Each of the serious immigration reform proposals now being discussed in Washington relies to a great extent on the federal E-Verify system.  The notion is that employers will be required to go onto the system, enter personal information about prospective hires and find out from the system whether the employee is entitled to work in the U.S. or not.  Employers who do not use the system and hire an individual who is not legally entitled to U.S. employment would face fines and jail time. The employer penalties would reduce the incentive for employers to employ illegals, thereby reducing the incentive for illegal immigration. That all sounds simple and logical, but there are problems.

One problem is that E-Verify is not reliable enough to place prospective employees’ livelihoods at stake or to jeopardize the very existence of small businesses.  While the “official” error rate is 0.7%, in a recent informal test, twenty U.S. citizens checked themselves on the system and two came up as not eligible (the response is called a “Temporary Non-Confirmation” or TNC).  That is a 10% Type 1 error rate.  (A Type 1 error is where a person in the “good” category is erroneously categorized as in the “bad” category.  A Type 2 error is where a person in the “bad” category is treated as being in the “good” category.) There would be additional errors of Type 2.  While a 10% error rate may not sound like much, that equates to a million people out of every ten million perfectly legal job applicants who would be excluded from further consideration for a job, or would be placed in limbo while the E-Verify system performs further checks.  Even the 0.7% error rate would exclude over half a million legal job applicants a year.  This is simply unacceptable.

That brings up the second big issue–correcting errors.  It now takes an average of 100 days to resolve database problems, which often result from marriage-related name changes or misspellings on federal forms.  If E-Verify becomes mandatory, the task of resolving millions of problems is likely to drastically increase the time needed to correct system errors.  Employers and employees alike will be effectively left in limbo during this period.  Even 100 days (more than three full months) is too long.

Third, these problems with E-Verify, coupled with the draconian fines and penalties contained in some of the proposals (Title X of the White House proposal has fines of up to $75,000 and TEN YEARS in prison!) will discourage employers from hiring in the U.S. except as a last resort.  Robots do not require employment verifications, and off shore operations do not need E-Verify checks. 

These problems are not insoluble.  Phased implementation of E-Verify requirements, based upon independent performance metrics of the system’s accuracy and time to resolve discrepancies, would be one measure.  Adequate “safe-harbor” provisions for employers who use E-Verify would help.  Resonable allowances for employers and employees to be productive while E-Verify TNC’s are resolved would avoid unnecessary hardship. The essential requirement for any of these measures to be adopted, though, is for Congress and the White House to recognize the reality of the current shortcomings of E-Verify.  Assuming, as they are apparently doing, that it is some magic formula for solving all the issues of employee identity is folly and will lead to serious economic consequences.

Individuals can click here to access the E-Verify system in order to perform a self-check.