IFA Seeks Protective Language in Proposed E-Verify System Expansion

Franchising World October 2011

By: Wayne Weikel

In the absence of a comprehensive federal plan to address the problems associated with illegal immigration in this country, more and more states have sought to tackle the issue on their own. Such a piecemeal approach, to what has traditionally been considered a federal issue, has created great uncertainty among the business community, which is now being asked to add enforcement officer to their list of duties. With many franchise systems stretching across state boundaries, keeping up with differing state-level immigration laws presents a considerable challenge to the management and operation of the franchise.

E-Verify

The common conduit of these expanded responsibilities to verify an applicant’s immigration status is known as E-Verify. The E-Verify program was created as a voluntary Web-based pilot program to help employers verify the work authorization of new hires. The program is administered by the U.S. Department of Homeland Security in partnership with the Social Security Administration.
A common criticism levied against expanded use of the E-Verify system pertains to overall system accuracy. An evaluation conducted in 2007 by Westat, a well respected research and statistical analysis firm, for DHS found that the accuracy of the E-Verify database had improved substantially. However, considerable work remained on the verification rates of lawful permanent residents and immigrants authorized to work, with only 72 percent and 63 percent receiving immediate confirmation, respectively. Overall, SSA estimates that 4.1 percent, or 17.8 million records, contained discrepancies related to name, date of birth or citizenship status.

A common criticism levied against expanded use of the E-Verify system pertains to overall system accuracy.

Chamber of Commerce of United States of America v. Whiting

On May 26, 2011, the U.S. Supreme Court upheld a 2007 Arizona law that required the use of E-Verify by all Arizona employers, punishable by suspension or revocation of the employer’s business license. The Federal Immigration Reform and Control Act of 1986 (IRCA) preempts any state or local law from imposing civil or criminal sanctions upon those who employ, recruit, or refer for employment, unauthorized aliens. An avenue explicitly excluded in the IRCA, however, was state authority to set requirements for business licensing and other similar laws. The Supreme Court, by a 5-3 vote,* found that the language in IRCA did not preempt the state law because it was a business licensing law permissible under IRCA. The ruling also stated that although Congress had made the program voluntary at the national level, it had expressed no intent to prevent states from mandating participation.
After reviewing the ruling in Chamber of Commerce v. Whiting, some judicial scholars believe, that the Court has carved a clear pathway for state legislative action that can be followed without the fear of judicial rebuke.

State Activities on E-Verify

At present, 18 states require the use of E-Verify for public and or private employers–15 though legislative action. Pennsylvania and Tennessee, two states that do not presently require employers to use E-Verify have tried, nevertheless, to encourage its usage by creating a safe harbor from state penalties for employers voluntarily using the program.

Interestingly, two states have moved in a counter direction, with Rhode Island rescinding a 2008 executive order requiring state agencies and contractors to use E-Verify and Illinois enacting legislation to limit the use of E-Verify until the database accuracy is improved.

According to the National Conference of State Legislatures, in the first half of 2011, state legislators introduced 1,592 bills and resolutions relating to immigrants and illegal immigration in all 50 states and Puerto Rico. The number of bills introduced represents an increase of 16 percent compared to the first half of 2010, when 46 states considered 1,374 bills relating to immigrants and illegal immigration. The trend is even more apparent when compared with 2006. In that year, just five years ago, there were approximately 570 bills filed, representing an increase of 179 percent.

For many legislators, the difficult variable was not always knowing what legislation would withstand judicial review and what legislation would not. With the clear language contained in Chamber of Commerce v. Whiting, many legislative observers expect a new round of legislation to be drafted, tracking closely to the framework of the ruling. Such legislation will now have precedent and judicial approval, both factors that could contribute to lowering the hurdles for other states to follow Arizona’s lead in future legislative sessions.

Federal Law Filed On E-Verify

On June 14, 2011, bills in both the U.S. House of Representatives and U.S. Senate were introduced to make E-Verify a permanent and mandatory verification system for all employers, including federal, state and local governments. The Legal Workforce Act, H.R. 2164, and the Achieving Accountability Through Electronic Verification Act, S. 1196, would, while using different ramp-up periods, require businesses to verify all new hires prior to employment and re-verify all existing employees. With the ongoing debt crisis still looming and the upcoming election cycle, it would be unlikely for such legislation to see significant action in the remainder of this legislative session.

Impact on Franchising

The International Franchise Association has long advocated, at both the state and federal level, for reducing regulation on business as a means to spark economic growth. As it relates to increasing obligations on the business community to now enforce federal immigration law, when the federal government has not seen fit to address the issue in a comprehensive manner, the IFA has argued in support of safe havens for companies that use E-Verify. Without such language, employees wrongly turned away as a result of non-confirmation by E-Verify could have a cause of action for wrongful termination or discrimination. As new legislation is filed for the 2012 legislative sessions, IFA will continue to press for appropriate protective language for its membership in any proposed expansion of the E-Verify system.

For more information on International Franchise Association activities in the states, contact IFA Director of State Government Relations & Public Policy Wayne Weikel at 202-662-0792 or

wweikel@franchise.org

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*Recusing herself, the newest Justice on the Court, Elena Kagan, did not participate in the consideration or decision in Chamber of Commerce v. Whiting. Even though she was not Solicitor General when the U.S. government’s brief was filed, Justice Kagan had been Solicitor General when the Court had invited the United States to provide its views about the constitutionality of the Legal Arizona Workers Act and may well have been deeply involved in deliberations in the office about the government’s position.