The Impact of Employment Verification

By John Keeley on September 12, 2006

Statement of
John M. Keeley
Center for Immigration Studies

Field Hearing for Rep. Thelma Drake

Virginia Wesleyan College
Norfolk, Va.

In 1991, President George H.W. Bush authorized a small telephone-based pilot program with nine participating companies to see how verification of employment eligibility might work. Then, in 1995, the Clinton administration launched a larger experiment with about 1,000 volunteer employers nationwide. That same year, Congress acted on the recommendations of Barbara Jordan's Commission on Immigration Reform and required three pilots to be launched, and the largest of which continues today and is referred to as the Basic Pilot, a mainly internet-based system with more than 10,000 companies participating. According to the Department of Homeland Security, some 200 additional businesses enroll in Basic Pilot each week.

A consensus appears to have developed that mandatory verification is needed; both the House and Senate immigration bills call for the development of such a system, along the lines of the existing Basic Pilot. There are some significant differences between the two bills the Senate bill, for instance, is likely to stretch out the implementation of the new system longer than the House bill, its penalties for noncompliance are weaker, and it does not provide for the verification of existing workers.

But more important is the very concept of mandatory, universal verification of new hires eligibility to work Is it practical? Is it burdensome? Is it good or bad for small business?

Because there were 56 million hiring decisions made in the United States last year, a nationwide, mandatory verification system would be a large undertaking, much more extensive than the current voluntary pilot program. But putting it in context shows that there is no reason to think implementing it would be unachievable, or even that difficult, so long as there are adequate resources and political support. There are about 260 business days in a year, so there are an average of 215,000 hires made each day. But customers download nearly 1.3 million songs each day from i-Tunes; Wal-Mart conducts more than 10 million transactions per day at its 3,700 stores in the United States; and Visa processes more than 100 million transactions each day.

Of immediate concern to business is whether a verification system would represent an additional burden that makes it harder to do their jobs. Small business, in particular, lacks the infrastructure to deal with the proliferating mandates coming from all levels of government. Mandatory employment-eligibility verification would not be especially burdensome to employers. The information that is to be verified all has to be collected anyway as part of the normal hiring process. The only way employers would no longer have to collect a news hire's name, date of birth, and Social Security number is if Congress abolished the Social Security system and income tax withholding which I don't see on the horizon. That being the case, verifying (at no cost to the business) the information that employees have to provide anyway is hardly a new mandate.

DHS has approved the first of what are likely to be many Designated Agent companies in the business of conducting the Basic Pilot for other firms. The first such firm, Form I-9 Compliance in Newport Beach, Calif.,, offers a web-based, paperless I-9 form linked to the Basic Pilot, and includes extra services as well, such as reminders of the upcoming expiration of an alien worker's employment authorization. Such services do what TurboTax does for tax filing eliminate paper, reduce errors, and file (or in this case verify) electronically.

It's not just that a verification system would sit lightly on the back of business; it actually makes good business sense to participate. Many small businesses might well be alarmed by all the talk they've been hearing of penalizing employers as an immigration-enforcement strategy. While crooked, faithless employers deserve whatever penalties they receive, the point to an employer-verification system is not to penalize employers, but to empower them. By taking the guesswork out of hiring a legal workforce, the system that grows out of the Basic Pilot can help firms build a workforce on concrete rather than sand, a workforce that will have no reason to run away if there's an immigration raid, a workforce that won't be arrested when the inevitable and I believe it is inevitable crackdown comes.

In fact, I would submit that public companies that are not participating in the Basic Pilot are neglecting their fiduciary responsibility to their shareholders through imprudent labor practices that will jeopardize the stability of their labor force. Privately held businesses, while not answerable to stockholders, nonetheless have a moral responsibility to their employees and customers and creditors to conduct due diligence in hiring.

As beneficial as many firms find it to verify their workers, it is important for Congress to make participation mandatory not for punitive reasons, but rather to protect legitimate, patriotic businesses. Imagine the landscaper in Virginia who recognizes the advantages of hiring only legal workers, and enrolls in the Basic Pilot. He has no trouble finding labor, though he has to offer a dollar an hour more than his competitors this is the problem. And it's happening all over the country. His competitors, still hiring illegal aliens, are underbidding him on commercial landscaping contracts, and he's forced to drop out. Congress has a responsibility to level the playing field and ensure that civic-minded, law-abiding firms eager to participate in the Basic Pilot are not put at a disadvantage for doing so.

A verification system is an idea whose time has finally come it is a practical, pro-business measure whose eventual implementation is inevitable. Small business all business would do well to get on board now and incorporate these new practices sooner rather than later.