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How to prevent businesses from hiring illegal immigrants

An American workplace. (Justin Lubin/AP)

One point of agreement between President Obama and the Senate's Octogang is on "workplace enforcement." They both want it! And even immigration rights advocates are keen on it.

"The border security issue is, at this point, 90 to 95 percent solved,"  Frank Sharry, head of the pro-immigrant group America’s Voice, told Ezra yesterday. "Employer verification is, at this point, less than 10 percent solved."

But wait — what are we talking about when we throw around phrases like like "employer verification" and "workplace enforcement"? After all, it's already illegal for employers to hire workers who they know — or should have known — came to the U.S. illegally. Under the 1986 immigration reform law, employers found guilty of employing 10 or more workers whom they know to be here illegally could face up to five years in prison.

But as a recent policy paper from the Migration Policy Institute explains, the reality is a lot less stringent. All employers have to do to comply with the law is complete a form called an I-9 verifying new workers' legal status. Doing more than that opens employers up to penalties for discriminating on the basis of citizenship status or national origin. And even if they don't fill out the form, fines start at only $3,200 per worker, and max out at $16,000 per worker for third or additional offenses. Perhaps unsurprisingly, employer compliance is much lower than it is for other workplace laws and regulations, such as the minimum wage.

Currently, the system is enforced via three mechanisms: E-Verify, work-site raid  and labor-standards inspections.


Created in 1997, the E-Verify system is a free online service offered by the Department of Homeland Security that allows employers to voluntarily check the legal statuses of their workers. Employers enter basic information — name, Social Security number, date of birth, alien registration number, etc. — which is then cross-checked against Social Security Administration and DHS databases. If the employee doesn't show up in any database as a legally authorized worker, they are given a "tentative non-confirmation." The employee then has eight days to prove they are legally eligible to work. If they don't, the employer is mandated to fire them.

The system started off slow but has rapidly expanded in recent years. In 2003, Congress mandated that the program be freely available to employers in all states, in 2007 all federal agencies were required to use it, and in 2008 the Bush administration finalized a rule, later implemented by the Obama administration, mandating that all federal contractors use it. Correspondingly, use of the system skyrocketed:

In 2011, the Supreme Court ruled constitutional an Arizona law that required employers to use E-Verify and threatened to revoke their business licenses if they knowingly hired illegal workers. Currently, 20 states mandate the use of E-Verify for at least some employers, while California has banned municipalities from mandating the program. Illinois banned the program until a federal court ruled it couldn't, and now simply bans a number of actions related to its use (such as using it before employing workers). There have been a number of proposals in Congress to federally mandate its use.

Does it work? Well, sort of. The most recent evaluation suggests that the program doesn't identify that many people it shouldn't as unauthorized to work, but that it misses a ton of unauthorized workers. An internal government study found that in 2008, the total error rate (that is, the percentage of checked workers who were inaccurately judged to be authorized or unauthorized) was 4.1 percent. Only 0.8 percent of authorized workers were found to be unauthorized, whereas 54 percent of unauthorized workers were found to be authorized. The former number is falling, especially for "ever-authorized workers," or workers who, at any point in the process, were confirmed to be authorized:

The false negative rate — that is, the rate at which authorized people wrongly come up as non-authorized — for foreign-born workers is, understandably, considerably higher, but it's starting to fall due to a program called "Naturalization Phase I" which added a further database check to the process:

Civil libertarians such as the ACLU argue that the system is inherently privacy-invading, which is fair enough. But the main effectiveness complaint to be lodged against it is that there are way too many false negatives, not that there are too many false positives.

Workplace raids

During the Bush administration, Immigration and Customs Enforcement (ICE) conducted its share of raids on workplaces employing undocumented immigrants, but it tended to focus on the immigrants themselves. The Obama administration has reversed that. Under Obama, the number of actions against employers have shot up and arrests of immigrants have gone down. Between fiscal  2008 and 2009, the number of "administrative arrests" of immigrants at workplaces fell from 5,184 to 1,647. Criminal arrests fell from 1,103 in 2008 to 444 in 2009. But while only 503 employers were audited in 2008, 8,079 were in 2009 — an 18-fold increase. Monetary penalties have shot up too:

That doesn't come close to tackling the full scale of the problem, but it's an area where enforcement is actually getting better, and fast.

Labor law enforcement

The Wage and Hour Division (WHD) of the Department of Labor has primary jurisdiction when it comes to enforcing fair labor standards, but they're woefully understaffed. They have 1,112 investigators who must cover 135 million workers and 7.3 million businesses. That means they have to pick their battles. And, MPI shows, that means they often can't do much to crack down on employers who are employing undocumented workers. What's more, WHD has a memorandum of understanding with ICE under which they can give temporary legal status to undocumented workers if they're needed as witnesses in a case against a major employer. All told, labor enforcement can't make that big a dent in the number of employers hiring undocumented workers.

How do we fix it?

One obvious thing to do that would combat employers who hire undocumented workers would be to boost the budgets of WHD and ICE, so that they have enough investigators to handle the caseload. MPI recommends that. Making E-Verify is more difficult. Simply mandating employers use it isn't sufficient, as low participation rates in even states that mandate e-verify usage show. MPI concludes that the only way to make E-Verify work is to (a) greatly expand its use, perhaps by mandating it nationally (b) combine it with a path to legalization so the number of undocumented workers is drastically reduced and (c) continue tweaking it to weed out false positives.

But there are much more aggressive options available as well. A report from William Galston, Noah Pickus and Peter Skerry released by the Brookings Institution emphasizes establishing more reliable identification systems. The false positive problem — or the problem of unauthorized workers coming up as authorized — is largely due to identity fraud, through forging or stealing identifying documents. "A 'hard' Social Security card, a secure driver’s license and a Personal Identification Number system (such as ATMs use) are all possible options; each presents different pluses and minuses," Galston, Pickus and Skerry write. "But Congress must adopt one approach, fund it, and make it the linchpin of a reliable workplace verification program."

In 2010, Sens. Chuck Schumer and Lindsey Graham — who are big players in the current debate — proposed a hard Social Security card system, in which the cards would include biometric information (fingerprints, DNA, etc.) of the owner, to prevent fraud. The Octogang framework calls for a "requiring prospective workers to demonstrate both legal status and identity, through non-forgeable electronic means prior to obtaining employment," which hints at the same sort of thing. Obama's framework "mandates a fraud‐resistant, tamper‐resistant Social Security card and requires workers to use fraud‐and tamper‐resistant documents to prove authorization to work in the United States."

It's not clear they're talking about a biometric card, but it does point in the direction of Schumer and Graham's previous proposal. But this would fundamentally change the purpose of Social Security cards, which until 1972 explicitly stated that they are "not for identification." You don't get much more identifying than DNA. Under this proposal, they would become a de facto national ID card, complete with all the privacy concerns that such a proposal brings. Congress will have to decide if the benefits in terms of making E-Verify  more viable (among other advantages) are worth the costs.