Businesses Cite a Catch-22 After Miss. Immigration Raid

Agents raided the Howard Industries plant in Laurel, Miss., even though the company had joined the federal work eligibility system, called E-Verify. (By Matt Bush -- Associated Press)

Bush officials say such attacks are a smokescreen by industry groups, who oppose the program because it works. They note that many opponents embraced E-Verify last year, when they expected it to have less bite as part of a broad overhaul that would have legalized many immigrant workers.

But one of the lessons of last year's failed immigration legislation is that the American public wants to see tougher enforcement at U.S. workplaces before it will expand immigration or legalize those in the country unlawfully, said Stewart A. Baker, assistant secretary for policy at the Department of Homeland Security.

"We have to have strong enforcement if we're ever to have a chance for comprehensive reform," Baker said.

Baker said the government is fixing E-Verify's flaws as it prepares to expand the initiative. Bush officials in early June proposed to triple the number of companies in the program, mandating participation by 169,000 federal contractors and requiring them for the first time to verify the eligibility of existing employees, not just new hires.

Enrollment in E-Verify has grown from 3,000 companies to 82,000 since it was expanded nationwide in 2003, but participation remains voluntary and covers 1 percent of an estimated 6 million U.S. employers and about 11 percent of annual hiring.

The proposed changes would double E-Verify's reach, covering more than 20 percent of U.S. hiring, federal officials said.

Business groups call the proposal an election-year power play that goes far beyond what Congress intended in 1996 when it created the voluntary system.

Although the government estimated the change will cover about 3 percent of the 153 million-member U.S. workforce, companies say the impact would be far greater, as contractors and subcontractors with even a small piece of the $430 billion that the federal government awards each year would need to review their payrolls. The U.S. chamber claims the rule would cost $10 billion to implement, 100 times the government's estimate.

"Without very significant changes, we would look at all options to stop a final rule, including a court challenge," said Randel K. Johnson, vice president and spokesman for the U.S. chamber.

Critics also say that E-Verify is not accurate enough, which could lead to discrimination against legal, foreign-born workers. Sorting out problems also threatens to swamp already overburdened Social Security administration offices that have their hands full tending to other work.

About 4.1 percent of 435 million Social Security records used by E-Verify contain errors -- or 17.8 million records -- the agency's Office of the Inspector General stated in June 2007. The system wrongly rejected foreign-born U.S. citizens 9.8 percent of the time in the first half of 2007, and it erroneously flagged noncitizens who had been authorized to work 1.4 percent of the time, a study last year found.

Federal officials insist that E-Verify is ready for prime time. In early 2007, 94.2 percent of workers were automatically verified. Another half-percent were mistakenly rejected, but workers were eventually able to clear up the problem, usually within two days. The remaining 5.3 percent of workers walked away, which officials said suggested that they were illegal.

The system has fixed errors that arose when workers enter the country legally or become citizens without notifying Social Security. Many remaining mistakes involve people who fail to report name changes after marriage or divorce.

Homeland Security has begun requiring workers who are permanent residents or noncitizens to present photo IDs that can be compared with their images in federal records. However, E-Verify lacks a similar check for people posing as citizens. As a result the system is feeding a black market for selling Social Security numbers, some of them stolen, business owners said.

"I think the general public thinks it's an answer-all to this whole illegal-worker-identity theft problem and it's not," said Bernie Kohl Jr., owner of Angelica Nurseries in Kennedyville, Md.

Kohl said E-Verify also creates a temptation for employers to discriminate against hiring legal immigrants because they don't want to hassle with trying to sort out the system's mistakes.

Congress still must decide whether to extend E-Verify beyond November. While the House voted 407 to 2 to extend it for five years, it required Homeland Security to pay the bills for the increased workload on Social Security and ordered new studies about its effectiveness. The Senate has yet to vote. Meanwhile, 13 states require some use of E-Verify, while Illinois has voted to bar it, creating a patchwork of laws likely to grow next year. Locally, Virginia lawmakers last winter rejected an attempt to mandate participation in E-Verify; no requirement exists in Maryland and the District.