Small Businesses Dodged a Bullet on E-Verify – For Now

E-Verify immigration status of workers

If you haven’t heard of the E-Verify system yet, chances are you will in the future.  E-Verify is an online system used by employers to verify that a worker is eligible to work in the United States.

Very recently there is a push to make E-Verify a mandatory requirement for ALL employers. That requirement was included in the Senate immigration bill wending its way through Congress currently.

At the last minute, a judiciary panel said no to a proposal that would have required use of the system within 18 months after the bill became law.  And small businesses and small business advocates who see E-Verify as a regulatory burden, breathed a sigh of relief.

But it may only be the calm before the storm.

The existing bill, unless changed, would still require most employers to use the system within four years.

The trend at the state level seems to be moving toward requiring employers to use the E-Verify system to verify workers’ eligibility.  Most of the state laws were passed in the last few years.

In all likelihood we will see more states make E-Verify mandatory — although the Senate bill may preempt the state laws in favor of Federal law, if it is passed.   And, of course, we’ll have to see whether the current Senate bill passes with the existing E-Verify requirement still in place.

Good Intentions, But Costly

E-Verify is used by a relatively small but growing number of businesses in the United States.  Over 400,000 employers use it currently, with more than 5,000 new employers added each month.

Many of those using it today are government contractors or public employers.  Or they are located in the nine states (Arizona, Utah, North Carolina, South Carolina, Georgia, Alabama, Mississippi, Louisiana and Tennessee) that make E-Verify mandatory for most or all employers.

On the surface, E-Verify seems like a good idea. It’s free to use and it is designed to help employers comply with immigration law.

While the system is free, it adds a layer of bureaucracy that hits small businesses hard.  Ann Cun, writing on the LawLogix blog, quotes DeAnne Hilgers of Lindquist & Vennum LLP, on the general impact of E-Verify on small businesses this way, “The costs to employers are significant, especially to smaller employers who do not have HR staff. Often, that HR person is the company owner who is up to his or her elbows with their employees working to make the company successful. When the employer loses an employee, they are losing twice the direct productivity – the lost worker’s and their own.”

NASE (the National Association for the Self Employed) did a survey of its members earlier this year.  A majority agreed that some kind of system to verify a worker’s status to work in this country is needed. But as one small business owner puts it, the current E-Verify is not that system.

According to Stephen McNeilly, owner of ServiceProz, Inc., and a member of the NASE Member Council, “We want to comply with any new immigration requirements as long as they are not burdensome and impact our businesses and bottom-lines. The E-Verify system we currently already use takes too long to verify employment. We need a system that is efficient, easy to use and isn’t complex.”

Nearly 80% of small businesses want a system that will allow them to spend under 30 minutes verifying an employee’s immigration status, per the NASE survey.  Yet according to one source, a business may need to spend more than 30 hours on educational materials in order to enroll in and comply with E-Verify.

Back in 2011, analyst Philip E. Wolgin of the Center for American Progress estimated the program would cost small businesses between $1,254 to $24,422 just to implement in the first year. After that it would cost about $435 per year.

Not Reliable Enough

If the time burden and cost weren’t enough, some say E-Verify is not even reliable. For example, back in 2011 Wolgin’s report suggested E-Verify had only about a 46 percent success rate identifying undocumented workers.

Meanwhile, last week Kathy Lotspeich, Deputy Chief of the Verification Division for U.S. Citizenship and Immigration Services told the Senate judiciary panel there are other problems too.

Of the 21 million employee queries E-Verify processed last year, about 1.3 percent returned a “Tentative Non-Confirmation response,” said Lotspeich. This means E-Verify was unable to verify information provided by an employee. Of those, about 800 were due to system errors, she added.  The success rate is getting better, however.

Still, for small businesses, this can mean days or weeks of lost productivity from flagged existing workers or delay in hiring new employees until problems with the data can be worked out.

Gone From Current Immigration Bill, But…

On Tuesday, May 21, the S.744 immigration bill passed in the Senate Judiciary Committee and headed to the floor of the U.S. Senate.  Its current version doesn’t make E-Verify mandatory immediately – that was nixed last week in committee. But it still contains language making the use of E-Verify mandatory within the next four years.

“I am not going to support a bill that is overly burdensome to small business,” said U.S. Senator Mary Landrieu (D-La.), chair of the Senate Committee on Small Business & Entrepreneurship during Thursday’s discussion.

“The people who employ 2, 3, 4 … people, that’s who is going to get caught up in this mess,” said U.S. Sen. James E. Risch (R-Idaho) another member of the committee.

While E-Verify may be delayed, we’ve probably not heard the last of it – either on the individual state levels or at the Federal level.

What do you think? Would mandatory E-Verify compliance create hardships for your business?

Statue of Liberty, Shutterstock

Corrected:This article has been edited to show that while a proposal to accelerate required use of the E-Verify system within 18 months of the signing of Senate immigration bill (S. 744) was struck out, the bill still contains a requirement for most employers to use the system within four years.


Shawn Hessinger Shawn Hessinger is the Executive Editor for Small Business Trends and a professional journalist with more than 20 years experience in traditional and digital media for trade publications and news sites. He is a member of the Society of Professional Journalists and has served as a beat reporter, columnist, editorial writer, bureau chief and managing editor for the Berks Mont Newspapers.

9 Reactions
  1. Wow, what does the system require? Seems to me like it would be a 1-page online form where you put in name, birthdate, SSN, maybe a driver’s license number and it tells you if they’re cleared or not. Don’t understand how this could be so hard.

  2. Shawn Hessinger

    Hi Robert,
    There are a couple of problems here. First off, the report by the Center for American Progress talks about the enrollment process which involves signing a memorandum of understanding with the federal government, reviewing contracts connected with use of the program and then an 80-page field guide which is required to use it. Then, of course, to begin the process, you need to review all your existing employees.

    The real problem comes in, I suppose, when you are the unfortunate business to wind up with several employees that receive Tentative Non-Confirmation responses. This doesn’t mean the employees in question aren’t legal to work in the U.S. It only means there is some irregularity in their records which requires straightening out before they can continue employment. If this happens to several of your existing employees during your initial enrollment or to a number of new hires in a seasonal business, you can imagine the problems faced as you need to either wait for these employees to straighten out the problem with the federal government or scramble to replace them.

  3. Shawn – the bill that passed out of the Senate Judiciary Committee last week does still include mandatory E-Verify for all employers. The Grassley amendment that failed was to speed up the requirement for all employers to participate within 18 months of the bill’s passage. Though that amendment failed, the underlying bill still requires all employers to participate in E-Verify within 4 years.



    Rep. John Barrow (D-Ga.) has introduced the Keeping the Promise of the Immigration Reform & Control Act IRCA Act. I sincerely hope that there are more solid patriotic Democrats and Republicans that are willing to go up against the core of both parties, who consider that Americans get first priority? Of course some of these political figures are lacking in pressing for stringent enforcement, beginning with the 2006 Secure Fence Act and adding another 626 miles of double layer fencing, to the original inception of only 14 miles. A DOUBLE LAYER PARALLEL FENCING LAW WAS ONE OF THE ENFORCEMENT TRIGGERS IN THE SENATE BILL 477THAT WAS DISCARDED? The bill would fulfill the border security promises, workplace verification promises, and interior enforcement promises that were never fulfilled by the 1986 amnesty bill. The bill serves as an alternative to the Gang of Eight’s amnesty bill, S.744, and is a response to public opinion that’s been evident in poll after poll that the border needs to be secured before dealing with other aspects of immigration reform.

    The Keeping the Promise of IRCA Act would:
    • Require all employers to use E-Verify within 2 years

    • Require all employers to re-verify the work authorization of temporary guest workers

    • Increase the penalty to at least 1 year in prison for committing fraud while going through the work authorization process

    • Increase penalties and fines for employers that hire illegal aliens

    • Require DHS to check suspected illegal-alien smugglers and those smuggled with terrorist watch lists

    • Increase penalties for illegal-alien smugglers

    • Bar sanctuary cities from receiving State Criminal Alien Assistance Program (SCAAP) funding

    • Hire additional ICE agents and support staff

    • Assign at least one ICE agent to each federal, state, and county prison and require ICE to detain suspected illegal aliens booked to the prison

    • Assign at least one ICE agent to each state drug and gang task force

    • Provide ICE agents and Border Patrol agents with appropriate equipment – body armor and weapons

    • Discontinue visas to countries that refuse to repatriate deported illegal aliens

    • Add an additional 10,000 beds to ICE detention centers

    • Create a pilot program for a biometric exit/entry system at land ports

    • Require equipment sharing between the Departments of Defense and Homeland Security

    • Achieve operational control of the border – defined by stopping all illegal border crossings, drugs, and weapons

    • Add additional judges, clerks, and prosecutors along the border

    Many of these complications to keep America safe, enforcement in the workplace could be eradicated if the Congress would adopt a national ID card? THEY SAY IT’S TOO EXPENSIVE? THAT’S ABSOLUTELY YOU-KNOW-WHAT! ULTIMATELY IT WOULD SAVE TRILLIONS OF DOLLARS? E-Verify for instance only detect illegal labor hired by businesses if they run the information through the data bases. Essentially it’s really the owner of the company if they are going to cross reference who is working for them. However, a biometric Identification card issued to every citizen (legal residents have a Green Card) would not only stem unauthorized labor, but could also determine if the possessor has a right to vote, plus as a further advantage it would proof who you are, when apply for credit. With three positive examples, the E-Verify have just one usage of clamping down on foreign workers? With your iris and fingerprint, the greater possibilities are obvious?

    Giving too much discretionary power to Homeland Security Secretary Janet Napolitano must not happen. She is a true puppet of White House influence and should be restrained? We just cannot trust many of this people who don’t have the best interests of the American working man, or enforcement in their agenda. In 1986 we were promised by top Democrats and Republicans to enforce the laws, instead for 27 years we have been invaded and allowed foreign nationals to settle. Washington is entirely to blame for the bedlam we have today at an unsecure border in many regions, with business just ignoring laws and when convicted receive soft lenient treatment.
    With lax enforcement it has lead illegal aliens to the idea that they have as much right to remain here, demand citizenship right. They have become so disrespectful. Now they openly demonstrate in our streets, waving foreign flags and verbally insult American law. ICE who are supposed to be the arm of the HS, have been probably ordered to stand down instead of allowing them to do their job? Same with no enforcement in “Sanctuary Cities” which is absolutely ludicrous and should not restricted in arresting any illegal alien.

    Sen. Robert Menendez (D-N.J.) said Friday that the “Gang of Eight” immigration bill doesn’t have enough votes to pass the Senate? Which gives the millions of Americans a chance to bombard both U.S. Senators and Congressman/women about this outrageous G8 reform bill and stop it in its tracks? By now we all should know the Left and its advocates are well versed in able to manipulate the press, social networks, agenda negatives as the race card and so called Politically Correct terminology to engineer much of the populace with their Socialist agenda. THE AMERICAN PEOPLE ARE GETTING SOFT AND SEEM NOT TO CARE ABOUT WHAT THE FUTURE HOLDS? We must do the same otherwise all is lost? They will be phoning, faxing and getting in the face of politicians in their office, so we must do the same by phoning Washington switchboard at toll-free t 1-888-978-3094? Every day are adding even more dollars to support not only foreigners, but the deeper depth of deadbeats who according to Washington is nearly half of the working people. Look to NumbersUSA and American Patrol for more help to learn more. Do not pass the buck to others and start doing your part now.

  5. I am a 1 person HR dept. We have one employee, because of his visa status, requires us to now use e-verify. I would prefer not to implement this because of one employee. Senior management will make a decision on Monday whether or not I must. What argument can I make other than showing your timely article?

  6. The DACA bill introduced last week in the House includes the requirements for all employers in the U.S. to use biometric identification for employees. I assume this is e-verify again. Ugh. Neither their databases nor the technology are helpful — just more money, and more exposure to legal action for small businesses.