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30–282 PDF 2006

IMMIGRANT EMPLOYMENT VERIFICATION AND

SMALL BUSINESS

HEARING

BEFORE THE

SUBCOMMITTEE ON WORKFORCE, EMPOWERMENT 

& GOVERNMENT PROGRAMS

OF THE

COMMITTEE ON SMALL BUSINESS 

HOUSE OF REPRESENTATIVES

ONE HUNDRED NINTH CONGRESS

SECOND SESSION

WASHINGTON, DC, JUNE 27, 2006

Serial No. 109–58

Printed for the use of the Committee on Small Business

(

Available via the World Wide Web: http://www.access.gpo.gov/congress/house 

COMMITTEE ON SMALL BUSINESS 

DONALD A. MANZULLO, Illinois, Chairman 

ROSCOE BARTLETT, Maryland, Vice 

Chairman 

SUE KELLY, New York 

STEVE CHABOT, Ohio 

SAM GRAVES, Missouri 

TODD AKIN, Missouri 

BILL SHUSTER, Pennsylvania 

MARILYN MUSGRAVE, Colorado 

JEB BRADLEY, New Hampshire 

STEVE KING, Iowa 

THADDEUS MCCOTTER, Michigan 

RIC KELLER, Florida 

TED POE, Texas 

MICHAEL SODREL, Indiana 

JEFF FORTENBERRY, Nebraska 

MICHAEL FITZPATRICK, Pennsylvania 

LYNN WESTMORELAND, Georgia 

LOUIE GOHMERT, Texas 

NYDIA VELA ́ ZQUEZ, New York 

JUANITA MILLENDER-MCDONALD, 

California 

TOM UDALL, New Mexico 

DANIEL LIPINSKI, Illinois 

ENI FALEOMAVAEGA, American Samoa 

DONNA CHRISTENSEN, Virgin Islands 

DANNY DAVIS, Illinois 

ED CASE, Hawaii 

MADELEINE BORDALLO, Guam 

RAU ́ L GRIJALVA, Arizona 

MICHAEL MICHAUD, Maine 

LINDA SA ́ NCHEZ, California 

JOHN BARROW, Georgia 

MELISSA BEAN, Illinois 

GWEN MOORE, Wisconsin

J. MATTHEW SZYMANSKI, Chief of Staff 

PHIL ESKELAND, Deputy Chief of Staff/Policy Director 

MICHAEL DAY, Minority Staff Director

SUBCOMMITTEE ON WORKFORCE, EMPOWERMENT AND GOVERNMENT 

PROGRAMS 

MARILYN MUSGRAVE, Colorado Chairman 

ROSCOE BARTLETT, Maryland 

BILL SHUSTER, Pennsylvania 

MICHAEL FITZPATRICK, Pennsylvania 

LYNN WESTMORELAND, Georgia 

THADDEUS MCCOTTER, Michigan 

JEB BRADLEY, New Hampshire 

DANIEL LIPINSKI, Illinois 

TOM UDALL, New Mexico 

DANNY DAVIS, Illinois 

RAU ́ L GRIJALVA, Arizona 

MELISSA BEAN, Illinois 

GWEN MOORE, Wisconsin

JOE HARTZ, Professional Staff

(II) 

C O N T E N T S 

WITNESSES

Page 

Calvert, The Honorable Ken (CA-44), Congressman, U.S. House of Representatives ..................................................................................................................... 4

Divine, Mr. Robert, Acting Deputy Director, U.S. Citizenship and Immigration 

Services, U.S. Department of Homeland Security ............................................. 6

Shandley, Mr. Jack, Senior Vice President, Human Resources, Swift & Company ....................................................................................................................... 17

Amador, Mr. Angelo, Director for Immigration Policy, U.S. Chamber of Commerce, Essential Worker Immigration Coalition ............................................... 19

Krikorian, Mr. Mark, Executive Director, Center for Immigration Studies ....... 22

Malara, Mr. Toby, Government Affairs Counsel, American Staffing Association ........................................................................................................................ 24

Lake, Mr. Monte, Partner, McGuiness, Norris & Williams, LLP ........................ 26

APPENDIX

Opening statements: 

Musgrave, Hon. Marilyn .................................................................................. 33

Velazquez, Hon. Nydia (Ex Officio) ................................................................. 37

Prepared statements: 

Calvert, The Honorable Ken (CA-44), Congressman, U.S. House of Representatives ................................................................................................... 39

Divine, Mr. Robert, Acting Deputy Director, U.S. Citizenship and Immigration Services, U.S. Department of Homeland Security ........................ 42

Shandley, Mr. Jack, Senior Vice President, Human Resources, Swift & 

Company ........................................................................................................ 49

Amador, Mr. Angelo, Director for Immigration Policy, U.S. Chamber of 

Commerce, Essential Worker Immigration Coalition ................................ 53

Krikorian, Mr. Mark, Executive Director, Center for Immigration Studies 65

Malara, Mr. Toby, Government Affairs Counsel, American Staffing Association ............................................................................................................ 73

Lake, Mr. Monte, Partner, McGuiness, Norris & Williams, LLP ................. 80

(III) 

(1)

IMMIGRANT EMPLOYMENT VERIFICATION 

AND SMALL BUSINESS 

TUESDAY, JUNE 27, 2006

HOUSE OF REPRESENTATIVES

SUBCOMMITTEE ON WORKFORCE, EMPOWERMENT AND

GOVERNMENT PROGRAMS

COMMITTEE ON SMALL BUSINESS

Washington, DC 

The Subcommittee met, pursuant to call, at 2:30 p.m., in Room 

2360 Rayburn House Office Building, Hon. Marilyn Musgrave 

[Chairman of the Subcommittee] presiding. 

Present: Representatives Musgrave, Lipinski, Udall, Davis. 

Also Present: Representative Akin. 

Chairman MUSGRAVE. I think I will go ahead and call the meeting to order, out of respect to Congressman Calvert’s time, and the 

witnesses. Mr. Lipinski is on his way, so he will join us shortly. 

I call this meeting to order. I thank you all for being here, especially those of you that have traveled great distances to provide the 

Committee with testimony. 

While I’ve been traveling around my district, and I hear this 

from most Congressmen, the problem of illegal immigration is constantly one of the top concerns. Individuals, community leaders, 

law enforcement leaders, healthcare providers, educators, all recognize the effects that illegal immigration has on our country, and 

they talk to us about passing laws to promote America’s tradition 

of waffle immigration. 

The increasing number of immigrants crossing our borders illegally is a burden to our economy and a threat to our national security. The official census data predicts there are 8.7 million individuals living here illegally. However, some unofficial estimates predicted closer to 12 million. There are also approximately 500,000 

illegal aliens that enter the United States every year. 

Because this is a pressing issue, the House of Representatives 

passed H.R. 4437, the Border Protection, Anti-Terrorism and Illegal Immigration Control Act, prior to the recess of Congress in December of ‘05. In May of 2006, the Senate also passed a significant 

immigration reform bill, S.2611, the Comprehensive Immigration 

Reform Act of 2006. Both bills make numerous significant changes 

to our immigration law and border security efforts. 

H.R. 4437 also aims to crack down on alien smugglers and the 

alien gang members who terrorize our communities. In the addition, the bill would direct the Secretary of Homeland Security to 

devise a plan to provide systematic surveillance coverage, and 

2

within one year introduce a plan for border security, including risk 

assessment of ports of entry. This plan would include a description 

of border security roles of federal, state, regional, local and tribal 

authorities in ways to ensure such security efforts would not impede commerce. 

The focus of the hearing today, however, will be on the expansion 

of the Basic Pilot program for employee verification that is contained in both bills. The Immigration Reform and Control Act of 

1986 made it unlawful for employers to knowingly hire or employ 

aliens not eligible to work, and required employers to check the 

identity and work eligibility documents of new employees. 

This Act was designed to end the ‘‘job-magnet’’ that draws the 

vast majority of illegal aliens to the United States. Unfortunately, 

the easy availability of counterfeit documents has made a mockery 

of that legislation that was passed in 1986. Fake documents are 

produced by the millions, and they can be bought very cheaply. 

Through the Illegal Immigration Reform and Immigrant Responsibility Act of 1996, Congress responded to the deficiencies of the 

1986 Act by establishing three employment eligibility verification 

pilot programs for volunteer employers in selected areas. This is 

known as the Basic Pilot program. 

Since November of 1997, the Social Security Administration and 

the Systemic Alien Verification for Entitlements program have 

been conducting the Basic Pilot program in the states of California, 

Florida, Illinois, Nebraska, New York and Texas. The program was 

made available to all employers in all states starting in December 

of 2004. The Basic Pilot involves verification checks of the SSA and 

the now Department of Homeland Security databases of all newlyhired employees, regardless of citizenship. 

The Basic Pilot is currently a voluntary program, and is free to 

employers who volunteer to participate. It is now used by over 

4,000 employers and at least 15,000 work sites nationwide. 

The recently passed House and Senate legislation both change 

the name of the Basic Pilot program to the Employment Eligibility 

Verification System, and would require all businesses to use it 

when making new hires. The legislation also increases fines for 

companies failing to comply with the new law. 

While the House bill prescribes lower penalties for small and medium-sized businesses, the Senate bill does not, nor does the Senate bill have an exemption or fines for a ‘‘good faith effort’’ to comply. 

Our purpose here today is not to compare and contrast the merits of either bill. All too often when these gigantic reform-minded 

pieces of legislation are formulated, small businesses are just an 

after thought. While the House did take small and medium-sized 

businesses into consideration when they constructed the legislation, 

there are many questions we need to ask to ensure that this bill, 

should it become law, will not unjustly overburden America’s small 

businesses. 

We need to answer questions such as, will making participation 

mandatory increase the paperwork burden for small businesses? 

How accurate will it be, and how can we ensure the number of 

false positives and negatives will be extremely minimal? How long 

will it take to certify someone, and will the Department of HomeVerDate 0ct 09 2002 23:22 Nov 20, 2006 Jkt 000000 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 G:\HEARINGS\30282.TXT MIKE
3

land Security be ready for it if it happens, and what do we need 

to do in Congress to make sure they are? 

I’m eager to hear today’s testimony, and I would like to sincerely 

thank Representative Calvert from California for coming to testify 

before the Committee today. I know you are very busy, and when 

you need to leave we will appreciate your time that you’ve spent 

with us today. 

Now, I’d like to recognize the Ranking Member, Mr. Lipinski, for 

an opening statement. 

[Chairman Musgrave’s opening statement may be found in the 

appendix.] 

Mr. LIPINSKI. Thank you, Madam Chairman. 

There’s no question that immigration is a serious issue for Americans, it has a significant impact on our economy. It’s estimated 

there are at least 7.2 million people who are working illegal in the 

U.S., which is about 5 percent of the U.S. labor force. 

While this has been an issue for quite some time, the House recently passed a bill to address this problem. The bottom line is 

this, our borders simply are not as secure as they should be. More 

than 500,000 individuals enter our country illegally every year. We 

need to know who is coming into our country, and prevent unauthorized people from entering. 

I believe strongly that if a nation does not control its borders, it 

is not fully protected. Border security legislation is absolutely necessary. 

But, before I go any further, I want to make it clear that I believe that most who come into our country illegally, and are here 

working illegally, are in this country illegally, are here to work and 

to make a better life for themselves and for their families. But, although this is the case, this does not mean that we can just ignore 

the situation. For the sake of our national and economic security, 

we can’t allow the current situation to continue. 

H.R. 4437, the Border Protection, Anti-Terrorism and Illegal Immigration Control Act of 2006 attempts to address immigration 

problems by enhancing border security, or requiring employers to 

verify the employment eligibility of its workers. It is a critical step, 

but it’s important that we carefully examine all proposals and try 

to mitigate any unintended consequences for small businesses. 

Under Title VII of H.R. 4437, a new employee verification system 

will be created that will make sure that employees are legal and 

have proper documentation to work in the United States. 

During roundtables that I have had with small business owners 

in my district, there’s one clear message that they keep giving me 

regarding employee verification. It’s this, whatever you do, make 

sure that when I follow the law my competitors are also following 

the law, so I can compete on a level playing field. 

This new system is designed to accomplish this goal, but as we 

consider the impact of new regulations on our entrepreneurs, we 

must remember that the cost of regulation compliance is already 60 

percent higher for small businesses than their big business counterparts. We need to make sure that any new regulations do not 

add an unnecessary burden for small businesses. Some additional 

burden will, unfortunately, be necessary. We need to do all we can 

to minimize it. 

4

In addition, small business owners need to know and understand 

what the rules are regarding their work force. If small business 

owners are not provided with a full understanding of the 

verification system, it can lead to significant confusion. Well-intentioned entrepreneurs may inadvertently fail to comply, resulting in 

fines and possibly criminal liability. We must do all we can so that 

those who are breaking the law know it, and know that they will 

be punished. 

Small businesses are the most important engines of our economy. 

We must always be extremely careful when establishing new regulations. We also have responsibility to secure and protect our borders, and make sure that Americans are given the opportunity to 

work. 

I look forward to hearing the testimony from our witnesses today 

about how we can best meet all of these goals. 

Thank you. 

Chairman MUSGRAVE. Thank you, Mr. Lipinski, and now we will 

hear from our first panel, starting out with Congressman Calvert, 

and then we’ll hear from Robert Divine. Thank you. 

STATEMENT OF THE HONORABLE KEN CALVERT (CA-44), U.S. 

HOUSE OF REPRESENTATIVES 

Mr. CALVERT. Thank you, Chairman Musgrave, Ranking Member 

Lipinski, and certainly Members of the Committee. Thank you for 

inviting me to speak today on employment verification. 

I’m very pleased that the Small Business Committee is taking a 

look at this program, because I strongly believe that businesses 

need to use the program in order to retain and regain confidence 

in their work force. 

Before coming to Congress, I was a small business restaurant 

owner in California. Like all employers, I required my employees 

to present documents authenticating their identify and employment 

eligibility as far of the I-9 Immigration policy. There’s a form process that you are aware of. 

Since I’ve never been an expert on documents, I had no way of 

knowing whether the documents presented were authentic or 

fraudulent, so when I was elected to Congress I wrote legislation 

to create the Basic Pilot program with the intention of giving employers a reliable tool to verify their employees’ eligibility to work. 

In the 109th Congress, I introduced H.R. 19, which would make 

the Basic Pilot program mandatory, and phase in over time by the 

size of the employer. The bill became the backbone of Title VII of 

H.R. 4437, and Title III of the Senate Bill, S.2611. 

For a decade, the Basic Pilot program has been tested, improved 

and expanded. The program began as a telephone system, then became a modem-based system, with software installed on each user’s 

computers. Today, the program is an internet-based, and as easy 

to use as buying a book off amazon.com. I can attest how easy the 

program is, since I’m one of the first members of Congress to sign 

up and use the program in my Congressional Office. 

I appreciate the opportunity to clear up some misconceptions 

about the program, and highlight several key facts. 

The Basic Pilot program, and its possible successor, the Employment Eligibility Verification System, as outlined in both the House 

5

and Senate passed versions of the Immigration Reform bills, works 

to ensure a legal work force by verifying information used in the 

I-9 form. This program does not target people, but rather confirms 

the voracity of the information on documents people present. It is 

important to remember that the program does not discriminate 

against people, but instead gives employers confidence that the 

work force is legal and free to work. 

It’s been noted that the Basic Pilot cannot detect identity theft, 

yet I believe it can if the new program is used properly. Immigration Customs enforcements must be able to monitor the program’s 

data to look for suspicious patterns, just as credit card companies 

can flag suspicious activity, the Basic Pilot program can be used to 

detect possible identity theft by flagging a name and a Social Security number that is being used over, and over, and over again. 

Concerns over identity theft have led many to conclude that we 

need a national identification card. I disagree. By monitoring the 

data and flagging suspicious activity, a mandatory program can 

combat identity theft without a new ID card. It is true that no program will ever be perfect, but the concerns about identity theft and 

program or document fraud can be adequately addressed through 

a thorough and thoughtful mandatory system, as reflected in the 

House passed Immigration Reform Bill. 

Some of the individuals testifying today may question the accuracy, ease of use, speed, or cost of the program, and may ask 

whether the program can be expanded for all employers quickly 

enough. According to the 2005 GAO Report, the U.S. Citizenship 

and Immigration Services has reduced their data entry backlog 

from nine months to approximately ten to 12 days, significantly improving the speed and accuracy of the program. 

Additional reports found that 98.5 percent of all queries receive 

an immediate response, and the program is 98.6 percent accurate. 

Striving for 100 percent accuracy is necessary, but we should not 

make the perfect the enemy of the good. The accuracy rate is already very good, and it will improve as the system is implemented. 

Inaccurate results indicate there is a discrepancy between the information presented by the employees and the data on record. 

Notification of a discrepancy is an opportunity for the employee 

to correct the record. Adequate time is mandated to allow an employee to clear up discrepancies. No one is dismissed because of an 

initial negative. 

I might add here that all employees with mismatched data will 

receive a chance to correct the record, because employers cannot 

use the system to pre-screen employees. They can only use the program after they hire a new employee, which is another safeguard 

against discrimination. If an employee is wrongfully terminated, 

currently existing remedies remain available to them. 

Think of this as a similar to use of a credit report, which are 

vital to our financial system, yet may contain errors. We do not demand 100 percent perfection in the credit report system in order 

to find it useful, because we understand that credit reports are viable tools and that errors can be corrected. 

The Basic Pilot program is a good tool, and the accuracy of the 

information will continue to improve as individuals have a chance 

to correct the record. The Basic Pilot program has experienced inVerDate 0ct 09 2002 23:22 Nov 20, 2006 Jkt 000000 PO 00000 Frm 00009 Fmt 6633 Sfmt 6633 G:\HEARINGS\30282.TXT MIKE
6

credible success since it was launched ten years ago, and that success is even more incredible when you consider that Congress has 

not appropriated funds specifically for the Basic Pilot program, instead requiring the Department of Homeland Security to use funds 

from its discretionary accounts. 

Yet, the lack of funding is changing. For the first time, the House appropriated $114 million for FY07 to expand and improve the 

Basic Pilot program to ensure it is ready to handle a huge spike 

in demand. There are right now about 10,000 employers using the 

program today, up from 2,300 in 2004, and more employers are 

signing up each and every day. 

Based on the program’s superior performance at this point, it is 

clear that the program will be adequately prepared to quickly and 

accurately handle queries from every employer in this Nation. 

I believe the U.S. Government needs to better enforce their immigration laws, including employer sanctions and work site enforcement. If we are going to hold employers responsible for following the law, we must give them a tool which they can use in 

good faith. The Basic Pilot program is a tool that all employers 

should use. 

A vital component of immigration reform is to make sure everyone who works in the United States is doing so legally, by turning 

off the ‘‘job-magnet.’’ Making the Basic Pilot program mandatory is 

an essential component of our national policy that de-incentivizes 

illegal employment in the United States, and without it all other 

efforts to enforce immigration laws, in my opinion, will fall short. 

Thank you for allowing me an opportunity to speak with you 

today, and I’ll be happy to answer any questions when the time 

comes. 

Chairman MUSGRAVE. Congressman Calvert, would you be able 

to answer questions after Mr. Divine speaks? Can you stay that 

long? 

Mr. CALVERT. Sure. 

Chairman MUSGRAVE. Okay, thank you so much. 

[Congressman Calvert’s testimony may be found in the appendix.] 

Chairman MUSGRAVE. Now we’ll hear from Mr. Robert Divine, 

Acting Deputy Director of U.S. Citizenship and Immigration Services. Thank you for appearing before the Committee. 

STATEMENT OF ROBERT DIVINE, U.S. CITIZENSHIP AND IMMIGRATION SERVICES, U.S. DEPARTMENT OF HOMELAND SECURITY 

Mr. DIVINE. Thank you, Madam Chairman. 

Chairman, Ranking Member Lipinski, Members of the Subcommittee, my name is Robert Divine. I’m Acting Deputy Director 

of U.S. Citizenship and Immigration Services. I’m honored to have 

this opportunity to talk with the Subcommittee about the basic 

Employment Verification Pilot, which we call the Basic Pilot, which 

confirms information for participating employers concerning the 

work eligibility of their newly-hired workers. 

I’ll also describe the agency’s plans to improve and expand the 

Basic Pilot, and to implement a nationwide mandatory Employment Eligibility Verification System. 

7

I appreciate your interest in the program, I appreciate Congressman Calvert’s involvement in creating it. 

Chairman MUSGRAVE. Could you move the mic just a little closer, 

we are having a little bit of a hard time hearing. 

Mr. DIVINE. There we go. 

Chairman MUSGRAVE. Okay, thank you. 

Mr. DIVINE. Let me put it in my mouth and it will work. 

And, we look forward to seeing the participation in the program 

of every one of the Committee and Subcommittee’s Members’ offices. 

The Employment Verification System, as we conceive it, is a critical step in improving work site enforcement, and it directly supports the President’s goal of achieving comprehensive immigration 

reform. 

In his speech to the U.S. Chamber on June 1, President Bush endorse the Basic Pilot as a quick and practical way to verify Social 

Security numbers that gives employers confidence that their workers are legal, improve the accuracy of wage and tax reporting, and 

helps ensure that those who obey our laws are not under cut by 

illegal workers. 

Today, an illegal immigrant with a fake ID and a Social Security 

card can find work almost anywhere in the country without difficulty. It is the prospect of jobs that leads people to risk their 

lives, crossing hundreds of miles of desert, or to spend years in the 

shadows, afraid to call the authorities when victimized by criminals 

or exploited by their boss. That is why the Administration has proposed a comprehensive overhaul of the Employment Verification 

System and Employers Sanctions Program as part of the President’s call for a comprehensive immigration reform. 

Quick history, Congress established the Basic Pilot as part of the 

IIRIRA law in 1996, creating a program for verifying employment 

eligibility, at no charge to the employer, of both U.S. citizens and 

noncitizens. The Basic Pilot program began in 1997 as a voluntary 

program for employers in the five states with the largest immigrant populations, and in 1999, Nebraska was added. It was twice 

extended, most recently in 2003, valid and effective until 2008, and 

at that time it was also made available to participating employers 

in all 50 states, not just those five original. A small percentage of 

employers participate, but the program is growing by about 200 

employers a month, as Congressman Calvert stated, about 9,300 

Memorandums of Agreement with employers who are verifying 

over a million new hires per year at more than 34,000 work sites. 

Madam Chairman, I understand you have said, that ‘‘Small businesses are the backbone of Colorado’s economy,’’ and, of course, 

that’s true for the Nation as well. Most of our participating employers have 500 or fewer employees. In Colorado, there are 207 participating employers, including the U.S. Olympic Committee, Alsco 

Laundry Service and the New World Restaurant Group, as examples. Ranking Member Lipinski, in Illinois, there are 407 participating employers, including Staffmark Employment Agency, 

Judson College, and St. Joseph’s Medical Center, and we welcome 

your support in reaching out to enroll even more employers into 

the program. 

8

Now, here’s how the program works. After hiring a new employee, an employer submits a query including the employee’s 

name, date of birth, Social Security account number (SSN) and 

whether the person claims to be a U.S. citizen or a noncitizen, and 

if a noncitizen they provide either the Alien number of some other 

DHS number to give a tie in to a system about their status. And, 

through the system the employer receives an initial verification 

within seconds, electronically. The system first electronically sends 

the information to the Social Security Administration’s Numident 

database, and if the new hire claims to a citizen, then that’s the 

end of it. It stops with the Social Security Administration’s confirmation in the database. 

If the new-hires SSN, name and date of birth to the Social Security Administration (SSA) to match that data, and SSA will confirm 

citizenship status (if the employee claimed to be a U.S. citizen) 

based on data in the Social Security Administration’s Numident 

database. If the Social Security database cannot immediately verify 

electronically, then that system sends an SSA tentative non-confirmation to the employer, and then the employer must notify the 

employee of the tentative non-confirmation and give the employee 

an opportunity to contest that filing, a very important part of the 

procedure as the Congressman has mentioned. 

In the case of a noncitizen, after the Social Security Administration has—after its system has verified, and only if it verifies, then 

the system will go forward to the DHA Basic Pilot database, and 

seek to verify electronically. And, if the system cannot electronically verify the status of the noncitizen as lawfully able to work in 

the United States, then an Immigration Status Verifier, a human 

being in U.S. Citizenship and Immigration Services, will personally 

research the case, usually providing a response within one business 

day, I think in 90 percent of the cases that’s the turnaround time, 

either verifying work authorization or issuing a DHS tentative nonconfirmation. If the employer receives a tentative non-confirmation, 

the employer must notify the employee of that finding and give the 

employee an opportunity to contest that finding. 

When USCIS receives a response to that, USCIS normally resolves the case within three business days, issuing either a 

verification or a DHS final non-confirmation. So, whether it’s to the 

Social Security Administration initially or to USCIS for a noncitizen who verified with Social Security if there is a non-confirmation, if the system can’t confirm then the employee is given a 

chance to contest and cure the problem, and correct the database. 

As you know, the House and the Senate have both passed significant immigration legislation this session, including an agreement 

on the idea of a mandatory electronic Employment Eligibility 

Verification Program for all 7 million U.S. employers. Although the 

proposals differ in some significant ways, both bills would require 

an expansion of the electronic Employer Verification System Program that is, basically, an expansion of the Basic Pilot to all employers. 

Therefore, USCIS is already planning for the expansion of the 

program, planning. The President’s Fiscal Year ‘07 budget requests 

$110 million to expand and improve the Basic Pilot, so that it can 

9

be used for all employers, including components for outreach, systems monitoring and compliance. 

So, let me briefly outline what those improvements and expansions that we are planning. First, ensuring that all employment-authorized aliens have secure biometric cards with an enumerator, 

and phasing out the production of locally-produced cards that are 

too vulnerable to counterfeiting, and that are not tied reliably to 

the verification system. The idea is to reduce manual secondary 

checks, which slow down everybody in the system and cost the system money and time. 

Second, we are working on tapping into our card databases for 

verification. That means, a worker who has a card, a permanent 

resident card, or an employment card, would present that card for 

verification and would be required to do so, and when doing so 

would be—that card and its data would be validated against the 

database from which the card was made. In other words, it’s a oneto-one match directly against the information that it arose from, 

and it should be instantaneous. That would again reduce the number of manual secondary checks. 

The third thing is to add more DHS information about the status 

of temporary workers in the Basic Pilot Verification System. Right 

now, our system is not pointed to every—to a real-time database 

about entries that has recently become available, so we need to 

point to that system and get the information. 

We also need to include information about people who have 

changed or extended their status within the United States, and 

when we do that we will reduce the number of manual secondary 

checks that have to be performed. More people will get an instantaneous response. 

[Mr. Divine’s testimony may be found in the appendix.] 

Chairman MUSGRAVE. Okay, I think I’ll go ahead and open it up 

for questions. We want to be very respectful of the time here. 

Congressman Calvert, in H.R. 19 there was a tiered implementation program that I thought was very reasonable for small businesses, and it started out with bigger companies the first year, 

clear down to seven years for the smallest of the small businesses. 

Do you have any insight as to why that was not included in the 

final product? It just seemed to be so reasonable and something 

that people could appreciate your concern for small businesses and 

the burden. 

Mr. CALVERT. As I mentioned, as an employer myself and recognizing the fact that we have 12 million—up to 12 million people 

working in the United States today, that you can’t just immediately 

cut that labor off without having some negative effect in the economy. 

And so, we tried to work out a legislative fix where we would 

phase in this program over a period of time, starting with 10,000 

employees and more, the Wal-Marts of the world, and 5,000 the 

next year, 2,500 the year after that, so forth and so on, until we 

got to zero over seven years time. That would give enough time for 

the agencies to gear up for a program of some significance. 

Fight now, as was mentioned, we have approximately 10,000 employers on the program, that would go to millions when we get to 

this program as a mandatory system. 

10

Chairman Sensebrenner wanted to move this program sooner 

rather than later. He has a two-year phase in for all employers in 

the United States in the final version that came out of the Judiciary Committee and was reported off the floor. The Senate, I’m not 

quite sure of how they, you know, will phase that in. That would 

have to be negotiated in the conference report, in fact, there is a 

conference report. 

But, I think that, quite frankly, realistically, I think that a phase 

in would not be a bad idea, to make sure we give employers enough 

time in order to do the right thing. I’m not out to punish employers. You know, as an employer, we run into government agencies 

often, and we want to make sure that we use a carrot approach 

rather than a stick approach, and get employers to do the right 

thing, which I think most employers want to do, and not to get into 

a punitive mode as far as how we get people to initiate this program. 

Chairman MUSGRAVE. Thank you very much. 

Mr. Lipinski? 

Mr. LIPINSKI. Thank you, Madam Chairman. 

I want to first thank Representative Calvert for his expert testimony here, not just as a Member of Congress, but also your experience as a small business owner. We very much appreciate that. 

I want to focus my questions primarily on Mr. Divine. Representative Calvert, you can jump in here, if you would like. A couple of 

things that I’m wondering about. It seems that we are really going 

to have to expand from this pilot program if we are going to be covering everybody, 407 employers in Illinois just seems like a very 

small number. 

You were saying the requests for FY07 from the Administration 

is $110 million to expand the pilot program. How much is going to 

be needed, what kind of appropriations are we going to need to be 

able to make this a system that can cover everybody? 

Mr. DIVINE. Well, we are already making the systems changes in 

terms of the technology, so that, as I said, the employer gets an immediate answer the first time almost every single time, and we reduce the delay for the employer, the cost for the agency to try to 

run that down. 

The rest of it includes outreach to employers who need to participate, assistance, training, and also monitoring and compliance, because as the Congressman mentioned it’s not foolproof, and we 

have to have some compliance capability to monitor trends and detect patterns of abuse. 

Mr. LIPINSKI. Do you have any idea how much this is going to 

cost? We certainly have, up until this point, been cutting back on 

the amount of money towards, you know, any type of enforcement. 

Now, turning around to what really needs to be a really huge investment it would seem, to be able to make this work, do you have 

any idea how much it may cost? 

Mr. DIVINE. Well, the President’s request for ‘07 is $110 million, 

and— 

Mr. LIPINSKI. But, down the line, do you have any idea how 

much more it’s going to cost? 

11

Mr. DIVINE. I can’t say specifically, because we don’t have experience with the system to roll that out to every employer, but, that’s 

the plan. 

Mr. LIPINSKI. I’m not trying to—you know, I think that it will be 

money well spent, I just wanted to try to get some sense of that. 

Congressman Calvert? 

Mr. CALVERT. Yes, Mr. Lipinski, I would point out, by the way, 

and just to confirm what the gentleman is saying, that right now 

the program is at 98.6 percent accuracy rate. It’s almost 99 percent. Obviously, if you expand the program very quickly that may 

affect accuracy, but still I think we can make it very accurate. 

Millions of credit card transactions every single day take place 

in America, with virtually—everyone has a high degree of confidence in using their credit card. I mean, you know, at least, you 

know, most of us anyway. 

But, the cost of this, I think eventually, can be borne by those 

who are not following the system. You know, there is, for those who 

knowingly hire people illegally, and I think we ought to give a lot 

of discretion to the regulators in making sure that we don’t fine 

people immediately, give them every opportunity to follow the law, 

but the fact is, is that there are people out here, believe it or not, 

that knowingly hire people that are here illegally. And, in my opinion, they should be fined, and those fines should help offset the cost 

of running this program. And, I think that that can go a long way 

to doing that. 

In the initial period of time, we really don’t know what it’s going 

to cost, until we get this up and operating, but it’s really not that 

complicated a system, though it seems complicated, simplistically 

we are checking a name against a number. 

Mr. LIPINSKI. I certainly agree with you that those who are—who 

are really violating the law, they should be fined, good place to get 

the money, we should be serious about enforcement. 

I think, Mr. Divine, did you have more information there? 

Mr. DIVINE. Hot off the presses, as it were, I’m told by people 

who will have to get it done, that the $110 million gets all 7 million 

employers on board by the end of the Fiscal Year ‘07, and that for 

‘08 the cost would probably go up a little to fully fund the positions 

that were obtained in ‘07, and hire about 40 more status verifiers. 

You know, when you talk about the scale that you expand to for 

all employers, even though we reduce the percentages the numbers 

go up, in terms of the work you have to do to run down. That’s the 

best information I’ve got. 

Mr. LIPINSKI. Thank you, I see my time is up. I have another 

question, but we’ll get on to other people asking questions. 

Chairman MUSGRAVE. Okay. 

While we are talking about the cost of the system, in your written testimony, Mr. Divine, you talked about a fee that would be assessed to pay for the system, and I have a huge problem with 

someone having to pay a fee to comply with the law. And so, elaborate a little bit on that, if you would, please. 

Mr. DIVINE. Well, I guess for USCIS, which is overwhelmingly a 

fee-funded agency, and if the budget request is granted for this 

year, it will be one of the only appropriated activities in this agency. And so, I guess there’s sort of a theory that we come to things 

12

with that, if the cost of it can be borne by those who are using it, 

as is in the rest of our business, then that’s something to consider. 

It certainly would reduce the amount of appropriations. It’s certainly a policy call for the appropriators to make, but it certainly 

would ensure the integrity and funding of the process if we had 

that funding stream. 

Mr. CALVERT. I would point out one thing, Ms. Musgrave. The 

system as it exists today is voluntary, and as was pointed out in 

the testimony it’s been phased in over a period of ten years. And 

so, employers have to voluntarily involve themselves in the system 

and pay that fee if they so choose. 

If it becomes a mandatory system, in my opinion, there should 

not be a fee, and that the appropriators should find money, as we 

have for this year, and I believe that any penalties, and, hopefully, 

we don’t have penalties, hopefully, the employers do the right 

thing, but those penalties should go toward the agency to help offset their costs. 

Chairman MUSGRAVE. Thank you. 

Mr. CALVERT. Offset the appropriation. 

Chairman MUSGRAVE. Thank you. 

Mr. Davis? 

Mr. DAVIS. Thank you very much, Madam Chairman, and I 

thank you and Mr. Lipinski for calling this hearing. Let me thank 

both of our witnesses. 

Representative Calvert, let me begin with you, and ask what exactly is it that you are trying to accomplish with your legislation? 

Mr. CALVERT. Well, I’ll just give you an example. When I was in 

the restaurant business, you know, I had many people come in and 

apply for work, and we would always file the I-9 forms that we 

were obligated to under the law, under the 1986 Immigration Act, 

and people would hand me identification. 

As required under the law, you have to—we need to xerox two 

identifications, stick it on the back of the I-9 form, usually a driver’s license, or a Green Card, but in every case a Social Security 

card. 

There’s no way for me to tell whether that Social Security card 

was a valid card or not. We are not checking people, we are checking documents, and many people I knew were using invalid Social 

Security cards. 

Well, let me tell you, there is no way that you could tell the difference between an invalid Social Security card and one that is a 

valid Social Security card. The counterfeit business is pretty good, 

and the documents that the folks use to get work are very good. 

And, as you probably know, Mr. Davis, it’s illegal for me as an 

employer to ask a person’s status, an individual status, I can’t 

check an individual under the law, under the Civil Rights Act. The 

only thing I want to do is check the voracity of the document. 

So, this legislation does, it doesn’t check people, it checks whether or not the Social Security number that’s being used is a valid 

number, that’s all it does, and that’s all we are attempting to do, 

is that people use legal documents when they apply for work, and 

I think that’s important, not just for the employer who wants to 

hire people who are here legally, but also for national security reaVerDate 0ct 09 2002 23:22 Nov 20, 2006 Jkt 000000 PO 00000 Frm 00016 Fmt 6633 Sfmt 6633 G:\HEARINGS\30282.TXT MIKE
13

sons. People use invalid documents, and so that’s what this legislation attempts to do. 

Mr. DAVIS. And now, the potential employer knows at least in his 

or her mind that the document used by the applicant is not matching, as being a legal document. 

Mr. CALVERT. Once I determine to hire an individual, I check 

that number and find out that it’s an invalid number, I’ll give 

that—under the law, the employee has some time to try to fix it, 

if, in fact, the employee says, well, Social Security made a mistake, 

or whoever, some agency made a mistake. 

But, yes, it’s just making sure that the Social Security number 

is a valid number. 

Mr. DAVIS. Now, if we should find, and that’s not necessarily a 

part, though, that the employer, then goes ahead and willfully 

hires an individual, do we seek any kind of additional penalty? 

Mr. CALVERT. Well, under existing law, under the law that exists 

today, that if an employer knowingly hires someone here, someone 

that’s here illegally, they can be fined today. The problem is, is how 

you prove they hired somebody knowingly illegally. 

Right now, before the Basic Pilot program, there was no way you 

could determine whether or not the documents were valid or not, 

so you couldn’t fine the employer if he filed the I-9 form properly, 

put the forms on the back of the file, so it was kind of a wink and 

nod system, quite frankly, since 1986. Everybody did it, everybody 

knew it, including myself. I’m probably the biggest sinner in Congress. I mean, I hired a lot of people, but there was no way that 

I could tell whether or not the documents that were being used 

were valid documents or not, until we had the Basic Pilot program. 

Mr. DAVIS. And now, we would know, and so this could actually 

cut down on illegal immigrants filtering into the job market, which 

could take away the concerns expressed by people that illegal immigrants are undercutting the labor force because they are not illegal anymore. 

Mr. CALVERT. Yes, sir, you are exactly right. I mean, people who 

are using fraudulent documents to get work will not longer be able 

to do so, and people who have correct documents will be able to get 

work, and that would remove the ‘‘job-magnet’’ from people coming 

from outside of the United States into the United States to obtain 

employment. 

Mr. DAVIS. So, I would then hope that the outcome of that would 

ultimately be that some individuals who take the harshest views 

and positions, relative to non-entry of immigrants, that might lighten them up a little bit. They may not be as opposed, because they 

don’t have that factor to say, here’s part of our rationale. 

Mr. CALVERT. I might point out, my district is 45—was 45 percent Hispanic. Most of the people that are in my congressional district are in favor, most of the Hispanics are in favor of a 

verification program, because they want—they don’t want to be discriminated against, quite frankly, the people that are here legally. 

And so, they believe that it’s a good system to verify whether or 

not the documents are correct when people apply for work. 

Mr. DAVIS. Well, I want to thank you very much, because it certainly has helped me. I view myself as not being opposed to individuals coming into the country, but I certainly don’t have any 

14

problem with finding out who is legal and who is illegal. So, thank 

you very much. 

Mr. LIPINSKI. Thank you, gentlemen. 

Chairman MUSGRAVE. Thank you, Mr. Davis. 

Maybe, I don’t know which one of you wants to answer this, but 

there is a tension between Immigration and the Department of 

Justice. You know, the Department of Justice assuring that there’s 

not discrimination in hiring, and Immigration making sure that 

people are legal. This is the tension that we always come down to. 

Could you comment on that, please? 

Mr. CALVERT. I think the important difference here is, we are not 

checking people. We are not checking Ken Calvert, or Ms. 

Musgrave, we are checking documents. We are checking documents 

to see whether or not they are valid or not. And so, when people 

use invalid documents to obtain work, unless they can fix that 

problem by finding proper documents, that they cannot have work. 

We are not checking individuals, that’s the difference here.

So, it’s non-discriminatory, because every single person who applies for work, every single one, must use valid documents in order 

to obtain work. And so, the question you’ve got to ask yourself, and 

maybe there are some people in this room, who is in favor of using 

invalid documents to obtain work? I mean, how can you say I’m for 

using invalid Social Security cards, or invalid driver’s license, or 

whatever, in this case a Social Security card because we can check 

the number versus the name. 

Chairman MUSGRAVE. Mr. Udall. 

Mr. UDALL. Thank you, Madam Chair. 

This is a good opportunity, I think, for us, Mr. Calvert, having 

you here, and having actual experience on this, and I applaud your 

effort to try to improve the system. 

My memory is when we passed that 1986 law, and maybe you 

can help enlighten me here, early on there was a major effort by 

the Federal Government to prosecute employers for knowingly hiring illegals. And, it seems like that was dropped very quickly. I 

mean, and I’m wondering what changed in that period. I mean, the 

law went into effect, I believe what the consensus that was 

reached, is that employers were the magnet that were drawing people here, and in order to solve the overall illegal immigration problem you had to deal with the employer part of it. 

And then, somehow that was dropped, and now we are trying to 

get back to it again, but do you remember what I’m talking about 

and what happened there? 

Mr. CALVERT. I remember as an employer. Now, you may want 

to hear from the agency itself to give their perspective on it, but 

I’ll give you my anecdotal information. 

Back in the days when the program first began, Immigration 

would come in and they would pick up your I-9 forms and they 

would check those I-9 forms to try to verify whether or not people 

had status to be working, say, within my restaurant, restaurants. 

And then, they would notify you of a list of names, and then they 

may come down and visit your restaurant one day and pick those 

folks up without any announcement. 

15

Well, employers started yelling and screaming, saying, hey, look, 

you know, we did the right thing, we filed the I-9 form, we put 

identification on the back, just like you told us to, and then you 

come in and, you know, say a farmer in the middle of harvest, or 

a restaurant guy in the middle of the lunch shift, or a manufacturer in the middle of the day, and you pick up all of our employees, you know, and then we lose a day’s work and it puts us, you 

know, in a bad position. 

So, I think there was a lot of pressure on the agencies and they 

kind of stopped. 

Now, the agency might want to give their perspective, but that’s 

my opinion about what happened in those days, and there were 

huge pressures because companies needed these employees here. 

Mr. UDALL. Right. 

Mr. CALVERT. I mean, that was the basic response that people 

were saying, there was no way for the employer to know who they 

were hiring. 

Mr. UDALL. Yes, but, please, thank you, Mr. Calvert, please, go 

ahead. 

Mr. DIVINE. I have to say that for 18 of the 20 years that have 

ensued in the meantime I was a practicing lawyer, so I can say, 

similarly to Mr. Calvert, from the private sector point of view I was 

advising clients about whether to participate in this program when 

it became available. And, echoing what Congressman Calvert said, 

one of the primary reasons for a human resources manager to push 

participation in this program was to avoid that moment when the 

INS would come in and raid the place and take away half the 

workers, and make it impossible to make any kind of production. 

That’s the kind of event that gets the human resources manager 

fired, and that’s the kind of event that they would try to plan 

against. 

And, this system allows for an employer to weed out clearly unauthorized workers on the front end, and to do that in lock step 

with every other employer in the industry, so that there’s not a 

competitive disadvantage from compliance. 

And so, it all makes sense. 

Mr. UDALL. There’s been a lot of discussion about a tamper-proof 

verification card. I mean, where does that fit in this picture? 

Mr. DIVINE. We make tamper-proof cards, we make some that 

aren’t tamper-proof, and we are going to quit making the kind— 

Mr. UDALL. Mr. Calvert is smiling, so I’m going to get him to 

comment on this one. 

Mr. DIVINE. Well, tamper resistant, may I say, we make tamperresistant cards in the form of what we call the ‘‘green card’’ that 

hasn’t been green for a long time, but is the Permanent Resident 

Card, and we also make a work authorization card. We make two 

kinds. One is a kind that’s issued out of a secure facility that has 

a lot better features in it, and the other is a kind that’s made in 

local offices that can be counterfeited quite easily. And, we want 

to quit making that second kind, not only because it’s 

counterfeitable, but because the systems out of which it’s made are 

not tied in well with, and can’t be tied in well with, the verification 

database. 

16

So, we’ll have more tamper-resistant cards when we have only 

those two kinds, and whatever other similar kinds we make for any 

other program that comes down the pike, but I think I want to 

make clear, that is not foolproof, and there is no card that can be 

made that cannot be counterfeited, or at least can’t be attempted 

to be counterfeited, and someone who wants to make a card that 

has a stolen identity in it, and present that to an employer, may 

still be able to get away with that, because the data will verify in 

the system, because it’s a real human being. But, we’ll get more sophisticated, because we will be detecting patterns of use of those 

identities and will be able to take action and make investigation 

with our partner at ICE to sort that out when we detect that pattern. 

Mr. CALVERT. I would just point out that this bill, I mean, Basic 

Pilot Employment Verification, does not get into tamper proof, 

that’s separate. However, I will say that somewhere down the line 

we may want to look at that, but this legislation doesn’t get into 

national ID or tamper-free identification. 

To get into that, you need—the only way to have a surety in the 

program is to have a biometric identifier on the card itself for each 

individual, and that gets into a whole different debate, which is not 

this legislation. 

Mr. DIVINE. And, I apologize if I misled you, when I say ‘‘we,’’ 

Department of Homeland Security makes those cards, that doesn’t 

apply to citizens who would not be having a Permanent Resident 

Card or a work card to present. 

Chairman MUSGRAVE. Mr. Lipinski, I’m going to recognize you 

for your second question. 

Mr. LIPINSKI. Appropriate follow up on what we were just talking 

about, I don’t quite understand, if these cards you are talking 

about, tamper-resistant cards, are going to go to people who—they 

are not going to go to U.S. citizens, because we are not going down 

the line of a national ID card, well then, if you are impersonating, 

if you are coming in and you are saying, I am a citizen, gives false 

documents, then how does that help, because you are not going to 

come in and say, well, I—if someone is not really eligible to work, 

aren’t they going to claim that they—probably going to claim that 

they are a citizen, so then they don’t have to, you know, bring you 

a card that you are talking about? 

Mr. DIVINE. That’s an excellent question, and it gets to the heart 

of it, and, again, it’s not a foolproof system, and people may very 

well claim to be citizens, and present documents like that, just as 

well as they may claim to be a permanent resident with a card that 

looks like the kinds of cards that we give out, and that contains 

data of a real human being whose information will match. 

But, if you are working and living in Illinois, and the same person—a person who uses the same data as you to validate in Miami, 

and in Ohio, and in Minnesota, within a short period of time, then 

our system will be improved to recognize that and to cause action 

to be taken. 

Mr. LIPINSKI. Yes, I agree, that is the key, as Representative Calvert had talked about earlier, so as long as there is that type of 

tracking to make sure that there isn’t duplications like that, and 

I certainly hope that that can and will be done. 

17

Thank you. 

Mr. DIVINE. That’s certainly the plan. 

Chairman MUSGRAVE. Mr. Davis, did you have another question? 

Mr. Udall? 

Mr. UDALL. No, no more. 

Chairman MUSGRAVE. Okay. 

I’d like to thank our panel, thank you, Congressman, thank you, 

Mr. Divine, for your testimony today. 

Mr. CALVERT. Thank you. 

Chairman MUSGRAVE. I’d like to call up the second panel, please. 

We are going to have Mr. Jack Shandley on the panel, Senior Vice 

President of Human Resources at Swift & Company, from Greeley, 

Colorado; Mr. Mark Krikorian, Executive Director, Center for Immigration Studies, here in Washington, D.C.; Mr. Monte Lake, 

Partner, McGuiness Norris & Williams, American Nursery and 

Landscape Association; Mr. Angelo Amador, Director of Immigration Policy, U.S. Chamber of Commerce; Mr. Toby Malara, Government Affairs Counsel, American Staffing Association, from Alexandria, Virginia. 

I’m going to ask you all when you speak to get the microphones 

as close as you can, it’s kind of difficult to hear, and, Mr. Shandley, 

we’ll start with you. Welcome to Committee. 

STATEMENT OF JACK SHANDLEY, SWIFT & COMPANY 

Mr. SHANDLEY. The penalty for sitting on the end, I guess. 

Chairman MUSGRAVE. You get to go first, yes. 

Mr. SHANDLEY. Thank you, Chairman Musgrave, Congressman, 

members of the Committee, and other esteemed guests good afternoon. My name is Jack Shandley, and I am Swift & Company, as 

Senior Vice President of Human Resources. Thank you for inviting 

me to testify today. 

I will begin with some background information on Swift. Swift is 

the third largest processor of both fresh beef and pork in the 

United States. Our annual sales are close to $10 billion, and we 

employ 15,000 people domestically and 20,000 worldwide. We operate nine domestic processing plants in eight states. 

Today’s meat processing industry is nothing like it was 10 years 

ago, much less 100 years ago. Our production facilities are safe, 

clean, and pay wages and provide benefits that enable our people 

to achieve the American dream. 

Swift’s production wages are at or above average rates in the 

communities within which we operate. We offer affordable 

healthcare benefits to employees who have been with us for at least 

six months, and approximately 80 percent of our qualified employees participate in our healthcare plans. 

Our production employee turnover rate is lower than industry 

figures for leisure and hospitality, construction, and retail trade. 

All but one of our domestic plants are unionized. 

Our safety rates, as measured by lost time injury incidence, are 

comparable to all manufacturing businesses in the U.S. Our Greeley beef facility recently completed 5.4 million operating hours 

without a lost time injury! 

Simply put, this isn’t the meat processing industry you hear and 

read about in the media. 

18

Regarding immigration reform, the ongoing highly charged debate highlights the importance of this issue to the American public. 

Similar to a large percentage of the electorate, Swift & Company 

supports the development of common sense, balanced and comprehensive immigration reform legislation that: 1. 

Recognizes the U.S. economy’s current and future needs for 

workers to support growth; 2. 

Protects employers that act in good faith to comply with all legal 

hiring requirements; and 3. 

Contains border security and guest-worker provisions. 

Today’s hearing clearly touches on my second point with respect 

to the role of employers in the current immigration debate. While 

Swift is clearly not a ‘small business’‘ by definition, we do have a 

wealth of experience in the area of employee identity verification 

that is relevant to today’s hearing. 

Under the current U.S. law, employers assume responsibility for 

verifying the identity and employment eligibility of newly hired 

employees. As part of the hiring process, we are required to complete and retain individual I-9 forms. When completing the I-9 

form, a total of 29 distinct documents may be used by the employee 

to properly establish his or her identity. It is important to note that 

we as employers are limited in our ability to verify the identity of 

a new employee: we can’t ask for a specific identification document; 

we can’t ask for additional forms of identification; and we can’t 

refuse to accept any single eligible identification document. 

Two federal departments enforce the verification and non-discrimination provisions of existing immigration legislation: the Department of Homeland Security’s Immigration and Customs Enforcement branch is charged with enforcing verification provisions, 

and the Department of Justice’s Office of Special Counsel enforces 

anti-discrimination provisions. 

This enforcement structure creates significant policy tension between the need for employers to accurately determine workers’ eligibility versus the need to address privacy and non-discrimination 

concerns. 

In 2002 we experienced this policy tension first hand when the 

Office of Special Counsel cited Swift for $2.5 million for allegedly 

acting too aggressively when verifying the work authorization status of new hires. To repeat, our company found itself in hot water 

for allegedly pushing too hard to ensure employees possessed the 

status they claimed! After two years of close cooperation with Federal officials we ultimately settled the case with no admission of 

guilt for approximately $200,000. 

Since 1999 Swift has voluntarily participated in the government’s Basic Pilot Program to supplement our efforts to properly 

verify the identity of all new hires. This program, along with increased employer sophistication in processing identity documents, 

was reasonably effective in helping to eliminate the use of counterfeit paperwork. 

However, over time weaknesses in the Basic Pilot weaknesses 

came to light. As currently structured, the Basic Pilot Program 

cannot detect duplicate active records in its database. The same Social Security number could be in use at another employer, and potentially multiple employers, across the country. 

19

The underground market responded by replacing counterfeit documents with genuine identification documents obtained under 

fraudulent terms—for example, state identification cards obtained 

with valid copies of birth certificates. As an employer, we must accept such cards on face value. Yet valid birth certificates can be resold to another undocumented worker for reuse in obtaining yet another official state identification card. 

As you can see, employers have no foolproof way to determine if 

a new hire is presenting valid identification documents created 

under fraudulent circumstances. Furthermore, attempts to use additional means to determine employee eligibility place employers in 

jeopardy with law enforcement agencies. From our point of view, 

employers like ourselves who are trying to abide by the law are not 

the problem in the immigration reform debate—the current immigration system is the problem. 

In light of these problems we have three recommendations for 

Congress on how to improve the current system: 

First, create enhancements to federally-endorsed programs that 

aid employers in their efforts to determine the work eligibility of 

new hires. This could be achieved in a variety of ways, from improving the Basic Pilot Program to creating a tamper-proof, biometric national identification card. It is unfair to blame employers for 

the failings of the system and it is unreasonable to assume we can 

identify fraudulently obtained documents. Give us a comprehensive, workable solution and we will execute against it.Second, reconcile the policy tension that exists for employers when managing 

the boundaries between employee verification and non-discrimination. Remove the burden of enforcement on both sides of the issue 

by granting safe harbor to employers that participate in federal 

worker identification programs. 

Finally, continue the practice of voluntary participation in federal worker identification programs. We have chosen to participate 

in the Basic Pilot program because the large number of applicants 

we process makes it cost-effective for us to do so. Small business 

owners in America may not benefit from the increased costs and 

delays associated with mandatory participation in a verification 

program. Give business owners a fair choice: risk breaking the law 

and suffer stiff penalties, or participate in a federal identification 

program and gain protection from liability. 

Thank you for inviting me to speak today and for your ongoing 

efforts to implement common sense, balanced and comprehensive 

immigration reform legislation. 

Thank you. 

Chairman MUSGRAVE. Thank you for your testimony, Mr. 

Shandley. 

[Mr. Shandley’s testimony may be found in the appendix.] 

Chairman MUSGRAVE. Now we’ll hear from Mr. Amador. Welcome. 

STATEMENT OF ANGELO AMADOR, U.S. CHAMBER OF 

COMMERCE, ESSENTIAL WORKER IMMIGRATION COALITION 

Mr. AMADOR. Thank you. 

20

Chairman Musgrave, and, Ranking Member Lipinski, I’m Angelo 

Amador, Director of Immigration Policy at the U.S. Chamber of 

Commerce. 

Chairman MUSGRAVE. A little closer, please. 

Mr. AMADOR. More than 96 percent of our over 3 million members are small businesses with 100 or fewer employees, 70 percent 

of which have ten or fewer employees. I am also testifying on behalf of the Essential Worker Immigration Coalition, which is the 

business coalition working on comprehensive immigration reform. 

I would like to start by clarifying that the Chamber does support 

a new employment verification system, but like President Bush we 

support such a program within the context of comprehensive immigration reform. It has to be emphasized that the overall system 

must be fast, accurate and reliable on the practical real-work conditions. 

As to the competing versions now in the Senate and the House 

Immigration Bills, the Chamber prefers the Senate version with 

some important exceptions, since both versions, as stated earlier, 

relied on the same databases used in the Basic Pilot, the discussion 

shall start there. 

It is worth noting that on under both the House and the Senate 

versions these electronic programs will retain proper work requirements to verify the identity of workers, so it is not like the credit 

card, as a lot of people have the misconception that you can just 

run through the system. 

Meanwhile, the Basic Pilot program’s underlying databases continue to be a problem. The records are not quickly updated, there 

are often errors, particularly, with name changes due to marriage, 

or compound names which are common among Latinos. 

The most comprehensive independent study on the Basic Pilot 

program found that 20 percent of properly work authorized individuals are told initially that they are not authorized to work. 

Congress needs to ensure that any new system minimizes errors 

and contains the mechanism in which errors can be quickly rectified. Even an extremely low error rate of 1 percent would translate into the improper disqualification of about 1.4 million potential 

workers, including U.S. citizens. 

As to expenses, the GAO estimated that a mandatory Basic Pilot 

program will cost about $11.7 billion per year, with employers 

bearing most of the cost. In addition to infrastructure and training, 

a great deal of staff time will probably be spent verifying and 

reverifying worker Eligibility, resolving data errors, and dealing 

with wrongful denials of eligibility. 

However, employers should not also be burdened with a fee to 

pay for the cost of building the system itself. That is a government 

function and should be paid for by the government. 

There are five key components to create a workable employment 

eligibility system within the context of comprehensive reform. 

First, the system should have a default confirmation, non-confirmation procedure when the government is unable to reach a 

final decision within a reasonable time frame. Keeping employees 

in a tentative non-confirmation limbo is unfair to everyone. Forbidding employers from filing tentatively non-confirmed employees, 

but then using this data to investigate employers is unacceptable. 

21

To address this issue, the Senate version creates a final default 

confirmation, non-confirmation when DHS cannot issue a final notice of employment eligibility within two months of the hiring date. 

While two months for a final default notice is too long, this provision is still extremely important. 

To reduce the lag time to a more reasonable time frame, the time 

allowed for the government to reply should be reduced and employers should be allowed to submit the initial inquiry about two weeks 

before the first day of employment. 

These changes will let the employer have a final determination 

within two weeks of an employee’s first day at work, as opposed to 

two months. 

Second, there should be a reasonable approach to the contractor/

subcontractor relationship and protections for unintentional violations. Perhaps, the most important language found in the House 

version was a result of an amendment by Congressman Westmoreland of this Committee. The language provides an exemption from 

liability for initial good faith violations, which you mentioned at 

the beginning of the hearing, and a safe harbor for general contractors who have subcontractors that hire unauthorized workers without their knowledge. 

Third, the new system should be facing or tiered to guarantee 

proper implementation at every level. GAO continues to call attention to the weaknesses in the Basic Pilot program, including delays 

in updating immigration records, false negatives, and program software that is not user friendly. The system should be expanded to 

the next phase only when identified problems have been resolved. 

Recently, GAO reiterated its conclusion that as of now the Basic 

Pilot is not ready for the kind of implementation called for in H.R. 

4437. 

Fourth, it needs an investigative system without artificially creative incentive in favor of automatic fines and frivolous litigation. 

We oppose the so-called employer compliance fund found in the 

Senate version, which creates an incentive for litigation, because 

under this scheme the fines and fees supplement the agency’s 

budget. Instead, in addition to civil fines and criminal penalties 

being commensurate to the violation, the system should allow for 

the issuance of warnings and/or reasonable time for employers to 

correct administrative errors without automatically being subject to 

an enforcement action. 

Fifth, there should be accountability structures for all involved 

including our government. The possible harm to employers, United 

States citizens and legal immigrants due to a flawed system should 

not be taken lightly. The Senate version holds the government accountable through the creation of a review process that allows employers and employees opportunity to contest findings. Workers 

could seek compensation for lost wages due to agency error, and an 

employee fined by the government due to an unfounded allegation 

could recover some attorneys fees and costs that they prevail in 

their appeal. 

Finally, employers will be at the forefront of all compliance 

issues and should, therefore, be consulted into shaping up a new 

system, to ensure that it’s workable, reliable and easy to use. 

Thank you. 

22

Chairman MUSGRAVE. Thank you for your testimony. 

[Mr. Amador’s testimony may be found in the appendix.] 

Chairman MUSGRAVE. Mr. Krikorian. 

STATEMENT OF MARK KRIKORIAN, CENTER FOR 

IMMIGRATION STUDIES 

Mr. KRIKORIAN. Thank you, Madam Chairman and Mr. Lipinski. 

I’m the Executive Director of the Center for Immigration Studies. 

We are a think tank here in town that examines immigration and, 

incidentally, also a small business. I appreciate the chance to testify today. 

I wanted to ask three questions about employment, a mandatory 

Employment Verification System. Would it be practical to do? 

Would it be burdensome for business, and would it be good or bad 

for business? 

The first point is, would it be practical? I think the answer is 

clearly yes, with adequate resources and adequate political support, 

both from Congress and from the Executive Branch, there is no 

reason that this shouldn’t—we shouldn’t be able to implement a 

workable verification system. 

Now, there were something like 56 million hiring decisions last 

year made in the United States, average of 200,000 plus each business day. Now, that sounds like a lot, but when you put it in context it really isn’t that big. Customers of iTunes download five 

times that many songs every day. Wal-Mart checks out 50 times 

that many customers every day, and VISA processes 500 times that 

many credit card transactions each day. 

Now, obviously, there are going to have to be improvements in 

the system, and some of the witnesses already referred to those. 

The capacity will have to be increased. The speed of entering in 

new information into DHS databases will have to be increased. 

Most importantly, there’s going to have to be monitoring of the patterns of use, so that multiple uses of the same legitimate numbers 

are exposed. But, those are things that DHS is already working on 

and are achievable objectives. 

Secondly, is it likely to be burdensome for business? As a small 

businessman, I appreciate the multitude of government mandates 

that are placed on small business. As I was writing this testimony, 

I went into our break room and I looked on the wall of all the disclaimers that we’re required to post on the wall, and there were 

references to the Civil Rights Act, the Occupational Safety and 

Health Act, the Family and Medical Leave Act, the Employee Polygraph Protection Act, the Drug Free Workplace Act, the Youth Employment Act, Uniform Services Employment and Re-employment 

Rights Act, among others. 

Even George McGovern, when he became a small business man, 

wrote that legislators and government regulators need to more 

carefully consider the economic and management burdens that we 

have been imposing on U.S. business. I couldn’t agree more, and 

that’s why it’s a good thing that such a program would not, in fact, 

place disproportionate burdens on business. 

The National Federation of Independent Business, the authoritative voice of small business here in Washington, polled its members and found overwhelmingly they were concerned about illegal 

23

immigration, they wanted increased penalties against crooked employers, and that a centralized verification system like this would 

minimize whatever extra burdens that verification might place on 

them. And, this isn’t just theoretical, because my own small business actually participates in the verification program, and we have 

for more than a year, and it represents no extra burden really for 

us at all. 

A growing number of businesses agree, voluntarily flocking to the 

program over the past three years the number of participants has 

quadrupled, including most notably in the news Dunkin Donuts 

and Baskin Robbins now require all of their franchisees to participate. 

And, if and when Congress does make verification mandatory for 

all employers, what we are going to see is creation of a market for 

entrepreneurs to actually make whatever burden does exist be even 

less and simplify it more, especially for small business that doesn’t 

have the infrastructure in place, the H.R. departments, to do it on 

their own. DHS has already provided for this, they have designated 

agents, they call them, or at least an opportunity for companies to 

step forward as designated agents to make it their job to do the 

Basic Pilot process for others. 

The first one that—there’s already a firm that’s been approved 

as a designated agent, not only for doing Basic Pilot, but for 

paperless I-9 forms as well. It’s called Form I-9 Compliance in 

southern California, and other firms will follow in their wake. And, 

they not only provide a paperless web-based I-9 form that checks 

with Basic Pilot, but includes extra services that entrepreneurs are 

going to think of that government employees may not have thought 

of, for instance, periodic reminders of upcoming expiration date for 

a temporary alien worker. And, in a sense, what these firms do is 

what Turbo Tax does for tax filing, they offer a user friendly, a 

more user friendly interface, eliminate paper, reduce errors, and 

file electronically. 

The third and final point is, is this good for business? And, you 

might say that, well, this isn’t all that big a burden, it’s root canal, 

but the root canal doesn’t hurt too much. Actually, it’s quite the opposite. A verification program is good for businesses. I can see why 

business, small business in particular, would be alarmed about all 

of this talk of penalizing employers as part of enforcing immigration laws, but, in fact, the verification system is not intended to penalize employers, but to empower employers, so that they know 

who they are hiring. It takes the guess work out of establishing a 

legal work force, so they build their work force on concrete, not on 

sand, a work force that doesn’t run away when there’s an immigration raid, won’t be arrested when the inevitable immigration, broad 

national immigration crackdown does come. 

In fact, I would submit that public companies that are not participating or exploring participation in the Basic Pilot are neglecting their fiduciary responsibility to shareholders by imprudent 

labor practices that jeopardize the stability of their labor force. 

And, even privately-held companies, which is what most small 

businesses are, while not answerable to shareholders, nonetheless, 

have a moral responsibility to their employees, their customers, 

their creditors, to conduct due diligence in their hiring decisions. 

24

And, let me just, my last point, to point out that Congressman 

Lipinski’s point of it being mandatory, so that there’s a level playing field for all business, is essential. I remember hearing about a 

landscaper in southern California who enrolled in the program, he 

was a patriotic employer, wanted to do the right thing, but was undercut by competitors not in the program. So, making it mandatory 

for all employers is, in fact, a pro business measure. 

Chairman MUSGRAVE. Thank you for your testimony. 

[Mr. Krikorian’s testimony may be found in the appendix.] 

Chairman MUSGRAVE. Mr. Malara, we’ll go to you now, welcome 

to Committee. 

STATEMENT OF TOBY MALARA, AMERICAN STAFFING 

ASSOCIATION 

Mr. MALARA. Thank you, Madam Chairman Musgrave, Ranking 

Member Lipinski. My name is Toby Malara, and I’m the Government Affairs Counsel for the American Staffing Association, and we 

appreciate the opportunity to offer comments on the Employment 

Verification System provisions contained in H.R. 4437. 

ASA members provide a wide range of employment-related services and solutions, including temporary and contract staffing, recruiting and placement, outsourcing, training, and human resource 

consulting. Member companies operate more than 15,000 offices 

across the Nation and account for more than 85 percent of U.S. 

staffing industry sales. 

The staffing industry employs almost 3 million employees a day 

ad more than 12 million each year. Staffing firms recruit and hire 

their employees and assign them to businesses to assist in special 

work situations. Employees work in virtually every skill level and 

job category, including industrial labor, office support, engineering, 

IT, legal accounting and healthcare. 

Most of ASA’s members earn less than $12.5 million in annual 

revenue and thus qualify as small businesses under SBA guidelines. Like all staffing firms, they have unusually large numbers of 

employees relative to revenue due to their workers’ short tenure. 

For example, it’s not uncommon for a staffing firm with annual 

revenue of $10 million to employee more than 1,000 employees 

each year. As you can see, any new employment verification system 

will have a great impact on our members. 

ASA also represents hundreds of firms that recruit and refer individuals for hire by others. Unlike temporary and contract staffing 

firms, traditional placement and executive recruiters do not hire 

the individuals seeking employment and, therefore, as we note 

later, such firms currently are not subject to employment 

verifications, nor should they be. 

While there are a number of points that we raise in our written 

testimony, I would like to touch on two major points today. 

Under current law, staffing firms and other employers have the 

option of verifying employment eligibility upon either the offer of 

employment or at the time work actually commences. For example, 

a person will walk into a staffing firm to apply for a job. They’ll 

go through an interview process, and the staffing firm will determine if they are qualified for work assignments. At that point, the 

person has been made an offer of employment for the purpose of 

25

I-9 verification process, even though a specific job assignment is 

not immediately available. 

When an assignment does come up that the person is qualified 

for, the staffing firm will call and notify the employee, who will 

then go directly to the client’s work site. Many employees never return to the staffing firm’s office. 

Because these assignments must be filled on short notice, it 

would be difficult, if not impossible, for employees to return to the 

staffing firm’s office to complete the attestation and document examination process prior to going on assignment. 

Moreover, getting to the staffing firm’s office would be a significant hardship for employees who live far away from that office or 

who rely on public transportation. 

Staffing firms and other similarly situated employers have the 

option of completing the attestation and document examination 

phase of the verification process at the time that they are offered 

employment. They should continue to have the same flexibility in 

using any new electronic employment verification system enacted 

by Congress. 

Also under current law, the obligation to verify employment eligibility generally applies only to employers, not to those who merely 

recruit or refer individuals for employment by others. There is a 

minor exception for those who recruit agricultural or farm workers. 

Traditional placement agencies and executive search firms help 

match candidates looking for jobs with our clients, who are perspective employers. Once a candidate is hired for a job, they become the employee of the client, and the client assumes the obligation of verifying their employment eligibility. 

Currently, there’s language in the House bill that would make it 

unlawful to hire or to recruit or refer for employment an individual 

without complying with the employment verification requirements. 

We are concerned that this broad reference to those who recruit 

and refer could again be construed improperly as expanding the 

verification requirement to all recruiters. 

While there is other language in the House bill that appears to 

limit the reference to recruiting and referring to labor service agencies that operate day labor hiring halls, we urge that the bill be 

amended to make that unequivocally clear to avoid any misinterpretation. 

We do not think that employers should have to pay a fee for 

using the system, or that employers should have to reverify their 

entire work force, unless there are extraordinary circumstances, 

such as significant past immigration violations. These issues are 

discussed in greater detail in our written statement. 

The American Staffing Association strongly supports Congress’ 

efforts to develop a new Employment Verification System that is effective, efficient, accurate and reliable, and we look forward to 

working with members of Congress and others to bring such a system to fruition. 

Thank you very much. 

[Mr. Malara’s testimony may be found in the appendix.] 

Chairman MUSGRAVE. Thank you for your testimony. 

Mr. Lake, welcome to Committee. 

26

STATEMENT OF MONTE LAKE, MCGUINESS, NORRIS & 

WILLIAMS, LLP 

Mr. LAKE. Thank you, Madam Chair and Ranking Member Lipinski. I appreciate the opportunity to testify on behalf of the Agriculture Coalition for Immigration Reform, including the American 

Nursery and Landscape Association and National Council of Agricultural Employers. 

The coalition includes over 150 state, regional and national agricultural organizations, representing thousands of small farming, 

ranching and nursery businesses. It was formed six years ago for 

the purpose of promoting comprehensive immigration reform as it 

relates to agricultural employers. 

My name is Monte Lake. I’m a Partner in the labor and employment law firm of McGuiness Norris & Williams in Washington, 

D.C., and I have represented many small businesses engaged in agricultural and horticultural operations throughout the U.S., in their 

efforts to comply with the requirements of federal immigration and 

employment law over the past 20 years since IRCA was enacted. 

I appreciate the opportunity to address the issue of employment 

verification. American agriculture will support electronic 

verification of employment eligibility, as long as the process is simple, manageable, and provides clear-cut compliance responsibilities. 

It is also imperative that Congress pass comprehensive reform 

that ensures American agriculture an adequate supply of legal 

workers to replace those that likely will be screened out by an electronic verification system. 

My comments on H.R. 4437, the House passed bill, are made in 

the light of the failures of the legal compliance morass that currently surrounds the Verification of work authorization that’s been 

addressed by some of the witnesses before me. Employers should 

not face discrimination charges as a result of trying to hire legal 

workers, but that’s been the history. 

Small employers want clarity, simplicity and a rational system 

that facilitates legal compliance, and now is the time to get it right 

after 20 years. 

I ask that my written statement be submitted into the record, 

and I’ll be glad to answer questions after the presentation of these 

brief oral remarks. 

A new verification system should achieve, at a minimum, seven 

goals. 

One, it must screen out undocumented workers and provide employers certainty that they have a legal work force, that their training costs will not be wasted, and their businesses later disrupted 

by revelations that certain workers are illegal. 

Two, it must reduce the number of employment documents. The 

current menu of 29 different documents to establish legality is confusing and leads to discrimination charges. ACIR supports the establishment of a single Social Security type card for purposes of 

employment verification, similar to the approach of H.R. 98 introduced by Representative Drier. It would simplify the hiring process, and help eliminate the problem of discrimination that is a 

problem under current law. It’s simplicity that we seek. 

Three, the new verification system should be implemented over 

time, and should not be applied retroactively. Placing too many deVerDate 0ct 09 2002 23:22 Nov 20, 2006 Jkt 000000 PO 00000 Frm 00030 Fmt 6633 Sfmt 6633 G:\HEARINGS\30282.TXT MIKE
27

mands, too soon, has the potential to overwhelm the system creating compliance challenges and defeating its purpose. The approach taken in H.R. 19, introduced by Representative Calvert, 

who we heard here today, and commented on by the Chairman, is 

a reasonable one that anticipates the problem and would phase in 

perspective verification over a number of years. The largest employers would be subject to the system first, and the smallest employers several years later. 

Four, because of the inherent tension that’s been referenced between verification and discrimination under the law, the new law 

should set forth clearly any new duties and rights related to discriminatory practices based on national origin and citizenship status. H.R. 4437 merely directs the Secretary of Homeland Security 

to evaluate the problems related to this issue, but doesn’t provide 

employers and workers any guidelines. 

Five, agricultural businesses often hire farm labor contractors, 

which they consider to be the employers of the workers they provide. Contractors have an obligation to verify the status of the 

workers they supply. The law should make clear that the agricultural business does not have a duplicate verification obligation and 

can rely upon the verification of the contractor. 

Six, the penalties for verification paperwork violations should be 

reasonable. Inadvertent mistakes, often repeated through the hiring process, could incur fines between $1,000 and $25,000 per violation, per piece of paper, under the bill. Small employers that span 

from family to hundreds of seasonal workers each year, face hundreds of thousands of dollars in fines under the provisions. We believe that Congress should revisit this issue and provide a more 

reasonable approach. 

And finally, seven, the legislation also must provide a viable 

means for agricultural employers to obtain legal workers. An effective verification system would screen out a majority of the agricultural work force. The U.S. agricultural work force has become increasingly populated by foreign workers who lack work authorization, as reported by the last report of the United States Department of Labor. 

In anticipation of this problem, American agriculture came to 

Congress ten years ago, when IIRIRA was considered, and expressed support for electronic verification, as long as it was accompanied by substantial reform of the H.288 Agricultural Guest 

Worker Program. Because of the difficulties in using that program, 

less than 2 percent of the seasonal agricultural work force are 

brought in through it. 

An employer enforcement only, or enforcement first approach to 

immigration reform, that does not include a reform worker program, will be disastrous for American agriculture. Not only will 

field production jobs be lost, but for every field job the three to four 

jobs in cities and suburban areas that provide processing, packaging, chemicals, farm equipment, transportation, and ports also 

will be lost. 

We hope that America is not willing to export its labor-intensive 

agriculture and rely upon foreign imports. 

Thank you very much for the opportunity to testify. 

[Mr. Lake’s testimony may be found in the appendix.] 

28

Chairman MUSGRAVE. Thank you for your testimony. We may be 

called for votes right away, so we’ll quickly move through questions. 

Mr. Shandley, I was amazed when I heard you talking about the incident in 2002, and the original fine was cited at $2.5 million because allegedly you had been too aggressive in seeking proper 

verification for new hires, and I’m trying to—it’s kind of the darned 

if you do and darned if you don’t situation. 

Could you elaborate a little bit on that experience, and I assume 

a great deal of frustration that you were going through with that? 

Mr. SHANDLEY. Thank you, Chairman Musgrave. 

In elaboration, one of the things Swift & Company does, both as 

a domestic employer as well as a global employer, is we do want 

to have a very strong working relationship with all agencies, and 

comply with the laws. 

In the situation at hand, it basically was the tension that was 

alluded to earlier, where circumstances at one of our facilities, 

where they had documentation, they suspected that they had 

passed the Basic Pilot program, they suspected that there may be 

some problems with it, they tried to look into it further, and ultimately got us in hot water through the Office of Special Counsel. 

And, I will sit there and say that at the end of the day the working relationship between the INS then, or ICE now, and the Office 

of Special Counsel, succeeded in working through the issues, and 

the ultimate fine was really just—it was really a cost avoidance of 

further litigation, not an admission by any means. But, it does 

spell out the simple fact that we can hire—we’ll hire people using 

legal documents that were obtained fraudulently, and that becomes, you know, part of the issue that an employer faces. Our 

staffs are not trained to be detectives at that level. 

Chairman MUSGRAVE. Well, Mr. Divine had said that if many 

people were using the same documentation, you know, in a number 

of states, I believe it was his example that it would be caught. And, 

I noticed in your testimony that you see, however, any kind of duplicate use of valid documents as a real problem. Is that the case? 

Mr. SHANDLEY. Yes, basically, we have a lot of experience with 

the Basic Pilot program, but it does have its flaws as we’ve heard 

today. 

The biggest flaw really is the person could take a legitimate birth 

certificate, go to an office and get a legitimate Social Security card, 

and that legitimate Social Security card then goes to a state to get 

a state ID with a picture on it. At that point on, that Social Security card and the state ID, by law, we are required to accept, even 

though it was fraudulently obtained. 

The other issue that comes up is really the fact that has already 

been mentioned, is unless you individually look at your Social Security statement at the end of the year, and look at where the income flow is coming from, you don’t know how many times or how 

many employers that same Social Security number is being used. 

The Basic Pilot is very good, and it’s very quick in its turnaround, and it’s the right start and the right step, but it doesn’t 

go into the active Social Security numbers, and so those active Social Security numbers, as it stands today, could be used elsewhere 

and fraudulently. And so, that’s the issue that we have. 

29

Chairman. MUSGRAVE. Thank you. 

Mr. Lipinski? 

Mr. LIPINSKI. Well, let me first go through and just quickly ask 

each one of you whether or not you think that the pilot program 

can be expanded and can be used to cover everybody, just very 

quickly, just say yes or no, and then we’ll get into more details. 

Mr. Shandley? 

Mr. SHANDLEY. The answer is yes, but I’d like to expand on that, 

if I had an opportunity. 

Mr. AMADOR. It could be expanded, but in phases, if all the problems are fixed. If not, it will be expanded but it will be flawed. 

Mr. KRIKORIAN. Yes. 

Mr. MALARA. Yes. 

Mr. LAKE. I think it has to be expanded over time. It’s being used 

by 9,000 employers as I understand now, and we are looking at 7 

million, and we need to phase it in gradually. 

Mr. LAKE. Mr. Shandley, you seem to have the most concerns 

about it. What are you most concerned about? We just talked about 

the fact that, you know, on our first panel we talked about you can 

pull out multiple times a Social Security number is being used, you 

can flag that, pull that out, find the problem. You said that can’t 

be done right now. So, what do you sort of boil it down to? Very 

quickly, what do you think are the most important changes that 

need to be made? 

Mr. SHANDLEY. Let me qualify, Your Honor, it absolutely can be 

and should be expanded, and I believe it should be expanded immediately, sooner rather than later. 

We’ve taken it upon ourselves, as a major employer, with, you 

know, our payroll is over a half a billion dollars, and if you simply 

use the force multipliers that’s a lot of economic impact in the regions that we operate. 

We’ve taken it upon ourselves to force our subcontractors, and I 

use the word force figuratively, or push our subcontractors to use 

the Basic Pilot program. By law, they are not required to do that. 

And yet, it’s our effort, as a private employer, to try to get the 

Basic Pilot used in a broader fashion, so that’s my point of clarification. I believe it can be, and should be, accelerated, enhanced. It’s 

a procedural issue, it’s a process issue, it’s a database issue, like 

we talked about earlier today. 

Mr. LIPINSKI. Mr. Amador, would you want to add? 

Mr. AMADOR. Yes, I would like to add that it’s important to mention that in both bills, and all through immigration law, as the fees 

increase for enforcement there’s also fee increases in fines and 

broader investigations for civil rights violations. 

So, we are looking for a way, you know, and we are looking for 

fast answers as well. You know, when you have people on the tentative non-confirmation, and we read in the paper of a member 

being sued by an employee because they fired him, the moment 

they got a tentative non-confirmation the reaction from the employer is, I don’t want anything to do with this, I want to fire the 

individual. And, we want to be able to get a fast and reliable response so the employer can either hire and keep the individual, or 

fire the individual. 

30

And, right now, on the Basic Pilot, this tentative non-confirmation that can go on forever doesn’t give you that security. 

Mr. LIPINSKI. Did you say there’s a 25 percent false negative? 

Mr. AMADOR. 20 percent of the first initial response is a tentative 

non-confirmation, that end up being later on confirmed as work authorized. And, we understand that the numbers have gone down, 

but we haven’t seen any new official data come out from DHS saying what the new number is. 

Mr. LIPINSKI. And, what needs to be done to change that? 

Mr. AMADOR. Well, the databases have to be improved, but the 

mechanisms and the procedures, as Calvert said, shouldn’t be just 

penalties and penalties, there should be incentives there, and there 

should be some form of default confirmations. 

You know, the employer at some point needs to feel confident 

that they use the system, they did everything they were told to do, 

and then they can rely that, you know, they are not going to come 

and do an investigation based on the tentative non-confirmation of 

employees they are by law not allowed to fire. 

So, there are many things that we recommend could be done to 

improve it, but one thing that we must point out again is that we 

are talking within the context of a comprehensive immigration reform. One of the things Congressman Calvert testified to was that 

there would be a cost to the economy to get out these workers from 

the economy right away, and I would expand and say, not just if 

you take them right away, if you take them out of our economy period. 

Mr. LIPINSKI. Mr. Lake, how long do you think it’s going to take? 

Mr. LAKE. I think hearing Congressman Calvert, who has a lot 

of experience with this, and put a lot of time into it, a seven-year 

period phased in, with largest employers first, makes sense. We’ve 

gotten 20 years in trying to adopt this, ten years since IIRIRA 

started the pilot. Let’s do it right. The problem if we don’t do it 

right is that small employers can’t get responses from the system, 

and they have the ongoing duty to try to follow up each day to get 

into the system, and meanwhile they are making new hires, and 

the problem is compounding. You are going to have system break 

down of its own weight, and it’s going to breed disrespect, and we 

are trying to make it work right. 

So, I think start with the largest employers, and I represent 

them, who want computer-based systems, who want to copy the 

documents electronically, who want to have electronic signatures, 

they are equipped to do it, and ready to do it, start with the big 

ones first, and gradually phase in. 

If there’s a capacity to do it more quickly, as the experience demonstrates, Congress can come back and, perhaps, accelerate it. 

Mr. LIPINSKI. Thank you. 

Chairman MUSGRAVE. Mr. Akin? 

Mr. AKIN. Thank you, Madam Chairman, especially allowing a 

guest in to your hearing. 

Chairman MUSGRAVE. Happy to have you. 

Mr. AKIN. When we voted on the Comprehensive Immigration 

Bill the end of last year, as a guy that used to work in business, 

and used to work for IBM, my understanding of what we were talking about, and maybe I’m wrong, was something that’s pretty 

31

straightforward for an employer. You simply call up, they have a 

prospective employee sitting there, they call up and they say, 

what’s your Social Security number, they check it and find out 

what his name is and his birthday is, and see if they all match. 

If they do, they can hire him. If they don’t, they say, we’re sorry, 

we’ve got some sort of a problem, you need to go talk to some government office. 

I was thinking of something that would be very simple, an immediate test, and second of all, that’s foolproof for many lawsuits, either from the government in terms of fines, or from anybody else 

who says you are threatening somebody’s rights, because every single employee, just do the same process. 

That was my concept of what they were talking about. Is that 

your concept of what’s going on, or are you talking about something 

where you hire somebody and later on try and figure out whether 

they are legal or not? 

Mr. AMADOR. If I may add, the House bill is written within the 

context of current law, so all of the other penalties still apply. They 

actually increased the penalties for civil rights violations, but they 

all fall within the INA. 

Mr. AKIN. What I’m talking about, could you ever have a civil 

right violation for doing that, what I just said? 

Mr. LAKE. I think, Congressman, the issue is this, as Mr. Divine 

from the Administration, who is implementing the system, talked 

about, you have citizens who are putting forth a Social Security 

card, and that’s more straightforward, and I think it’s the simplicity that you talk about. 

But, some of the discrimination lawsuits we’ve seen involve alien 

cards, which are also a part of the system, and which goes through 

the Department of Homeland Security’s database. And, as we 

heard from some of the witnesses previously, a lot of these cards 

either have temporary status, they are expired as a matter of law, 

but the person may not have a new document, and the government 

doesn’t get in the updates on the status as readily as they do, for 

example, on Social Security cards. 

And so, if an employer believes that a person is an alien and has 

an expired card, and terminates them, when, in fact, they are still 

legal, but it hasn’t gotten into the database, that’s when you are 

looking at problems that arise that raise the problem of discrimination. 

So, it’s a matter of the government having time to get the capacity up on the alien side, as well as the Social Security side, to make 

the system work, and that’s why we hope that it’s done right so 

that people aren’t discriminated against unfairly, and that employers don’t make mistakes that get them into that position. 

Mr. AKIN. And, you are saying that’s going to take seven years 

to get that up and going properly, is your guess? 

Mr. LAKE. I’m just relying upon the study of Congressman Calvert, who has looked at this issue, put a lot of time into it, was a 

small employer, and I think that’s a reasonable approach. 

Mr. AKIN. And, this system would apply to any American that 

wants to get a job, right? It makes it hard to say you are discriminating, because anybody that you are going to hire you are basically doing the same check on that. 

32

Mr. LAKE. It applies to any American citizen, as well as any 

alien, whoever it is, anybody’s warm body walks up, we are not discriminating against anybody. You just basically check everyone. 

Mr. AKIN. Okay. Well, I’ve heard similar estimates that that 

database is hard to—it’s a lot harder to bring it up and make it 

work than what it would appear that it should be simple on the 

surface, it’s not so simple. 

Okay, well, I think that answers you questions. 

Chairman MUSGRAVE. Thank you. 

Mr. Lipinski, did you have another question? 

Mr. LIPINSKI. No, I have no further questions. 

Chairman MUSGRAVE. I want to thank the panel for your very 

good testimony. You’ve given us good information today, and thank 

you for appearing before the Committee. 

This meeting is adjourned. 

[Whereupon, the Subcommittee was adjourned at 4:17 p.m.]

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