Under Reagan's IRCA, employers became subject to fines for hiring illegal workers. Anyone who has ever had a job in the US since enactment of that law has to fill out an I-9 and providing supporting documentation. Most violations were for circumventing the law by paying workers "off the books," or for deliberate fraud. Since the, the E-Verify system has been developed. Although use of the system is voluntary, two states (Arizona and Oklahoma) have made it mandatory for all employers public and private. Some states have made it mandatory for public workers, as has the Federal government. If it is good enough for the Federal government, it defies commonsense why the Federal government, under Obama, now objects to its mandatory use at the state level, or with the private sector. It is acts like these that give Conservatives pause and concern regarding Federal commitment to enforcement efforts.
There are three objections to E-Verify. Regarding the privacy right violation concerns, an employer basically inputs information in eight fields from a completed I-9 form. If no one has objections to the I-9 regarding privacy, why the concern now? Because it involves a computer? The other objections are that the system is unreliable and that it returns false negatives.
From the inputted information, a computer database is searched to match SSN, TIN and other government information about the prospective employee. Actually, E-Verify eliminates the possibility of worker discrimination by removing the human element. E-Verify queries more than one database. Besides the Social Security Administration, other agencies are searched. The greater the number of queries, the greater the accuracy.
Today (including governments), over 238,000 employers use E-Verify and there are 16 million annual queries. Still, that represents only 4% of all applicants. Initially, there were a large number of Temporary Non-Confirmations. Since the number of databases has increased, the number of TNC have decreased. The current immediate confirmation rate is 97.4%. That translates into an additional 2.4 million applicants being cleared for employment. Originally, it meant that legal workers were erroneously being screened out. An audit by the IRS and SSA in 2008 discovered that there were 22,500 name mismatches occurring in E-Verify because social security records were not updated due to marriage, divorce, and death. Most of this is attributable to the would-be employee failing to notify the SSA of name changes.
An independent auditor analyzed E-Verify and found that in 3.9% of all cases, TNC were returned. Potential employees denied employment via E-Verify are entitled to an appeal. Only 0.4% were successfully appealed with the remaining 3.5% falling into one of three categories. First, some applicants failed to appeal the finding because they were illegal or they found other employment. Some just were unaware of an appeal process. The third is that the applicant was in the country illegally. In any case, it demonstrates that the intended effect of E-Verify- to deny employment to illegal immigrants- had its desired effect.
Additionally, use of E-Verify would be a positive defense against violations should someone slip through the cracks. As mentioned earlier, E-Verify depends upon eight pieces of information from an I-9 and is only as accurate as the information on the I-9. Any employer with access to a computer can take advantage of the program. Unfortunately, E-Verify mainly works for those employers on the up-and-up in the first place. Also, employers and applicants can deliberately enter or offer fraudulent information. For example, over 55,000 TIN were used in 2007 alone for tax purposes.
IRCA established fines against employers. The usual method of detection was through workplace raids. During the Bush Administration, many likened these efforts to Nazi tactics- more incendiary Liberal rhetoric that does nothing to solve the problem. There was no outcry when the Clinton Administration used similar methods. The purpose also has a deterrent effect in that it chills employers from potentially hiring illegal workers. In 2009, ICE reported that besides the raids, it cost about $5 billion to deport 393,000 illegal immigrants, or an average of $12,500 per person deported.
The problem with the current schedule of financial penalties is that they have failed in their intended deterrent effects. Since labor is perhaps an employer's greatest cost, they make the decision to gamble by hiring illegal workers. If the penalties were increased to involve a standard fine plus the difference in wage savings to the employer, it would have a greater deterrent effect. For example, if an employer saves $50,000 in labor costs, they would be assessed a fine of $1,000 per illegal employee plus $50,000 for the difference in wages. This would have a greater deterrent effect in that their potential labor cost savings (and profits) could be wiped out in one fell swoop. Additionally, those funds can then be used to defray the costs of deportation and remove the argument that hiring illegal workers depresses wages overall (a common union argument). Another good idea is that employers post surety bonds against the hiring of illegal workers which would help defray costs to the government in enforcement efforts. Of course, that would have to be weighed against additional financial burdens on employers. Arizona rescinds the business licenses of repeat offenders, a solution within their rights and one that other states should adopt.
Hence, the solutions are obvious here. E-Verify should be mandatory for all employers. Its effectiveness has been proven in several settings. Workplace enforcement efforts should be a priority with stiff and substantial and consistent financial penalties instituted and collected with these funds diverted to defray the costs of enforcement and eventual deportation. States should rescind the business licenses of employers who are repeat offenders. The idea is to create a huge financial disincentive to hire illegal workers.