E-Verify: Should You Be E-Terrified?

March 1, 2012

employers face a number of risks in their business, and perhaps none is more
common than the risk of employing unauthorized workers. The nature of the
workforce in the construction industry and related trades means these employers
are often targets for investigations and raids by U.S. Immigration and Customs
Enforcement (ICE) looking for businesses that employ individuals not authorized
to work in the United States. U.S. employers are required to complete the Form
I-9 for new hires to verify work eligibility, but many do not complete the form
properly, on time, or at all. Frequently, the company representatives tasked
with certifying the form are not trained to complete the certification process
properly, and any of these errors can lead to significant fines during a
government audit.

One tool employers may consider using to limit their risks in
this area is the federal government’s E-Verify system, designed to quickly
determine whether new employees are authorized to work in the United States.
The E-Verify system also offers a limited “safe harbor” to its users: if an
employee is determined by E-Verify to be authorized to work in the United
States, the employer is protected against liability if the E-Verify result was
an error and it later turns out the worker was not actually work authorized. As
explained below, this is only one factor for employers to consider when
deciding whether to register for the E-Verify system.

While use of E-Verify is generally voluntary, many employers
are required by state or local law, or status as a federal contractor, to use
the system. Additionally, Congress is currently considering legislation that,
if it becomes law, would phase in mandatory use of E-Verify for virtually all
employers nationwide. With the government’s increased scrutiny of the private
sector workforce and with
ever-expanding E-Verify obligations, it is imperative that employers become
familiar with E-Verify’s basic rules and begin to plan for administrative
changes in the event that using the system becomes mandatory for them.

What Is E-Verify?

E-Verify is the federal government’s online verification
system that uses Social Security Administration (SSA) and Department of
Homeland Security (DHS) databases to enable employers to verify that an
employee is authorized to work in the United States. There is no charge for use
of the system.

Who Is Required
to Use E-Verify?
Federal Contractors and Subcontractors (and Sub-subcontractors, etc.)

2008, President Bush issued an Executive Order requiring federal government
contractors to use E-Verify to confirm the employment eligibility of employees
who perform work on contracts within the United States. In September 2009,
regulations implementing this requirement went into effect. The regulations
require federal contractors to agree, through language inserted into their
federal contracts, to use E-Verify to confirm the employment eligibility of all
persons hired during a contract term. In addition, the rule requires federal
contractors to confirm the employment eligibility of current employees
“assigned to the federal contract” within the United States, which includes the
50 states and the District of Columbia, Guam, Puerto Rico, and the U.S. Virgin
Islands. This requirement is a dramatic departure from the E-Verify rules that
apply to all other users prohibiting use of E-Verify for any current employees.

State Laws

a third of states require use of E-Verify for some or all employers in the
state. State legislation and court decisions result in an ever-changing list,
making it difficult for employers that operate in multiple states to keep up
with their legal obligations. Employers should consult with legal counsel to
determine whether they are required to use the E-Verify
system in a particular state.

At the time of writing, the following states required use of
E-Verify for all or most employers: Arizona, Alabama, Georgia, Louisiana,
Mississippi, North Carolina, South Carolina, Tennessee, and Utah.

Florida, Indiana, Missouri, and Nebraska require public
employers and state government contractors (and most subcontractors) to use the

In Colorado and Minnesota, state government contractors must
use E-Verify. And Idaho and Virginia require
public employers to use the system.

Should My Business
Voluntarily Enroll in E-Verify?

employers have opted to voluntarily use the E-Verify system. By doing so, these
employers are not likely to be significantly affected by a future federal
mandate to use the system. These employers also avoid having to make sense of
the ever-changing patchwork of state laws requiring use of the system. But
other employers have taken a wait-and-see approach to E-Verify and, absent a
mandate to do so, have not enrolled in the system. Both approaches present
benefits and problems, and employers should carefully consider a number of
factors, including those below, and consult with legal counsel in determining
which course to take.

Benefits of Using E-Verify

  • Peace of Mind. Using E-Verify provides employers
    with a sense of certainty and confidence. You receive official notice from the
    federal government that a particular employee’s information (as provided to the
    employer) matches what is in the government’s databases. It also provides a
    limited “safe harbor” from liability in the event that the system’s results
    turn out to be inaccurate. If the E-Verify system indicates that an employee is
    authorized to work, and the employer has been given no reason to suspect that
    the employee is not authorized to work in the United States, the employer is
    protected against federal government fines that may otherwise be imposed for
    hiring or continuing to employ a worker known to lack work authorization. Note
    that this safe harbor is limited. If anything about the I-9, the documents
    presented by the employee, or other evidence (such as a complaint or tip from a
    credible source) should have indicated to the employer that the employee was
    not authorized to work in the United States, the safe harbor protection may be
    lost, and the employer could face liability.

  • Improved I-9s. Use of E-Verify will generally
    improve an employer’s I-9 practices. The information that employers put into
    the system comes directly from the Form I-9. If an I-9 is incomplete or not
    completed correctly, the employer may not be able to run the required E-Verify
    query, or the query may cause an erroneous result. Most employers who use
    E-Verify find they are forced to pay more attention to proper completion of
    their I-9 forms to avoid problems with E-Verify.

  • Fewer SSA “No-Match” Letters. Because the E-Verify system compares
    an employee’s data to the SSA’s databases, use of E-Verify will virtually
    eliminate so-called “No-Match” letters from the SSA. Any employee who would have
    triggered such a letter would be revealed at the time of hire and would either
    work with the SSA to ensure that the appropriate information is listed in the
    SSA’s database or would be discharged.

  • Preparation for Mandatory Use. Using E-Verify voluntarily may be
    beneficial to employers who expect they may soon be required to use the system
    due to federal, state, or local laws or due to contractual agreements with
    their clients. Registering for E-Verify in advance of a requirement to do so
    will give the business the opportunity to phase in use of the system. This
    allows time to resolve any difficulties in using the system and can be
    particularly effective for businesses with multiple worksites, as other
    worksites learn from the first worksite’s trials and errors. Early voluntary
    adoption of E-Verify may help avoid HR panic if/when E-Verify becomes

  • Evidence of Good Faith. Using E-Verify may demonstrate to the
    federal government that an employer has voluntarily implemented best practices
    by taking steps to ensure it employs only those who may legally accept
    employment in the United States. When facing a government investigation, proper
    use of E-Verify may serve as evidence that the employer has made good faith
    efforts to ensure compliance with workforce authorization laws and regulations.
    Any employer who has been through an ICE investigation can attest to the fact
    that “good faith” is an important determination that can lead to lower fines
    (or no fines at all).

Risks of Using E-Verify

  • Waiver of Advance Notice of
    employers sign a Memorandum of Understanding with the federal government as
    part of the E-Verify registration process, they give up their right to the
    72-hour advance notice other employers receive before an ICE inspection of
    their I-9 forms. This means employers who are registered for E-Verify must be
    prepared for an ICE inspection at any moment by ensuring that their I-9s are in
    order and that they have implemented a government investigation response plan.

  • Voluntary Exposure of I-9 Errors. As noted above, the information
    employers put into the E-Verify system comes directly from the Form I-9, which
    means the system has the potential to reveal the employer’s I-9 errors and
    issues to the federal government, which could possibly result in liability. By
    contrast, for employers who do not use E-Verify, any incorrect information on
    an I-9 form would only be revealed to the federal government if the employer
    was being audited or investigated.

  • Data Mining. I-9 data in E-Verify enables the government to
    easily mine the information for evidence of questionable practices or potential
    violations of law. The government’s review of an employer’s E-Verify entries
    could reveal multiple employees providing the same social security number,
    alien registration number, or green card document number, which could trigger
    an investigation. To give rise to an investigation, however, such situations do
    not have to arise within a single employer’s workforce. If several employers
    use E-Verify and each has an employee with the same identifying information,
    those employers could be targeted for an investigation based on the likelihood
    that at least some of the documents presented by the employees were fraudulent.
    If the government determines that the employer should have noticed that the
    documents were fraudulent, significant fines or other penalties could result.

  • System Errors. The E-Verify system is far from
    perfect. An outside evaluation of the system revealed that E-Verify often will
    wrongly confirm the employment eligibility of individuals who are not
    authorized to work in the United States. The main reason for the high error
    rate is that E-Verify cannot detect identity theft. If an employee provides an
    employer with the name, date of birth, and social security number of an
    individual who is authorized to work in this country, E-Verify is unable to
    determine that the information does not pertain to the employee presenting the
    information because E-Verify typically does not include photographs.

  • Risk of Investigation by the
    Department of Justice.
    Similar to the data mining concerns above, DHS shares information with
    the Justice Department’s Office of Special Counsel for Unfair
    Immigration-Related Employment Practices (OSC) relating to possible employer
    misuse of E-Verify.

    As of March 2010, DHS provides data, including citizenship
    status, to the OSC from queries employers run through E-Verify. The OSC may use
    the information from E-Verify to investigate possible violations of the
    Immigration and Nationality Act. These violations could include discrimination
    based on citizenship, immigration status, or national origin; document abuse by
    imposing unfair documentation requirements or practices during the I-9 process;
    and/or retaliation against certain employees.

    Even without such information-sharing, use of E-Verify gives
    rise to a greater possibility that managers and/or HR representatives will
    commit “document abuse” or other discriminatory practices in the hiring
    process. Employers using E-Verify often mistakenly believe they are required to
    see an employee’s green card if the employee claims to be a lawful permanent
    resident. Requesting that document can result in an OSC complaint and
    investigation. Similarly, many employers improperly use E-Verify for existing
    employees, which can also result in OSC action.

  • Administrative Costs. While the E-Verify system is “free,”
    in that employers do not have to pay any fees to use it, use of the system
    requires that employers invest a significant amount of administrative time and
    resources in training, system administration, running E-Verify queries, and
    working through the case resolution process for employees who are not
    immediately confirmed by the government as employment authorized. In addition,
    use of E-Verify does not relieve employers of the requirement to complete I-9
    forms for employees, which means enrolling in E-Verify actually increases,
    rather than decreases, the administrative tasks associated with hiring.

  • Loss of Employees. Finally, using the system may, in
    some cases, tell employers something they do not want to know: that the highly
    qualified person just hired and desperately needed to fill a critical role in
    your business is not authorized to work in the United States.

How Do I Register
for and Use E-Verify?

Whether you choose to or are required to enroll in the
system, the
steps are the same:

  1. Register for E-Verify. Registration to use E-Verify can be
    completed online. At the end of the registration process, the E-Verify system
    will issue a Memorandum of Understanding (MOU) to be agreed to by the employer.
    There are multiple registration configurations available; it is generally
    recommended that employers work with legal counsel to ensure that registration
    is properly completed.

  2. Complete E-Verify tutorial. Each employer representative who
    will submit verification requests must complete the online E-Verify tutorial
    before initiating any requests.

  3. Post required notices. E-Verify employers must post the
    provided DHS and DOJ notices at each hiring site so they are clearly visible to
    prospective employees. If an employer uses an online application system, it
    should provide the notices to applicants at the time they apply for positions
    by posting them online.

  4. Read and comply with the E-Verify
    The manual
    will be provided by DHS during registration. It is also available on the
    E-Verify website.

  5. Use E-Verify at registered sites
    for new hires.
    each hiring site is registered for E-Verify, it must use the system to confirm
    the employment eligibility of every new hire at that site. An employer must not
    use E-Verify for those hired before its registration date (unless those
    employees are assigned to work under a federal government contract or
    subcontract that requires their information be submitted to the E-Verify

    1. Verification must be initiated within 3 business days after the
      employee’s first day of work for pay. (The deadline is Thursday for someone
      hired on a Monday.)

    2. Verification must not be
      initiated until parts one and two of the I-9 form are complete.

      1. If a “List B” document is used
        by the employee during the I-9 process, the employer may accept it only if it
        contains a photograph.

      2. If an I-551 (Permanent
        Resident Card), I-766 (Employment Authorization Document), or U.S. Passport is
        used by the employee during the I-9 process, the employer must retain a copy.

    3. Typically, verification may only
      be completed for new hires. If the employer is not required to complete a form
      I-9 for an employee (and does not do so), it should generally not submit that
      employee’s information for verification. As noted above, this rule is different
      for federal government contractors, who are required to use E-Verify for
      employees assigned to work under certain federal government contracts. The rule
      is also different for rehires. DHS indicates that a rehire should be treated as
      a “new hire” for E-Verify purposes, even if the employer would otherwise simply
      use Section 3 of the Form I-9 to reflect the employee’s rehire date.

      1. If an employee is returning
        from certain layoffs, a strike, a lockout, or authorized leave, he is probably
        not a “new hire.” A new I-9 does not need to be completed for this employee,
        and the employee’s data should not be submitted to the E-Verify system. 
        However, to show that the employee is not being “hired,” the employer must be
        able to establish that the employer and the individual employee reasonably
        expected that the employee would resume employment at all times after the beginning
        of the layoff, strike, lockout, or authorized leave.

      2. If an employee is transferred
        from one worksite to another (but continues to work for the same employer), a
        new I-9 must not be completed, and that employee’s information must not be
        entered into E-Verify. 

        Note that this
        transfer provision must not be manipulated to avoid the use of E-Verify. If an
        individual is legitimately hired in one location to perform work there and is
        later transferred to a site registered for E-Verify (within the same legal
        entity), the employer generally must not use E-Verify for that individual.
        However, if the employer uses a California site simply to hire individuals with
        the intention of sending those individuals to work in Arizona (or another
        E-Verify state), it may face significant liability, as such activity creates
        the impression that the employer may have constructive knowledge that it is
        employing unauthorized workers.

      3. If an employee is transferred
        from one employer to another (depending on the circumstances, this may apply
        when an employee transfers from one legal entity to another?even within the
        same corporate organization), a new I-9 must be completed. If that employee has
        been transferred to a worksite that is registered for E-Verify, his information
        must be entered into the verification system.

  6. Obtain confirmation of employment
    authorization or a final non-confirmation.
    Once an employer puts an employee’s I-9 data into the
    E-Verify system, the system will (within seconds) return one of several results.
    The most common are: “Employment Authorized,” “SSA (or DHS) Tentative
    Non-Confirmation,” or “DHS Verification in Process.”

    1. Employment Authorized: This indicates the employee is
      authorized to work. The employer must close the query and then record the verification
      number generated by E-Verify on the employee’s I-9 form or print out the
      verification page and retain it with the form I-9. No further action is

    2. SSA Tentative Non-Confirmation: This indicates there is an
      information mismatch with the SSA databases. The following instructions must be
      followed by an employer for SSA and DHS Tentative Non-Confirmations (TNCs):

      1. The employer must inform the employee of the TNC and must print the TNC
        notice (generated by E-Verify) and review it with the employee.

      2. The employee has the option to
        contest or not to contest the TNC. The employee must indicate on the notice
        whether he or she will contest the TNC. The employer and the employee must sign
        the TNC notice.

      3. If the employee chooses not to
        contest the TNC, it is considered a final non-confirmation of employment
        authorization, and the individual’s employment should be terminated.

      4. If the employee chooses to
        contest the TNC, the employer must use the E-Verify system to generate a
        referral letter, which will provide instructions to the employee for contesting
        the TNC. The employee must contact the appropriate agency (SSA or DHS) within 8
        government working days to resolve the discrepancy.

      5. While attempting to resolve the
        discrepancy, the employee may continue to work. The employee must not face
        adverse employment action based on a TNC.

      6. SSA or DHS will automatically
        update the E-Verify system once the discrepancy is resolved or once it is
        determined that the discrepancy is not resolvable. At that point, the status of
        the verification will change to “Employment Authorized,” “Final
        Non-Confirmation,” or “Review and Update Employee Data then Resubmit.”

        1. Employment Authorized:  the employer should resolve the query and record the
          verification number generated by E-Verify on the employee’s I-9 form or print
          the case verification sheet and retain it with the I-9. No further action is

        2. Final Non-Confirmation: unless the
          employer believes the final non-confirmation to be in error, the employer
          should terminate the employee’s employment. Employers must keep records to
          indicate reasons for termination. (Note that if the employer continues to
          employ the individual, a rebuttable presumption is created that the employer is
          knowingly employing an unauthorized worker, which can lead to significant

        3. Review and Update Employee Data then Resubmit: the data originally put
          into the system may not have been correct. Review the social security number
          and other information carefully and resubmit the E-Verify inquiry.

    3. DHS Verification in Process: This indicates that DHS is working
      to confirm employment authorization in its databases. In general, DHS will make
      a determination within 24 hours, and the status of the verification will change
      to either “Employment Authorized” or “DHS Tentative Non-Confirmation.”
      Employers should follow the instructions above once the status changes.

  7. Discharge employees with final
    non-confirmations unless the final non-confirmations are believed to be in
    error (see above).

  8. Record verification numbers on employees’ I-9 forms as appropriate or print and
    retain case verification sheets.

  9. I-9
    Compliance: remember that compliance with existing I-9 regulations is the first
    step toward compliance with both federal and state E-Verify requirements.


E-Verify process, while provided by the U.S. government at no charge, is far
from free. The system requires employers to understand and apply complex rules
governing employment eligibility. While many employers are required to use
E-Verify, others currently have the choice of whether to use it. The system can
be a useful tool, but it is best implemented as part of a comprehensive
compliance program. These programs may include I-9 training, voluntary I-9
audits, implementation of software programs, use of E-Verify, and policies
covering immigration compliance, which together will go a long way to
minimizing an employer’s legal liability for violations of immigration laws.

In the near future, use of E-Verify may be required for most
or all U.S. employers. This likelihood, when combined with the recent focus on
prosecution of employers for immigration-related violations, leads to the
conclusion that employers should implement strong compliance programs and begin
planning for the eventual use of E-Verify.