E-Verify: Bad for Both Businesses and Employees

Immigration reform is next on the national legislative menu. The good news is that both Republicans and Democrats have vowed to fix our broken immigration system. The bad news is that they are poised to repeat a key mistake of the past: forcing employers to do the work of verifying whether or not someone is here legally.

The system known as "employer verification" is an outgrowth of the last major round of immigration reform, the 1986 Simpson-Mazzoli Act. In the past few years, the E-Verify system has undergone some streamlining and revision. But it remains messy and problematic -- for employers and for workers.

The labor movement and the business community often find themselves at loggerheads. But this is one area where business leaders and employees share a common purpose: getting out from under E-Verify's unwieldy, error-prone and ultimately flawed set of tools.

For businesses, the system is onerous and distracting. Even if the many cases of "false positives" (people wrongly labeled as undocumented by the system and then forced to undergo additional paperwork and fees to clear their names) could be eradicated, 54 percent of unauthorized workers were still cleared to work by E-Verify, according to an independent review by Westat in 2010. The government acknowledges E-Verify's imperfections, yet it still levies fines against employers who make mistakes.

"Immigration enforcement is a government responsibility," said Steven Fischman, president of New England Development in Newton, Mass. "Forcing employers to utilize E-Verify creates confusion, fear, loss of productivity, and creates an inappropriate relationship between employers and employees by turning employers into policemen."

Mr. Fischman speaks as a businessman. And he isn't even from one of the states, such as Alabama, where E-Verify has been widely adopted by employers. According to a 2012 analysis from the University of Alabama, that state saw its GDP drop by at least $2.3 billion when between 40,000 and 80,000 workers fled the state en masse after elected officials strongly pushed E-Verify and other anti-immigration measures.

From a labor perspective, the system is equally bad. Immigration reforms that drive employees back into the shadows or create a two-tiered system of employment only foster unproductive workplace antagonisms. Moreover, they allow unscrupulous operations willing to embrace "off the books" practices to prosper at the expense of businesses trying to take the high road.

The result is the depression of wages for all workers, immigrant and U.S.-born, and the elimination of the type of healthy middle class needed to sustain a thriving American economy. For this reason, even once-protectionist unions have joined with business leaders in promoting comprehensive immigration reform. As AFL-CIO Political Director Michael Podhorzer said recently to the National Journal, "There's a greater awareness that when immigrants have the same rights of other workers, that helps all workers."

As lawmakers in Washington convene to discuss immigration, they should look beyond the E-Verify system to a next-generation solution, one that is driven by hard evidence and data about what works, rather than the desire to punish employers and workers. To help them, labor and business alike should convey a clear message: No one wants the confusion and cost incurred by a fragmented, flawed system that places the burden of verification on employers.

A version of this post first appeared on Crain's Chicago Business.