E-Verify, a piece of the puzzle not a brick in the wall: why all U.S. employers should be made to use E-Verify, just not yet.

• Author: Wohlleben, Carl

INTRODUCTION

On November 10, 2008, National Public Radio ("NPR") began running a "funding credit" during their broadcast sponsored by the Department of Homeland Security ("DHS"). (1) The funding credit, which is similar to an advertisement, appeared like any other government-sponsored public service announcement: "[s]upport for NPR comes from NPR stations, and the Department of Homeland Security (DHS), offering E-Verify, confirming the legal working status of new hires. At DHS dot gov slash E-Verify." (2) Shortly after running the funding credit, NPR received so much criticism that its Ombudsman issued a statement assuring its audience that NPR did not endorse E-Verify and that it would remain objective in reporting on the program. (3)

E-Verify is an electronic employment verification program that allows participating employers to check identity and employment documents of recently hired employees against a federal government database. (4) Results are given near instantaneously, so that an employer quickly learns whether a new hire is legally authorized to work in the United States. (5)

However, E-Verify has flaws that have produced an uncomfortably high error rate, including errors where some legal employees are initially found to be unauthorized to work. (6) In response, the federal government has recently invested in upgrades that have solved at least some of the flaws, (7) but the system still needs significant improvement. (8)

This Note attempts to analyze the growing movement to make employer use of E-Verify mandatory at the federal, state, and local levels. While use of E-Verify is voluntary for most employers, the federal government requires nearly all if its contractors to participate. (9) Several state and local governments also require employers to use the program. (10)

Part I of this Note reviews the development of E-Verify. Part II presents an overview of recent state and federal actions implementing E-Verify and the legal questions raised. Part III outlines the impact E-Verify has had on employers and employees. Part IV discusses recent technological alterations and improvements to the program. Part V proposes a more effective implementation of E-Verify, recommending exclusive federal control of the program; significant investments in technological improvements; and a gradual federal rollout of E-Verify that in time will require its use by all U.S. employers.

1. THE ROLE OF THE FEDERAL GOVERNMENT IN IMMIGRATION AND THE DEVELOPMENT OF E-VERIFY

   The federal government has plenary power over immigration matters. (11) Immigration policy and enforcement are often tied to employment issues, (12) but the burden of confirming the legal status of employees fell to employers only with the enactment of the Immigration Reform and Control Act of 1986 ("IRCA"). (13) The IRCA established sanctions for employers that hire "an alien knowing the alien is an unauthorized alien," i.e., immigrants who are not authorized to work in the U.S. (14) Employees in turn must present appropriate documentation establishing both their identity and employment authorization. (15)

   With the passage of the Illegal Immigration Reform and Immigrant Responsibility Act of 1996 ("IIRIRA"), Congress directed, as part of an enhanced enforcement program, the development of an electronic employment verification system between the Immigration and Naturalization Service (now part of DHS) and the Social Security Administration ("SSA"). (16) Together, the agencies established an Internet-based system employing the SSA's database. (17) The project, initially known as Basic Pilot, was to expire after four years, but Congress and the President have repeatedly extended it. (18) Recently, Congress and the President extended E-Verify through September 2012. (19)

   E-Verify is free and voluntary for employers who, to participate; sign a Memorandum of Understanding ("MOU") with the DHS. (20) New employees must present their employer with a completed U.S. Citizenship and Immigration Services ("USCIS") Form I-9 ("I-9") along with appropriate documentation. (21) Within three days of hiring new employees, an E-Verify participating employer enters information from the completed I-9 into the E-Verify system. (22) Almost instantaneously, the employer will receive one of two responses: employment authorized or tentative non-confirmation.

   If the employer receives "employment authorized," the employer is understood to have a rebuttable presumption of having not "knowingly" hired an ineligible worker. (23) If the employer instead receives a tentative non-confirmation ("TNA"), it must inform the employee and then provide the employee with an opportunity to contest the finding with either the SSA or the DHS. (24) Once the employee has been informed that his or her documentation has not been accepted, it is the employee's responsibility to contact the SSA or DHS to clarify their status. (25) Only after the employee is either unwilling or unable to prove eligibility to work may the employer terminate the employee. (26)

   Despite the promise of E-Verify, the system has not worked as reliably as initially hoped. For example, up to ten percent of newly naturalized citizens have had errors in their records. (27) Accordingly, the 2007 Westat report determined that significant database improvements must be made if E-Verify were to be made mandatory for all employers. (28) As such, the federal government has recognized E-Verify's shortcomings and has begun to invest in upgrades and improvements. (29)

2. RECENT STATE AND FEDERAL ACTIONS AND THE LEGAL ISSUES SURROUNDING THEM

   1. States and Municipalities Have Begun to Require Employers to Use E-Verify, Creating Confusion and Questions of Federal Preemption

      Because the federal government has been slow to respond to growing concerns about immigration enforcement, many states have taken it upon themselves to enforce immigration law in part by employing E-Verify. (30) Some states require mandatory use of the program by all employers within the state (e.g., Arizona, Mississippi, South Carolina), while other states require mandatory use by all public employers and those contracting with the state (e.g., Georgia, Minnesota, Oklahoma). One state simply provides a "safe harbor" for employers using E-Verify (Tennessee). (31)

      However, not all states have embraced E-Verify. Indeed, Illinois has affirmatively forbidden the use of E-Verify by any employer, public or private, within the state. (32) The California Assembly has contemplated similar legislation. (33) Even some states that require the use of E-Verify have done so with misgivings. (34)

      That fact that some states require employers to use an otherwise voluntary federal program has implicated issues of federalism. It is well settled that where the federal government has delineated a national immigration policy, that policy will preempt any contrary action taken by states and municipalities. (35) However, the Supreme Court has noted that not "every state enactment ... deal[ing] with aliens is a regulation of immigration and thus per se preempted." (36)

      The principal issue concerning recent state and municipal EVerify legislation is whether such legislation is preempted by federal law. The IRCA plainly states that it takes precedence over any state law: "The provisions of this section preempt any State or local law imposing civil or criminal sanctions (other than through licensing and similar laws) upon those who employ, or recruit or refer for a fee for employment, unauthorized aliens." (37)

      One federal district court recently read the statute to expressly preempt a local government from making the use of E-Verify mandatory for employers. In Lozano v. City of Hazelton, the City of Hazelton enacted an employment enforcement ordinance requiring E-Verify participation from all city agencies and businesses that contract with the city. (38) The court found the city's reliance on the "licensing" exemption unpersuasive and found the mandatory use of E-Verify expressly preempted by federal law. (39) Instead, the court determined that the "IRCA is a comprehensive scheme [that] leaves no room for state regulation." (40)

      While the courts in Lozano found local mandatory use of E-Verify preempted, other courts have found similar laws constitutionally sound. For example, the Tenth Circuit recently reversed (41) an Oklahoma district court's issuance of a preliminary injunction that prevented enforcement of a state law requiring the use of a "Status Verification System" as part of a larger employment verification scheme. (42) While the district court found a substantial likelihood that the law was preempted by the IRCA, (43) the Court of Appeals adopted the opposite conclusion and stated that Oklahoma could not require the use of E-Verify. (44)

      Similarly, immigrant and business groups challenged an Arizona law in 2007 requiring all employers in the state to register with, and use, E-Verify. (45) The plaintiffs claimed that, much like Hazelton's ordinance, the Arizona law was expressly preempted. (46) However, here the federal district court held, and the Ninth Circuit Court of Appeals affirmed, that the act "falls within the savings clause of IRCA's preemption provision." (47)

      In addition, a Missouri federal district court found valid a municipal ordinance providing a safe harbor for businesses using E-Verify as part of employment eligibility enforcement. (48) The court determined the ordinance "specifically relates to the issuing of a business permit" (49) and therefore was not expressly preempted because the "plain meaning of the statute [IRCA] clearly provides for state and local governments to pass licensing laws which touch on the subject of illegal immigration." (50)

      State and local ordinances that are not expressly preempted by federal law are still subject to "implied preemption." Implied preemption takes two forms: field preemption and conflict preemption. (51) Field preemption...