Interior Enforcement of Immigrant Employment: Policy Analysis

Introduction and Scope of the Problem

In 2004, only three U.S. companies were issued penalty notices by the U.S. Department of Homeland Security (DHS) for knowingly employing unauthorized workers (Porter, 2006). At the time, demographers estimated that six to seven million unauthorized immigrants were employed in the United States — a number approximately equivalent to 5% of the U.S. workforce (Porter, 2006). In 2007, DHS reported that 275,000 non-citizen immigrants were caused to leave the U.S. through DHS action (Lee, 2009). By 2009, the unauthorized immigrant population was believed to stand at approximately 12 million (Lee, 2009).

In April 2009, Secretary of Homeland Security Janet Napolitano instructed United States Immigration and Customs Enforcement (ICE) to intensify targeted investigations of employers who knowingly hire unauthorized workers. During 2010, ICE broke its record for criminal prosecutions related to the unlawful hiring of immigrants for employment purposes. In 2009, 114 business owners, employers, managers, and/or supervisors were charged with breaking the law; in 2008 that number was 136 — but in 2010 it rose to 180. Overall, ICE had a greater presence at employment sites in 2010, completing more than 2,200 I-9 audits, up from approximately 1,400 in 2009.

Employers are fundamental drivers of immigration policy, and they tend to be quite unhappy with provisions for fines and penalties against employers who hire unauthorized workers — the lynchpin of current immigration law. A pivotal problem with policies enacted to date is that policymakers have tended to underestimate and misunderstand the business impact of enacted and proposed state and federal legislation.

History of Policy Interventions

As Lee (2009) observes, while scholars have offered rich and textured analyses of the ever-expanding grounds for removing immigrants, surprisingly little attention has been paid to immigration screeners — the persons and institutions that assist DHS in identifying candidates for removal — including "the workplace and our nation's employers" as an under-theorized site of immigration screening. This procedural analysis works within an established theoretical framework to identify and propose a potential solution for the non-compliance of many American employers who continue to hire, and facilitate the hiring of, unauthorized workers.

On July 10, 2009, Secretary Napolitano announced plans for DHS to rescind the 2007 Social Security No-Match Rule. The No-Match Rule made provision for letters to be sent to employers when W-2 forms submitted did not match records held by the Social Security Administration (SSA). The intent of the regulation was to clarify employer obligations. Beginning in 1994, the SSA sent no-match letters to employers exhibiting patterns of non-compliance with the Immigration Reform and Control Act of 1986 (IRCA). IRCA prohibits employers from "knowingly" employing aliens who are not authorized to work in the U.S. Employers questioned whether receipt of a no-match letter constituted "constructive knowledge" that an employee was unauthorized to work. This policy void permitted employers to take little or no action following receipt of the letters.

The terrorist attacks of September 11, 2001, brought about a significant policy change with regard to workplace immigration enforcement. The federal government, appropriately focused on preventing further attacks, limited workplace immigration enforcement to what is considered "critical infrastructure" (Porter, 2006). Places with particular vulnerability to terrorism, such as airports and nuclear power plants, came under additional scrutiny, and enforcement in other venues was effectively diluted. Even in more peaceful and prosperous periods, enforcement appeared to diminish: "Even in the late 1990s when the economy was booming and labor markets were tight, the INS virtually stopped looking for illegal immigrants in the workplace" (Porter, 2009). This trend reversed in the years that followed, in concert with economic fluctuations that tend to put the spotlight on immigrant workers — authorized and unauthorized alike. The number of I-9 audits rose considerably, criminal prosecution of employers increased noticeably, and the use of fraudulent identification became more blatant.

The E-Verify System: Implementation and Limitations

A new system was instituted by DHS to monitor and enforce workplace practices related to unauthorized workers. A "more modern and effective E-Verify system" (Carafano, 2009) was implemented to facilitate the process of instantly checking the work eligibility status of job applicants. E-Verify uses a secure online system to triangulate data from DHS databases, I-9 forms, and SSA databases (Carafano, 2009). Employers are not charged for use of the service; however, they are responsible for providing the infrastructure and personnel needed to operate it. On the heels of implementation, DHS announced "the Administration's support for a regulation that will award federal contracts only to employers who use E-Verify to check employee work authorization" (Carafano, 2009). Use of E-Verify is required by the federal government for all employers performing work under federal contracts, voluntary for government contractors in only ten states, and mandatory for all employers in three states.

Westat, a consulting firm hired to evaluate E-Verify's performance, reported that the system provided accurate answers 96% of the time (Edwards, 2010). According to the Westat assessment, employers did not perceive the system as burdensome; of 104 employers surveyed, 94 reported general satisfaction with E-Verify (Edwards, 2010). A fundamental problem with the system, however, is that identity theft allows approximately half of unauthorized immigrants — 54%, according to Westat — to evade proper screening (Edwards, 2010). As Westat reported, "Many unauthorized workers obtain employment by committing identity fraud that cannot be detected by E-Verify" (Radnofsky & Jordan, 2010).

United States Citizenship and Immigration Services (USCIS) has attempted to address the problem of fraud by including photos from green cards and immigrant work authorization documents in the E-Verify system (Edwards, 2010). Barring sophisticated forgery, the use of photos helps prevent immigrant workers from using names, dates of birth, and immigration work numbers that do not belong to them. In addition to the photo screening tool, DHS planned to add additional databases and "a monitoring and compliance branch to detect identity fraud" (Radnofsky & Jordan, 2010).

The monitoring and compliance branch was being implemented none too soon. According to U.S. Attorney Edward J. Tarver, selling identities stolen from U.S. citizens to prospective unauthorized workers is "a rapidly growing problem across our country" (Jordan, 2011). On April 13, 2011, three restaurant managers employed by a McDonald's Corporation location in Savannah, Georgia, were charged with selling identification documents belonging to U.S. citizens to unauthorized workers. According to federal authorities, the arrests pointed to "the risks employers are increasingly taking to mask the hiring of illegal immigrants" (Jordan, 2011). ICE special agent-in-charge Brock Nicholson noted that as the federal government's ability to investigate improves, businesses wanting to hire unauthorized workers are developing "more sophisticated methods" to circumvent the E-Verify system. Many employers look the other way when identity theft is suspected. The Savannah case and similar incidents "could be indicative of a new trend" signaling increased incidents of identity fraud (Jordan, 2011).

Conclusion

The immigrant worker landscape leans heavily toward traditional remedies that entail criminal prosecution and fiscal penalties. The very real economic drivers of employing unauthorized workers seem to have been lost in the shuffle of competing policies, actual practices, and cultural shifts. The causes are well known; the solutions, therefore, should be evident. Shifting agricultural subsidies to reward compliant businesses, establishing employer education programs with tax incentives, and creating a whistleblower mechanism together represent a more comprehensive and systemic approach than the current reliance on fines and prosecution alone. Addressing the economic and structural incentives that perpetuate non-compliance — rather than simply penalizing individual violations after the fact — offers a more durable path toward effective interior enforcement of immigrant employment law.