The solution to the immigration battleground? 'E-VERIFY!! E-GAD!! E-NORMOUS!!'

By Richard W. Pierce, Esq.

Richard W. Pierce PC

The problem of those present in the United States without authorization (described legally as "aliens present without the authorization of the Attorney General;" commonly as "illegals" or "illegal aliens") and who work improperly has been a vexing dilemma for decades.

Such workers arguably decrease wages paid to those legally authorized to work. They may cause a burden on social services and schools.

On the other hand, many work at jobs "legals" do not want for a variety of reasons--hours; working conditions; type of job; location; temporary nature of the job.

Such workers help to keep down the cost of food growth and production, construction, and food preparation, keeping the U.S. cost of living relatively low. Further, there would be a tremendous cost in attempting to remove all those here illegally.

Some of those considerations may explain, in part, the seeming reluctance of both Republican and Democratic administrations of not having been more aggressive in pursuing removal ("deportation") of such workers.

A bigger reason also may be pure financial.

In most cases, those working here without authorization have had FICA and income taxes withheld as they likely presented Social Security cards to obtain employment in the first place.

Many of those cards do not belong to the persons presenting them. Unless legalized somehow, those workers will never be able to collect on the Social Security they have paid into the system. Estimates of the excess Social Security wages on which withholding has occurred for such individuals range upwards to $500 billion dollars.

This has resulted in actual payments into the Social Security system of perhaps several billion per year for several years which will not be paid out, but which help to sustain some modicum of liquidity in the system.

For many years, the preferred method to deal with the problem of unauthorized employment was through the issuance by the Social Security Administration ("SSA") of "No Match" letters to Employers.

These were generated by the SSA when it received annual earnings reports from employers and the SSA determined the names provided did not match those it had on record for the specific social security number.

Upon receipt of a No Match letter, the employer had to take steps with the employee to verify/correct the information with the employee (leading the employee to be, in the words of Ernie Harwell, "long gone"), terminate the employment, or otherwise straighten out the situation.

Although still in use, No Match letters simply have not worked as well as intended.

As a result, the U.S. government has now switched emphasis to the E-Verify program for federal contractors.

This system is intended to identify illegal workers early in their employment. Authorization for the program is found in two executive orders; one by President Clinton and one by George W. Bush. The Obama Administration has continued the program.

Additionally, those who are required to enroll include employers ordered to participate by an appropriate Administrative Law Judge; and, employers seeking to hire F-1 (foreign) students in science, technology, engineering and mathematics who are seeking a 17 month extension of what is called Optional Practical Training.

This article concentrates on the federal contractors, but the process is much the same; penalties and enforcement are identical.

E-Verify is a free internet-based system operated jointly by the U.S Citizenship and Immigration Services ("CIS") and the SSA.

It is important to note in addition to the U.S. program, that as of December 2010, at least 26 states had also enacted or were seriously considering legislation requiring employers in such states or those contracting with the state to use the E-Verify program.

By the close of 2010, over 240,000 employers, representing more than 830,000 work sites were using E-Verify. It is estimated that the Federal E-Verify program currently covers over 4,000,000 workers. Approximately 1,000 new employers enroll weekly.

The starting point for E-Verify is the by now well-known I-9 Form, introduced by the Immigration Reform and Control Act of 1986 ("IRCA").

Briefly, IRCA requires every intending employee to provide certain documents to the prospective employer showing the person is present legally and has authority to work in the US.

As mentioned, the nearly universal document utilized by non-U.S. citizens and lawful permanent residents ("green card" holders) has been a Social Security card.

During enrollment, one of the major requirements of E-Verify is for the employer to sign a Memorandum of Understanding ("MOU"). Among other items, the MOU obligates the employer to provide access to employment records to the SSA and CIS.

Full terms of the MOU may be found at www.uscis.gov (type "E-Verify Form" into the search window).

The E-Verify system may not be used to pre-screen employees prior to hiring; nor may it be used to verify EXISTING employees, except for "Federal" contractors discussed below.

SSA will use information from the I-9 process to determine the validity of the individual worker's documents for name, SSN, and date of birth. It may be that all SSA information matches correctly, but the CIS next checks its records for citizenship and immigration status.

If the employee is not verified by both agencies, a "Tentative Nonconfirmation" is issued to the employer. The employer must notify the employee of the TNC; the employee has eight days to contest the TNC. If the matter is not resolved favorably, the worker must be terminated.

The law requires every "Federal contractor" or subcontractor (including sub-subs), or recipient of American Recovery and Reinvestment Act funds, to enroll.

E-Verify covers a contract with the U.S. if the period of performance is more than 120 days and is for $100,000 or more ("Federal contract"). It is up to the government contracting officer to note that the contract is subject to E-Verify. Subcontractors (no matter the tier) are subject to E-Verify if their contracts are $3000 or more.

It is mandatory that contractors and succeeding levels of subcontractors advise those downstream of the E-Verify requirement in their respective contracts.

A Federal contractor must use the system to verify all new hires as well as those existing employees assigned to the Federal contract (it has the choice of using E-Verify for all existing Workers). The system is optional (at least at the Federal level) for non-Federal contactor employers, except those noted above.

Certain contracts with the U.S. government are exempt. A significant exception is that E-Verify only applies to work performed in the United States. Also not covered are contracts which involve only "commercially available off-the-shelf ("COTS") products, and agricultural products shipped in bulk.

Additionally, E-Verify does not apply to commercial services contracts which are part of the purchase of COTS, performed by the COTS provider, and normally provided for in a COTS transaction.

Further, verification is not required of those with certain types of security clearances. Colleges and Universities, state and local governments, and sureties under Federal agency takeovers only need verify new hires and existing employees working on Federal contracts.

Moreover, a worker is not considered assigned to a Federal contract if he or she normally performs only support work with no substantial duties under that contract.

So, why enroll?

There are any number of reasons. First, for Federal contractors, it is simply Econ 101--it allows the employer to obtain or retain Federal contracts.

Second, it provides a rebuttable presumption against knowingly having hired unauthorized workers.

The third reason is just practical--E-Verify likely is the wave of the future. It is probable that there will be more pressure at the U.S. level to expand coverage.

In addition to U.S. E-Verify, as mentioned, over half the states have enacted (or are considering enacting) some form of legislation requiring E-verify. Especially for large, multi-state employers, even those without Federal contracts, at some point, compliance will be an easier matter administratively.

If an employer chooses not to comply, what happens? Nothing good.

First, as stated, it loses the right to continue, or obtain, U.S. government contracts for one year. Non-registration may have a negative business impact with some clients. If an employer does not terminate a non-complying worker and fails to notify CIS, the employer is subject to a fine of between $500 to $1000 per failure.

Finally, if an employer should have terminated an employee and it is later determined the worker was in fact unauthorized, the employer will be presumed to have knowingly hired an unauthorized person which enhances penalties as set forth below.

For paperwork violations, the penalties are $110 to $1,100 for each violation (each mistake on the same I-9 counts as a separate violation), and a Cease and Desist Order will be issued. That issuance raises the probability of knowingly hired for future cases.

If the employer is found to have knowingly hired, that raises the fine to $375 to $3,200 per worker for the first offense; for the second offense--$3,200 to $6,500 per worker; for each subsequent--$4300 to $16,000 per worker.

Each knowingly hired violation also increases the prospects of a finding of a CRIMINAL pattern/practice. In that event, in addition to the above, a fine may be levied of $3,000 per worker and up to six months jail. Prosecutions will likely include against the top executives and managers, not just the lower rung personnel.

Much more information can be found at www.uscis.gov; click onto "E-Verify" on the right side. Also, Google: "Frequently Asked Questions: Federal Contractors and E-Verify (Revised April 2010);" "E-Verify Supplemental Guide for Federal Contractors," and, "E-Verify User Manual for Federal Contractors." All are official CIS publications.

Will E-Verify make any impact on unauthorized employment? No doubt, in many cases, the answer is "Yes."

Some areas are obvious--public construction projects; defense contracts (suppliers are exempt); security firms providing services to the governments; colleges and universities receiving Federal contracts/grants.

It is not so clear that there will be much effect on occupations where it is likely that there are many working illegally--food growth and production; restaurants; private construction; many low skill service industries.

Some of these industries--like agriculture--are treated as COTS and exempt from E-Verify. It is likely, absent a mistake by SSA or CIS in its initial determination, when confronted with a TNC, an employee will still be "long gone," but that will start at the beginning and not after a year or more of unauthorized employment as happens under the No Match letter process.

Nevertheless, as we go forward, the reach of E-Verify and the required MOUs will likely expand.

So, as with Old McDonald, "And on his farm, he had an E-Verify, with here a MOU, there a MOU, everywhere a MOU MOU."

Richard Pierce has practiced in Ann Arbor since 1968 and has concentrated in immigration and nationality law since 1985. He is an active member of the American Immigration Lawyers Association, and a past President of the Washtenaw County Bar Association.

His writing includes: "Immigration Reform and Control Act of 1986,'' "Immigration Aspects of the U.S. Canadian Free Trade Agreement," and "Love, Marriage, Immigration and Divorce" which have appeared in the Washtenaw County Bar Association's Res Ipsa Loquitur.

He is a frequent speaker on immigration law, and an invited lecturer at Eastern Michigan University and the Ave Maria School of Law when it was located in Ann Arbor.

He was named one of the 20 most prominent immigration attorneys in Southeastern Michigan by DB Magazine.

Published: Mon, Mar 7, 2011

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