Unlike some of the other states, their bills don't phase-in the requirements over several years. And it doesn't limit the system to government employers and their contractors and subcontractors.

In Mississippi, the law is phased in over three years for all government and private employers. It first enrolls the government agencies and biggest employers, requiring employers with fewer than 30 employees to comply in the third year.

Says Mississippi Sen. Michael Watson, the bill's sponsor, “I thought that was important to help our smaller businesses know what was coming. That has been a very effective part of the bill.”

Asked about a phase-in approach, Hays signaled his willingness to amend his bill. “The thing we got to be sensitive to here are the three main industries that use international employees — agriculture, hospitality, construction. We got to make sure we don't cripple those industries.

“I am open to any type of thing that we can do that is going to get us where we need to be, and making sure people working in Florida are legal to be employed,” Hays says.

How E-Verify works

All employers must complete an I-9 form for every new hire within three business days of the date the employee starts work. Employers may not begin the I-9 process until after the individual is hired.

The employer and newly hired employee jointly complete the I-9 Employment Eligibility Verification form. The form asks for the employee's name and date of birth; social security number; citizenship status; an A number or I-94 number if applicable; documentation to establish work authorization; and proof of identity and expiration date, if applicable.

Employees may use a U.S. passport or unexpired employment authorization card, or a combination of a driver's license and social security card. Documents must appear genuine.

An employer then enters information from the I-9 form into the E-Verify system, where it is compared against 455 million records in the Social Security Administration (SSA) database and 80 million records in the Department of Homeland Security's (DHS) immigration databases.

Most inquiries are resolved within 72 hours. Some inquiries can't be confirmed instantly by DHS because of changes in citizenship status, name changes (e.g., marriage/divorce) or typographical errors.

To resolve an unconfirmed verification, the employee must visit an SSA office or call DHS. The employee has eight federal work days to start resolving the case.

Source: Immigration Policy Project, National Conference of State Legislatures.

How other states do it

Arizona: The Arizona Fair and Legal Employment Act, enacted in 2007, requires all employers to use the Basic Pilot Program to verify employment eligibility. Arizona HB 2745, enacted in 2008, prohibits government contracts to any contractor and subcontractor that fails to use E-Verify. It provides that companies can be punished only for unauthorized workers they hired after Jan. 1, 2008, and that a violation at one location of a company shuts down only that location, not the entire corporation.

Mississippi: SB 2988, signed in 2008, requires public and private employers to participate in E-Verify. The phase-in period occurs over three years — from largest to smallest employers. An employer violating the law is subject to the cancellation of public contracts, ineligibility for contracts for up to three years and loss of business license for up to one year. The law also makes it a felony to accept or perform employment knowing or in reckless disregard of the immigrant's ineligibility to work, with penalties from one to five years of imprisonment and/or $1,000 to $10,000 in fines.

Rhode Island: On March 27, 2008, Gov. Carcieri issued an executive order requiring executive agencies to use E-Verify; and for all persons and businesses, including grantees, contractors and their subcontractors and vendors to use E-Verify.

South Carolina: HB 4400, enacted in 2008, requires public employers and public contractors to register and participate in the federal work authorization program E-Verify to verify all new employees. All public employers, private employers with more than 100 employees and public contractors with more than 500 employees must comply with the law's provisions on or after Jan. 1, 2009; contractors with more than 100 employees on July 1, 2009; and all other contractors on Jan. 1, 2010. The penalty for knowingly hiring unauthorized immigrants is a felony and punishable with up to five years in prison.

Source: Immigration Policy Project, National Conference of State Legislatures.

Gulf Coast Lawmakers on E-Verify Committees

Senators

• Mike Bennett, R-Bradenton (any committee)

• Nancy Detert, R-Venice, Commerce and Tourism Committee

• Dennis Jones, R-Seminole, Regulated Industries Committee

• Arthenia Joyner, D-Tampa, Judiciary Committee, Budget Committee

• Garrett Richter, R-Naples, Judiciary Committee, Budget Committee

Representatives

• Larry Ahern, R-St. Petersburg, Business and Consumer Affairs Subcommittee, Government Operations Subcommittee

• Denise Grimsley, R-Sebring, Appropriations Committee

• Paige Kreegel, R-Punta Gorda, Appropriations Committee, State Affairs Committee

• John Legg, R-Port Richey, Appropriations Committee

• Seth McKeel, R-Lakeland, State Affairs Committee, Appropriations Committee

• Ken Roberson, R-Port Charlotte, Business and Consumer Affairs Subcommittee

• Darryl Rouson, D-St. Petersburg, Appropriations Committee and Business and Consumer Affairs Subcommittee

• Trudi Williams, R-Fort Myers, Appropriations Committee, State Affairs Committee

• Dana Young, R-Tampa, Business and Consumer Affairs Subcommittee, Government Operations Subcommittee