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The Future is Cloudy for E-Verify

E-Verify has long been considered the promised land of employment eligibility verification in the US, ever since it was first introduced in the late 90s as a pilot program for improving the Form I-9 process. Over the years, the program has grown exponentially in size and complexity, but at its core, it still remains the only “electronic” method for confirming employment eligibility of newly hired employees.

But if you dig deeper into the program, and the various rules and policies surrounding it, the picture becomes cloudy. For example, E-Verify is billed as a voluntary program, but HR managers must take into account the various laws and resolutions passed at the state, city, and local levels which mandate participation. And organizations doing business with the federal government (either as a prime or subcontractor) may be required to use E-Verify by virtue of the so-called federal contractor rule.

Overall, E-Verify is viewed favorably by its users, routinely scoring high in customer satisfaction (especially as compared with other federal government programs). Surveys reveal that employers generally feel that E-Verify meets expectations and achieves the overarching goal of employment eligibility verification. On the other hand, critics have questioned the program’s accuracy while highlighting that E-Verify can effectively block legal (i.e., work-authorized) individuals under certain circumstances.

Enforcement of E-Verify requirements presents another quandary. Various reports have indicated that states, by and large, do not enforce the E-Verify laws that are already on their books. As a result, some states with E-Verify mandates report having low enrollment as compared against the number of employers that should be using the system. Needless to say, this defeats E-Verify’s overall purpose in reducing unauthorized employment.

Last but not least, we have the cost. While participation in E-Verify is “free” (in the sense that the government does not charge a fee), employers have noted that there are significant setup and maintenance costs associated with learning all of the E-Verify rules, training HR staff, and implementing the process at participating locations. In 2010, Bloomberg Government estimated that making E-Verify mandatory would cost employers $2.7 billion to comply, with the vast majority of those costs falling on small businesses.

Which brings us to the present. Last week, the White House introduced its budget for the next fiscal year, impacting a wide variety of government agencies including the United States Citizenship and Immigration Services (USCIS), which effectively owns the E-Verify program. In case you missed it, we talked about the budget in our blog last week with regards to Immigration and Customs Enforcement (ICE) and I-9 audits.

The President’s budget for E-Verify presents a slightly different picture. While the White House clearly sees E-Verify as a “critical employment verification system” to combat unauthorized employment, they are no longer proposing “mandatory nationwide use” as they have in the last two budget requests. Moreover, the USCIS budget for E-Verify reflects a slight decrease in overall funding based on various efficiencies achieved by the program during the past couple of years.

But while the USCIS may be taking its foot off the gas this year with regards to major E-Verify initiatives, the agency is still adding new employers at a fairly steady clip while also planning new operational initiatives to improve overall system accuracy and effectiveness.

FY2019 Program Statistics

But first, let’s take a look at some key E-Verify metrics from fiscal year 2019 (Oct 1, 2018 through September 2019):

909,000: the number of employers enrolled in E-Verify as of the end of FY2019

93,000: the number of new employers added to the system in FY2019

40.5 million: the number of E-Verify cases in FY2019

While the number of enrolled E-Verify employers has been steadily growing, not all of the organizations are truly “active” in the sense that they are creating new E-Verify cases in the system. According to the budget documents, approximately 252,000 employers accounted for the 40+ million cases that were created in FY2019. To a degree, this is expected as many small businesses may not necessarily hire employees within a given year. However, it’s also possible that organizations are simply “signing up” without an actual commitment to verify their employees in the system.

Measuring System Accuracy

According to the FY2021 Budget in Brief document, E-Verify reduced manual case processing by 49,000 cases from approximately 388,000 to 339,000 cases per year. Manual review happens when a USCIS staff member needs to check an employee’s records in order to confirm work eligibility.

The DHS budget also reveals the number of cases where E-Verify was unable to immediately verify an employee (based on the information submitted and available data in the system), but later found the employee to be work authorized after they contested a tentative nonconfirmation (TNC). In FY2019, there were approximately 85,000 such cases, as compared with 62,000 the year before.

Critics describe these scenarios as “erroneous TNCs,” which create a potential barrier to employment for the worker and increase the overall transactional costs for the business. It’s also important to note that erroneous TNCs do not include situations where an employee does not contest because they are never properly informed of a TNC, they quit or are fired for reasons unrelated to the TNC, or they fail to contest for reasons other than NOT being unauthorized.

The USCIS has made significant progress in reducing the number of inaccuracies during the last twenty years as evidenced by the overall declining erroneous TNC rate, which was as high as .8% in in FY2006 (according to 2012 Westat report). In FY2019, the erroneous TNC rate was calculated as .21%.

But it appears there will always be a segment of cases that are destined for the TNC queue – particularly for noncitizens. Although not reported in the most recent budget request, historical reports have shown that noncitizens as a whole generally endure a greater erroneous TNC rate, due in part to their frequently changing immigration status or name-related mismatches.

To that end, on October 16, 2019, E-Verify deployed an upgrade to improve the validation of Form I-94 and foreign passport numbers – an effort which should hopefully reduce the number of TNCs issued to individuals presenting a foreign passport with an I-94 during the verification process.

Web Services Enhancements

Last year, USCIS deployed an upgrade to the E-Verify Web Services specifications (known in the industry as simply “version 30”) in order to align electronic I-9 users’ experience with the broader modernization enhancements that were released to E-Verify “web users” in 2018. This included enhanced duplicate case checking, photo matching, dual TNC notices, and the auto-closing of E-Verify cases, to name just a few. We wrote about the upgrade in some detail in our blog post last year.

At the end of the day, version 30 was a fairly substantial system upgrade, requiring the development of new business logic, interface changes, and the integration of new API endpoints. And as is typically the case, this new version had its share of hiccups as well – prompting the USCIS to release a variety of bug fixes to ensure cases could be submitted without error.

Monitoring and Compliance

While E-Verify does not have any “enforcement” authority per se, the USCIS closely monitors and tracks a wide variety of employer activities through its aptly named, Monitoring and Compliance Branch. The M&C unit identifies and resolves compliance issues, notifies employers of noncompliant behaviors, and offers compliance assistance through emails, phone calls, desk reviews, and site visits. M&C conducts these monitoring and compliance activities to prevent misuse, abuse, discrimination, breach of privacy, and fraudulent use of E-Verify under applicable laws, rules, regulations and agency policies.

As the FY2019 numbers illustrate below, the vast majority of M&C “outreach” occurs through emails which inform employers of the potentially noncompliant behavior along with proper instructions for using the E-Verify system. In the event of a pattern or practice of E-Verify issues, the M&C branch may also conduct a “desk review” (more commonly referred to as an “audit”) whereby they will ask the employer to provide them with E-Verify employment-related documents, such as E-Verify case printouts, TNC FAN letters, employment verification procedures, and other process documents.

In FY2019, USCIS noted that they made further enhancements in their automated monitoring and notification capabilities, so employers should expect M&C actions to continue to rise in the coming year as illustrated in the projections below.

Source: USCIS Budget Overview, FY2021

But wait, there’s more! Pursuant to the Memorandum of Understanding (MOU) that each employer signs, E-Verify can also share information with other government agencies, including those which have enforcement authority – namely, ICE and the Immigrant and Employee Rights section of the Department of Justice (IER).

In FY2019, E-Verify made 1,330 referrals to other external agencies, with the vast majority of cases being sent to IER to investigate potential discrimination.

Source: USCIS Budget Overview, FY2021

How can E-Verify tell that discrimination is occurring? One possible way is that they may analyze the number of cases where a lawful permanent resident was E-Verified with an I-551 permanent resident card. If there are a significant number of such cases, the M&C unit may consider that the employer was actually telling new hires to show them a green card (never mind the fact that many LPRs will indeed present a green card of their own volition).

In other cases, the M&C data analytics may reveal that the employer is not following all of the necessary steps to resolve a TNC (including printing the FAN, providing the employee an opportunity to contest, allowing the employee to work and receive training during the referral process, etc.). The IER has published a document on how employers can avoid discrimination in E-Verify, which provides further insight into how an employer can quickly get into trouble if they are not following the rules.

Plans for the Future

While the DHS budget reflects an overall decrease in E-Verify funding for FY2021, the USCIS is constantly evaluating new initiatives which are designed to improve system reliability and overall accuracy. Late last year, they launched a so-called “E-Verify Redesign Pilot” which would allow employees to conduct their own employment verification and return the response to enrolled employers.

E-Verify has a similar program in existence now (known as Self Check), where individuals can run an E-Verify query on themselves in order to see if there are any issues – completely outside of the employment context. But under the current program rules, employers cannot use a Self Check result as evidence of employment authorization, and instead, must run the employee under their usual process.

According to the DHS budget request, this new pilot program would eliminate the need for work-authorized employees to go through the E-Verify process multiple times with different employers, and would also offer identity validation features for the employee enrollment, which would help prevent fraud.

Conclusion

The USCIS looks to invest approximately $118M in the E-Verify program in the next fiscal year, concentrating on strengthening system architecture, improving system reliability and resiliency, and improving upon system speed and overall accuracy. Employer enrollment will likely continue at a healthy clip (averaging 1,500 new employers per week), which means that E-Verify should reach a milestone this year – with 1 million employers enrolled in the system.

As more employers use E-Verify, system integrity and accuracy will become even more important than in the past. Employers who have never used (or heard of) E-Verify will need proper training and instruction in order to avoid potential discrimination or even worse, denying employment to an authorized worker. All the while, employers will continue to walk the delicate tightrope of compliance, managing both their Form I-9 and E-Verify processes amidst ever-changing government rules and the new realities of remote and virtual workforces.


About John Fay

John Fay is an immigration attorney and technologist with a deep applied knowledge of I-9 compliance and E-Verify rules and procedures. During his career, John has advised human resource managers and executives on a wide variety of corporate immigration compliance issues, including the implementation of electronic I-9 systems. In his current role, John serves as President at the LawLogix division of Hyland Software, Inc., where he oversees all aspects of the division’s operations and provides strategic leadership and direction in the development and support of Form I-9, E-Verify, and immigration case management software solutions.

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