Businesses Don't Comply with E-Verify Mandates

E-Verify is an electronic eligibility for employment verification system run by the federal government. It is supposed to check the identity information of new hires against government databases to see if they are legally eligible to work. The government created E-Verify to deny employment to illegal immigrants as a means of turning off the wage magnet that attracts so many here in the first place, but it has serious and unsolvable problems. Four states have mandated E-Verify for all new hires: Arizona, Alabama, South Carolina, and Mississippi. Their experiences with a state-level E-Verify mandate have produced several lessons of how the program would likely function if Congress ever mandated it nationwide.

The first lesson is that E-Verify data is insufficiently detailed to gauge the program’s effectiveness. As I recently wrote about South Carolina, there were several quarters from 2012 through 2014 where there were more E-Verify checks than there were new hires (Table 1). Under the smooth and lawful operation of E-Verify, as its architects intended, that is not supposed to happen by the wide margins reported below except in communities where the number of illegal immigrants is grossly disproportionate to the size of the population (not the case here). Rather than running a single E-Verify check for each new hire, employers ran more checks than were required in South Carolina. There are innocent explanations for this, such as simple corrections to human error, but also potentially destructive explanations like pre-screening of applicants by employers. Knowing the number of E-Verify checks run per each individual new hire would help estimate accurate compliance rates. Regardless, the number of E-Verify checks is greater than the number of hires. This means we cannot know how many new hires are actually run through the system in states where 100 percent of them are supposed to be. That makes accurately measuring compliance rates impossible.

Table 1

E-Verify Checks as a Percent of All New Hires

Sources: Department of Homeland Security and Longitudinal Employer-Household Dynamics Survey

Note: NM means “no E-Verify mandate.”

The second lesson is that compliance rates are likely very low. Figure 1 shows the E-Verify compliance rates as the percent of new hires run through E-Verify in each quarter in states where the program is mandated. As mentioned before, these compliance rates include every E-Verify check by participating employers in these states and many are for the same new hire, so they all look higher than they are on the ground. According to the rosy data presented above, that is likely impossible as only about 61 percent of all new hires who were supposed to be run through E-Verify in these states in the second quarter of 2017 were actually checked (Figure 1). That is a low level of compliance. 

Figure 1

E-Verify Compliance Rates in States with Mandated E-Verify

Sources: Department of Homeland Security and Longitudinal Employer-Household Dynamics Survey

The third lesson is that laws do not enforce themselves. It is easy for any level of government to pass a law declaring that E-Verify is now mandatory for all new hires. Enforcing that labor market regulation is a different challenge that requires workplace visits, inspections, and audits. Other than South Carolina, which has a remote audit program run by the state Department of Labor, Licensing, and Regulation, there is no enforcement of E-Verify by states that mandate its use for all new hires. To make matters worse, South Carolina’s audits might make the E-Verify data less reliable as employers check the same employees multiple times just to make sure they pass remote audits. Worst of all, we do not even know how often E-Verify succeeds in denying employment to illegal immigrants. South Carolina’s audits only measure if E-Verify is used, not whether it succeeds in its goal.

E-Verify is an expensive and intrusive labor market regulation that mostly affects American citizens, as every person needs to be run through it in order for it to have a hope of working. Members of Congress introduce bills to mandate it nationwide nearly every session. It is time that policymakers in Washington, DC look at the states where E-Verify is mandatory to judge how it works in reality rather than relying on Pollyanish odes about its intended effects. The low E-Verify compliance rates in states where the program is mandated point to serious problems that its cheerleaders must directly address.