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S. HRG. 113–238 

THE IMPACT OF MANDATORY E-VERIFY 

ON AMERICA’S SMALL BUSINESSES 

ROUNDTABLE 

BEFORE THE

COMMITTEE ON SMALL BUSINESS AND 

ENTREPRENEURSHIP 

UNITED STATES SENATE 

ONE HUNDRED THIRTEENTH CONGRESS 

FIRST SESSION 

MAY 16, 2013 

Printed for the Committee on Small Business and Entrepreneurship 

( 

Available via the World Wide Web: http://www.fdsys.gov 
(II) 

COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP 

ONE HUNDRED THIRTEENTH CONGRESS 

MARY L. LANDRIEU, Louisiana, Chair 

JAMES E. RISCH, Idaho, Ranking Member 

CARL LEVIN, Michigan 

TOM HARKIN, Iowa 

MARIA CANTWELL, Washington 

MARK L. PRYOR, Arkansas 

BENJAMIN L. CARDIN, Maryland 

JEANNE SHAHEEN, New Hampshire 

KAY R. HAGAN, North Carolina 

HEIDI HEITKAMP, North Dakota 

WILLIAM M. COWAN, Massachusetts 

DAVID VITTER, Louisiana 

MARCO RUBIO, Florida 

RAND PAUL, Kentucky 

TIM SCOTT, South Caarolina 

DEB FISCHER, Nebraska 

MICHAEL B. ENZI, Wyoming 

RON JOHNSON, Wisconsin 

JANE CAMPBELL, Democratic Staff Director 

SKIFFINGTON HOLDERNESS, Republican Staff Director 
(III) 

C O N T E N T S 

OPENING STATEMENTS

Page 

Landrieu, Hon. Mary L., Chair, and a U.S. Senator from Louisiana .................. 1 

Risch, Hon. James E., a U.S. Senator from Idaho ................................................ 5 

Rubio, Hon. Marco, a U.S. Senator from Florida .................................................. 11 

WITNESS TESTIMONY

Poole, Sabrina, President and CEO, SERDI LLC ................................................. 3 

Judson, Rick, Chairman of the Board, National Association of Home Builders 3 

Burton, David, General Counsel, National Small Business Association ............. 3 

Kearney, Ryan, Manager of Labor and Workforce Policy, National Restaurant 

Association ............................................................................................................ 3 

Arensmeyer, John, founder and CEO, Small Business Majority ......................... 4 

Fiorille, Frank, Senior Director of Risk Management, Paychex .......................... 4 

Monaghan, Pete, Deputy Associate Commissioner for Data Exchange and 

Policy Publications, Social Security Administration ......................................... 4 

Lotspeich, Katherine, Deputy Chief, Verification Division, U.S. Citizenship 

and Immigration Services ................................................................................... 4 

ALPHABETICAL LISTING AND APPENDIX MATERIAL SUBMITTED

Arensmeyer, John 

Testimony .......................................................................................................... 4 

Prepared statement .......................................................................................... 55 

Burton, David 

Testimony .......................................................................................................... 3 

Prepared statement .......................................................................................... 36 

Fiorille, Frank 

Testimony .......................................................................................................... 4 

Prepared statement .......................................................................................... 57 

Judson, Rick 

Testimony .......................................................................................................... 3 

Prepared statement .......................................................................................... 34 

Letter dated June 4, 2013, to Senators Landrieu and Risch ........................ 35 

Kearney, Ryan 

Testimony .......................................................................................................... 3 

Prepared statement .......................................................................................... 38 

Report titled ‘‘2012 E-Verify Survey: Summary of Results’’ ......................... 39 

Landrieu, Hon. Mary L. 

Opening statement ........................................................................................... 1 

Lotspeich, Katherine 

Testimony .......................................................................................................... 4 

Biographical sketch .......................................................................................... 61 

Report titled ‘‘E-Verify Overview’’ .......................................................................... 62 

Map of States with Mandatory E-Verify Laws ...................................................... 71 

Monaghan, Pete 

Testimony .......................................................................................................... 4 

Prepared statement .......................................................................................... 59 

National Federation of Independent Business 

Prepared statement .......................................................................................... 74 

Poole, Sabrina 

Testimony .......................................................................................................... 3 

Biographical sketch .......................................................................................... 32 
Page

IV 

Risch, Hon. James E. 

Opening statement ........................................................................................... 5 

Rubio, Hon. Marco 

Opening statement ........................................................................................... 11 

The Main Street Alliance 

Letter dated May 28, 2013, to Senators Landrieu and Risch ....................... 72 
(1) 

THE IMPACT OF MANDATORY E-VERIFY 

ON AMERICA’S SMALL BUSINESSES 

THURSDAY, MAY 16, 2013 

UNITED STATES SENATE, COMMITTEE ON SMALL BUSINESS

AND ENTREPRENEURSHIP, Washington, DC. 

The Committee met, pursuant to notice, at 10:59 a.m., in Room 

SR–428A, Russell Senate Office Building, Hon. Mary L. Landrieu 

(chair of the committee) presiding 

Present: Senators Landrieu, Shaheen, Risch, and Rubio. 

OPENING STATEMENT OF HON. MARY L. LANDRIEU, CHAIR, 

AND A U.S. SENATOR FROM LOUISIANA 

Chair LANDRIEU. Good morning, everyone. Our Small Business 

Roundtable on E-Verify will come to order. I really appreciate your 

patience. Both while the ranking member and I were required at 

an earlier meeting and we could not leave or the business of that 

Committee could not get done. 

So, we got here as soon as we could, and really, really appreciate 

you all joining us this morning. I am going to start with just a 

short opening statement. This meeting will go until about 12:15, if 

you all can adjust your schedules to stay. If some of you have to 

leave at 12:00, I understand. 

Good morning and thank you for joining us for this roundtable. 

The purpose of today’s roundtable is to discuss the ramifications of 

the E-Verify program on small businesses as proposed in S. 744, 

The Border Security Economic Opportunity and Immigration Modernization Act of 2013. 

The central question we will consider today or some of the central questions are, one, is the E-Verify mandate in the bill before 

the Judiciary Committee workable and affordable for small businesses; two, how does the system currently work for large and 

small employers in states where it is mandatory now—and there 

are examples around the country. 

Three, are there effective alternatives to the E-Verify system 

that could be utilized by small businesses; and if so, what would 

they look like and how would they be shaped and designed? 

And finally, what suggestions do the participants in today’s 

roundtable have to make the E-Verify system as convenient as possible for small business owners? 

We have assembled here today a very impressive group of policy 

experts and small business owners to have a very informal exchange. This is not official hearing but, of course, our record will 
2 

go into the Congressional Record and will be submitted to the Judiciary Committee as they consider the markup. 

And so, what is spoken here, of course, is very important; and 

hopefully, it will be helpful to members of Congress as we move 

forward on this important piece of legislation. 

As the Senate Judiciary Committee considers S. 744, the goal of 

this Committee is to give a platform for small businesses to speak 

about issues that are of particular concern to them. 

And this has come up as I have traveled around the country and 

as people have come into my office there is a lot of interest in how 

the E-Verify system, particularly in its mandatory form, may affect 

small business. 

So, we wanted this morning to provide a platform which is one 

of the important roles of our Committee to discuss that. We will 

share the ideas, comments, and questions, as I said, with the Committees of jurisdiction. So, I thank you all for preparing your remarks today. 

As I mentioned, and the next week, I wanted to say, the Committee will host another roundtable focused on some different challenges faced by startups and small and medium size business relative to workforce training and the workforce gaps that are also 

part of the immigration reform bill. We just want to make sure 

that small businesses get their voice heard on these issues as this 

markup is going on. 

According to the Small Business Administration’s Office of Advocacy, there are 28 million small businesses in the country, including six million very small employers. Small businesses represent 

over 99 percent of all employer firms, are responsible for nearly 50 

percent of all private-sector employment, employing more than 55 

million workers and account for nearly 43 percent of all private-sector payroll. 

So, there is nothing small in America about small business. 

These businesses are not only critical to the Nation’s economic future but play a critical role in ensuring that those who are working 

in this country are eligible to do so. 

E-Verify, as the federal electronic employment verification program available to employers to validate an individual’s lawful employment status, provides the primary means for employers to do 

that. 

E-Verify is an online system that uses data from the U.S. Department of Homeland Security. That will be explained more later 

and how it works currently. 

At the federal level with the exception of federal contractors, including small businesses contracting with the federal government, 

participation in E-Verify is currently voluntary in most parts of the 

country. 

I am going to let you all discuss what is happening in Alabama, 

Arizona, Mississippi, and South Carolina. We will discuss that in 

the form of questions. 

So, let us get right into our panel discussion; and if each one of 

you starting with Ms. Poole will identify yourself and just say, you 

know, a word about yourself and your background and maybe a 

comment or two for a minute about the number one idea you want 

to leave with us today. 
3 

Ms. POOLE. Good morning—— 

Chair LANDRIEU. You have to speak right into the microphone 

and push your button to talk. 

Ms. POOLE. Good morning. I am Sabrina Poole. I am the President and CEO of SERDI LLC. SERDI is a small, woman-owned, 

8(a), certified IT consulting firm. We provide many services to the 

Federal Government and have a few commercial clients. 

I really want to discuss today and learn more about the impact 

of E-Verify on my business. We are looking at cost. We are looking 

at compliance issues with being compliant and not being fined. 

And, I hope to leave here today with more information and knowledge on how that is going to be fixed. 

Thank you. 

Chair LANDRIEU. Thank you. 

Mr. Judson. 

Mr. JUDSON. Thank you. My name is Rick Judson. I am a builder 

and developer from Charlotte, North Carolina. I am also the Chairman of the Board of the National Association of Home Builders 

which is about 140,000 member companies, by definition, the majority of which are small businesses. 

I also ran a large insulation contracting firm, subcontracting firm 

in 16 different states. So, dealing with some of the regulatory environments from different states was a challenge in its own right. 

But NAHB does support fully some sort of E-verification system. 

We want to make sure it is workable and economically viable, just 

as you pointed out earlier. So, I am glad to be here with you and 

hope to make some contributions. 

Chair LANDRIEU. Thank you, Mr. Judson. We really appreciate 

because the home builders are an important alliance in our country 

and will be right in the forefront of many of the aspects of this immigration bill. 

Mr. JUDSON. Thank you. 

Chair LANDRIEU. Mr. Burton. 

Mr. BURTON. My name is David Burton. I am the General Counsel for the National Small Business Association. We are opposed to 

mandatory E-Verify; but I think in the current political context, we 

are almost certain to get it. 

We have come up with a number of specific proposals to make 

an E-Verify system that will work better, work better for small 

businesses but also protect ordinary American citizens who are 

seeking employment in this country. E-Verify as proposed without 

amendment will affect literally hundreds of thousands of Americans adversely as they try to earn a living for their families. 

Chair LANDRIEU. Thank you so much. 

Mr. Kearney. 

Mr. KEARNEY. Good morning. I am Ryan Kearney. I am the Manager of Labor and Workforce Policy with the National Restaurant 

Association. Thank you for the opportunity to be here. We are 

happy to discuss this important subject. I would be more than willing to discuss an E-Verify survey that we released two weeks ago 

that shows very high satisfaction among our members that use EVerify. 

Chair LANDRIEU. Wonderful. Could you speak into the mic a little bit more please. 
4 

Mr. KEARNEY. Okay. 

Chair LANDRIEU. We will get back to the details but that would 

be terrific, and thank you so much. 

Mr. KEARNEY. Please do. 

Chair LANDRIEU. Mr. Arensmeyer. 

Mr. ARENSMEYER. Thank you, Madam Chair, and thank you for 

holding this roundtable. I am John Arensmeyer. I am founder and 

CEO of Small Business Majority. We are a national small business 

advocacy group founded and run by small business owners. 

We are here to make sure that any electronic verification system 

does not create undue burdens for small business owners and legally authorized workers. National scientific polling that we conducted in March shows that nine in ten small business owners 

agree that our immigration system is long overdue for a major 

overhaul and are eager to fix the broken system. 

Our primary job creators agree something must be done because 

immigration is good for America and good for small business. 

Chair LANDRIEU. We do not have to go into the statement now. 

Just something a short. That is fine. That is perfect. 

Mr. ARENSMEYER. Okay. 

Chair LANDRIEU. We will come back. 

Go ahead, Frank. Mr. Fiorille. Frank Fiorille. 

Mr. FIORILLE. Good morning. Frank Fiorille. I am the Senior Director of Risk Management at Paychex. Paychex actually has a 

unique perspective on this since we actually pay one out of every 

15 private-sector employees every two weeks. What I would like to 

see is how this group can strike the right balance of not having 

something overly burdensome for small business and yet an efficient solution to this problem. 

Chair LANDRIEU. Thank you so much. 

Mr. Monaghan. 

Mr. MONAGHAN. Thank you, Senator. I am Pete Monaghan from 

the Social Security Administration. I am Deputy Associate Commissioner for Data Exchange and Policy Publications. I am here to 

discuss our role in E-Verify, how we verify the Social Security number, and some other elements. I will be glad to discuss that in more 

detail. 

Chair LANDRIEU. Thank you very much. 

Ms. Lotspeich. 

Ms. LOTSPEICH. Thank you. Good morning. My name is Kathy 

Lotspeich. I am Deputy Chief for the Verification Division at U.S. 

Citizenship and Immigration Services. We run the E-Verify program in partnership with the Social Security Administration. I am 

happy to talk today about how the system works and to clear up 

any questions or confusion people might have about its operation. 

Chair LANDRIEU. Thank you so much. Excellent introductions. 

Senator Risch has joined us, and I explained that we were delayed 

because we both were needed for a quorum in an earlier meeting 

with Energy. 

Senator, do you want to say any just short opening statements. 

We are going to work until about 12:15. 
5 

OPENING STATEMENT OF HON. JAMES E. RISCH, A U.S. 

SENATOR FROM IDAHO 

Senator RISCH. Well, briefly, first of all, thank you all for coming 

today. This is not the primary jurisdiction of this Committee. It is 

the Judiciary and Rules Committee. In fact, they are meeting right 

now writing this bill. 

But we will have considerable input into them. Between the 

Chairman and I, if we have got parts of that bill that need to be 

changed, I think we have got sufficient horse power with the members of our Committee to do that. 

We are really interested in how this affects small business. One 

thing I want to explore as we get into this, we pass all these laws 

in America and law abiding American citizens agree to them. They 

are a burden to some degree. Every time we pass a law is a burden 

on somebody, some entity. 

How many people are going to avoid this, that is, how many people are going to, how many people are just not going to comply? 

That is always of concern to me, and I will be interested in hearing, Mr. Burton, your ideas on that and all of you who represent 

these small businesses. 

Mr. Burton, you have got a practical approach to this and that 

is it is probably coming one way or another given the current state 

of affairs in the country. So, how do we live with this, that is, how 

do we make it better? How do we knock the rough edges off of this? 

Mr. Arensmeyer, I am looking for you too to help us and all of 

you actually to help us with this, to make this as usable as it possibly can to small business because there will be some benefits with 

it too. 

Obviously, if you comply with E-Verify, then you are off the hook, 

that is, you do not have to worry about the Federal Government 

coming in and breathing down your neck and causing a problem 

which is a, which is always a problem for businesses that hire immigrants. 

So, with that, thank you so much all of you for coming and thank 

you, Madam Chair. 

Chair LANDRIEU. Thank you very much. Let us begin and we are 

joined by Senator Shaheen. Did you have any brief comments to 

begin, Senator? 

Senator SHAHEEN. No. Unfortunately, I am going to have to leave 

before the discussion is over but I am sure like the Chair and 

Ranking Member my interest is in hearing how you think this is 

going to affect small businesses and any changes we can make to 

make it easier for our small businesses. 

New Hampshire is a State that is primarily small business, and 

so, we want to do whatever we can to try and ensure that small 

businesses are benefitted and not harmed by what we might do 

around the E-Verify. 

Thank you, Madam Chair. 

Chair LANDRIEU. Wonderful. Okay. Let us get right into our 

roundtable. The process of these roundtables is very different than 

a hearing. I am going to throw out some questions. If you all want 

to respond, I will direct some questions to some of the panelists but 

please feel like if you want to jump in and if you do just put your 

sign standing up vertically and that way I will know to call on you. 
6 

We really want to have a good discussion and we only have an 

hour so we are going to try to get it as much as we can. 

I want to start, Kathy, if you do not mind with you. If you could 

do a three- or four-minute clear explanation as to the system that 

is in effect today which I understand you are primarily responsible 

for, one of the people responsible. 

It is a voluntary system as far as the U.S. government goes. It 

is mandatory, I understand, in a few states in the union. Those 

would be Arizona, help me here, Alabama, Mississippi, South Carolina with some exceptions. But it is currently a voluntary system 

with small businesses. Here is a map. 

But take four minutes and explain to us how the system is working now and to just kind of start our the discussion. 

Ms. LOTSPEICH. Certainly. Thank you very much. For reference, 

there is a power point. I will not stick to that but just know you 

can look at that if you want to look at screen shots or to take back 

with you. 

But basically, the employer asks the employee to fill out the 

Form I–9, which is that form that you must fill out to prove that 

you are authorized to work in the United States. You show documents. 

The employer then takes that form and enters information into 

the E-Verify system. That information is then sent to the Social Security Administration and to the Department of Homeland Security 

to check to see if there is a match. If that name, Social Security 

number, date of birth, citizenship status match. 

If that information does not match, then the system will send 

back what we call a tentative nonconfirmation. We call it a TNC 

for short, a tentative nonconfirmation. 

The employer then is instructed to inform the employee that they 

have a tentative nonconfirmation and they must follow-up with either the Social Security Administration or the Department of 

Homeland Security. 

Chair LANDRIEU. Currently, what is the percentage of noncompliance and are you getting more accurate as the system is being developed? 

Ms. LOTSPEICH. When you say ‘‘noncompliance’’ you mean people—— 

Chair LANDRIEU. How many are sent back to the employer that 

asks to—— 

Ms. LOTSPEICH. Right now about 1.3 percent, looking at this fiscal year 2012 data. 

Chair LANDRIEU. How many did you process in the year? 

Ms. LOTSPEICH. 21 million queries last year. 

Chair LANDRIEU. Out of 21 million queries last year, you only 

kicked back about 1.3 percent? 

Ms. LOTSPEICH. That is correct. 

Chair LANDRIEU. Can I assume that you all are learning more 

and more and more since we have had a little bit of this voluntary 

experience underneath our belts how to get that quickly back, because that is what I think the small business employers need to 

know? 

Ms. LOTSPEICH. The employer gets to an answer within seconds 

regardless. 
7 

Chair LANDRIEU. Seconds? 

Ms. LOTSPEICH. Absolutely. So, at 98.3 percent of the time in the 

fiscal year 2012, the employer got back an employment authorized 

response. So, they did not have to do anything more. They just had 

to record that response on the Form I–9 and store it for their 

records. 

If the answer that came back was a tentative nonconfirmation, 

the system automatically generates a letter for the employer to 

give to the employee that is pre-populated with all of the employer’s information about that, the employee’s information about that 

particular case and instructions on what they are supposed to do 

next. 

If the employee decides that they want to contest that tentative 

nonconfirmation, then they sign this letter, give it to the employer 

and the employer then refers that case either to SSA or DHS; and 

by referring, basically they press a button on the screen that says 

refer case. 

Once a case is referred, a time clock starts for eight federal working days. The employee then either has to go in person to the Social Security Administration and update any information or clarify 

any information that SSA needs in order to close that case as work 

authorized or in the case of a mismatch with Department of Homeland Security, then they can call on us at 1–800 number and fax 

us information or send us information that we might need to settle 

their case. 

Right now out of all the cases that E-Verify runs, about .3 percent of them are work authorize individuals who needed to go 

through this process. That .3 percent has been declining as we 

have had a study done and about five years ago it was more 

around .7 percent. So, we really tried to close that gap with having 

work authorized employees having to go through this process. 

There are a lot of reasons that a person could get a tentative 

nonconfirmation or data mismatch with E-Verify. For example, 

they might not have updated their name or citizenship status. 

There might have been an inadvertent error on their Form I–9 or 

the employer may have also entered information incorrectly into EVerify. 

And, do not forget that of this 1.3 percent that are not coming 

back with an employment authorized, those are also flagging people that are not authorized to work, and the majority of people that 

get the tentative nonconfirmation which is about almost 80 plus 

percent of them do not follow up with either SSA or DHS to rectify 

that. 

Chair LANDRIEU. Thank you so much. I am going to ask Mr. 

Monaghan to jump in here, Peter, if you would. And, we have been 

joined by senator Rubio, who is one of the lead sponsors of our comprehensive immigration bill, and Senator, before you came in, and 

thank you for your leadership. 

Our Committee is focused on, as the bill moves through Judiciary 

and it is being marked up today, our Committee is giving voice to 

small businesses for them to really be able to express either their 

support or nonsupport for the mandatory E-Verify that is in the 

bill. 
8 

Most people here are supportive although there are some that 

are not. But we are looking at all sides of that to see if, you know, 

the language in the bill that you have introduced with other colleagues should be improved or, you know, just answering some 

questions that some of the small business owners here. And Kathy 

just gave a good explanation of how it is working now on a voluntary. 

Senator Risch. 

Senator RISCH. Kathy, let me follow up with you for just a 

minute. I followed you all the way along and I think I understand 

it. The one question I have is: Once the employer sends in the information and says, I want you to verify, and you guys take it back 

and say, no, this person is not authorized, as I understand it, then 

you generate a letter and the employer is required to give that letter to the potential employee, the applicant. Okay. 

Then if the applicant is dissatisfied, they sign the letter and the 

employer has to return the letter to you, is that correct? 

Ms. LOTSPEICH. Not exactly. So, let me walk through that real 

quickly. 

Senator RISCH. Okay. Just that narrow area is where I am confused. 

Ms. LOTSPEICH. Yes. First of all, it is not applicant. It is already 

somebody that has been hired. So, they have been offered the job. 

They accepted it. They have gone through the Form I–9 process 

and now they are onboard. 

So, the employer gets a response. We never give a response saying this person is not work authorize. We give a response that says 

there is a mismatch with the data with the government, and the 

individual—— 

Senator RISCH. What is the employer supposed to do when he 

gets that? 

Ms. LOTSPEICH. The employer is supposed to give the employee 

a letter telling them that they need to follow-up with the government in order to rectify. 

Senator RISCH. Can employers say, I do not want to mess with 

this. You are fired? 

Ms. LOTSPEICH. No, they are not supposed to do that. They sign 

a memorandum of understanding with the DHS saying that they 

will issue this information to the employee and that the employee 

has the right to continue working while they are resolving the case. 

The employer may not terminate them. 

Chair LANDRIEU. Mr. Monaghan, can you add a little bit from the 

perspective of the Social Security Administration? 

Mr. MONAGHAN. Sure, Senator. 

Chair LANDRIEU. Speak into your mic if you would. 

Mr. MONAGHAN. Sure. As Kathy said, we receive the information 

from the system—name, Social Security number, date of birth— 

and we confirm this information. If we have citizenship information 

or lawful permanent residence information, we send that back also 

and E-Verify gives the employer the verification. 

If any of those items do not match, then we send back a tentative 

nonconfirmation. To fix that, hopefully the person comes in to our 

office with the non-confirmation letter and then notifies our employee exactly why they are there. 
9 

These cases typically involve a Social Security card fix. We do 

this all the time. In E-Verify cases we have to do a little bit more 

so E-Verify can notify the employer and stop the eight-day clock. 

So, the person comes into our office. They will need to provide 

some kind of proof to correct or update their record. For example, 

if the match failed because a person got married and never 

changed their name, they would come into our office, provide proof 

of name change. We would correct the record, stop the eight-day 

clock. 

Chair LANDRIEU. All of this has to be done within eight days. 

Mr. MONAGHAN. Right. 

Chair LANDRIEU. Under the proposed law? No? 

Ms. LOTSPEICH. Currently, yes. But under the proposed law, I believe they have made a wider window for that process. 

Chair LANDRIEU. Okay. Could somebody check to see what that 

is, on the staff, 30 days, et cetera? 

Do people have any questions about this? John, do you want to 

respond in any way to the current system that your members, some 

of your members are using, because, in fact, I mean, I am really 

coming at this neutral. I do not know a lot about this issue one way 

or the other. I am generally supportive of the immigration bill, but 

I do not have a strong feeling right now about the system one way 

or another. 

My State does not employ it so I am not that familiar with it. 

But what I can say broadly in my understanding is this could be 

a great help to small businesses who are currently having to take 

this load themselves to do some of this work on whether their employees have the right work permit or not. 

If the system can be put into place, it could be a great help to 

very small businesses that just push a button and they get a response back pretty quickly. I mean, I could see this as a benefit but 

I do not know. 

Senator RISCH. Madam Chairman, I agree with you 100 percent 

except that it could not only be a great benefit, it could be a real 

pain in the whatever for a small business. 

Chair LANDRIEU. To the business? 

Senator RISCH. Absolutely. 

Chair LANDRIEU. In what way? 

Senator RISCH. First of all, you know, to me, my philosophy is 

that this problem should not be the employer’s problem. This 

should be the employee’s problem. If this thing kicks back and says 

that you are not qualified to work, as far as I am concerned, I 

think that is the end of it for the employer. 

That is not the law today, I understand, but the burden ought 

to be on the employee, not on the employer. The employer has got 

a business to run. He does not want to get involved in—she is nodding her head yes—he does not want to get involved in somebody 

has come in and they say, well, you have got this. Well, now they 

want to be in talking to you for an hour a day when you are trying 

to make widgets. 

You know, that is the only problem I have with this. I agree with 

you. To me, the real benefit is if you can get the Federal Government off your back and you say, look, I got a number that says this 
10 

guy was cleared, get out, you know, and you are done with the federal inspector or whoever. 

Chair LANDRIEU. Now, remember, though, the way Kathy just 

spoke about it—I understand what you are saying. But the way 

Kathy just spoke about this, this is an employee that has already 

been hired by the employer so the employer must like this employee or they would not have hired them. 

And, I would imagine that if they hired somebody, they would 

like to keep them but maybe not—— 

Senator RISCH. Well, they like—— 

Chair LANDRIEU [continuing]. But also benefit—let me just say 

this—the benefit or the problem to resolve this is not with the employer. It is with the employee. 

If the employee cannot get their documentation correct, then the 

employer can let that person go within 30 days, after 30 days. 

And then I will get you, Jeanne. 

Go ahead. 

Ms. LOTSPEICH. Well, yeah, if they do not respond and rectify the 

case within that eight-day time clock, then—— 

Chair LANDRIEU. Eight-day time clock. 

Ms. LOTSPEICH. Yeah. But if there is a, the government—— 

Chair LANDRIEU. They can be fired. 

Ms. LOTSPEICH. Yes. 

Senator RISCH. Okay. With no liability to the company. 

Ms. LOTSPEICH. That is correct. 

Chair LANDRIEU. Okay. Let us talk about that. Jeanne, do you 

want to say something, Senator? let me recognize you. 

Senator SHAHEEN. To this issue, no. 

Chair LANDRIEU. Go ahead. Let me recognize you. Go ahead. 

Mr. BURTON. And you should evaluate the General Accounting 

Office’s report on this. It takes three months, on average, to resolve 

the typical tentative nonconfirmation. 

If you suddenly impose this on all new hires, that could easily 

become a year. Meanwhile, the small employer has to pay and keep 

this person on even though it is more likely than not that they are 

ultimately going to have to be discharged. 

Chair LANDRIEU. Okay. Let us talk about this. This exactly—— 

Mr. BURTON. There are a lot of other problems with E-Verify. It 

is not a simple, painless thing. There are things that can be done 

to make it better. 

Chair LANDRIEU. Okay. That is what we want to talk about 

today. 

Senator RISCH. That is what we want to get. 

Chair LANDRIEU. That is what we want to hear. 

Kathy, you respond. And then Senator Risch. Go ahead, Senator 

Risch, you first and then Kathy. 

Senator RISCH. You said, and that confirms what you said and 

that is that 80 percent of them do not even contact you to straighten it out, am I right on that, 80 percent of the kickbacks? 

So that—— 

Mr. BURTON. You have an easy out now. You go to an employer 

where E-Verify is not mandatory because in most states it is only 

federal contractors. So, you just go find someplace else to work. 

Right. 
11 

So, there is not going to be an easy out in this new regime we 

are talking about. Take the 1.3 percent number that she just said 

and that has not been independently verified. It used to be higher. 

All right. 

That means that with 50 and 60 million new hires a year that 

over half a million American citizens are going to get caught up in 

this bureaucratic morass to exercise one of their most fundamental 

rights, the right to work and earn a living and support their family. 

There is a need to make this fixed. There is the need to make 

it right, and we can do it. But right now the way this process is 

rolling, nobody is interested in making E-Verify work. 

Chair LANDRIEU. Hold on. Just a minute before you charge off. 

Mr. BURTON. I thought I was doing well. 

Chair LANDRIEU. The Senators and I would not be sitting here 

if we were not interested and you would never have been invited. 

So, the system may be rolling in other committees but our Committee is sincerely interested in a bipartisan way of hearing this 

so if everybody could just tap down a little bit. 

I know you’re feeling and so are we, you know, this is a big 

movement but that is what our Committee is for and I am very 

proud of our Committee to give voice to small business. 

If we can figure out some of these things, we most certainly will 

do so. So, let us try to be clear and specific. But I understand what 

you are saying. 

Right now because E-Verify is not mandatory, there are lots of 

people working in this country, not American citizens, people working in this country that should not be working in this country because they do not have a work visa to work but they are working 

anyway. 

And, there is a big movement in the country to make sure that 

American citizens get jobs and not people that are here illegally, 

at the same time balancing that with the needs of the workforce. 

And so, when this becomes mandatory, you are right. What happens is now, I guess, people that cannot get their documentation 

straight just leave that employer and go to someplace else where 

they will not be checked. But under the new system, everybody is 

going to have to be checked if this moves forward. 

Senator Rubio, did you want to add anything on this—— 

Senator RUBIO. Yes, couple of points. 

Chair LANDRIEU [continuing]. Because I really appreciate your 

views. 

OPENING STATEMENT OF HON. MARCO RUBIO, A U.S. 

SENATOR FROM FLORIDA 

Senator RUBIO. Right. And so, I think one of the, maybe perhaps 

what is creating a lot of consternation is we are looking at the existing system and saying, we are going to apply this existing system to the whole world and make you do it right away. 

So, let me just back up and say a couple of things about immigration reform. There will not be immigration reform without some 

sort of employer verification system, because, when we talk about 

securing the country, the magnet that does bring people in here il-
12 

legally is the desire to work. So, there is a need for some sort of 

system. 

We recognize the costs of it and, you know, we want to make 

sure this is not something that is so costly that people cannot use 

and also you have to scramble back and fix it. 

So, let me just say that if there are ways to make it better, everybody wants to make it better. But a couple of points I would 

say. 

Number one, we are not talking about suddenly requiring it of 

anybody. I have heard that term used a moment ago. Especially for 

smaller-sized businesses, there is a significant phase-in period. I 

think it is four years if I am not mistaken. Is it four? So, that is 

number one. 

Number two, our desire is not to create a mechanism to force 

businesses to do anything. It is to create a safe harbor so that basically if you end up hiring someone who turns out to have been here 

illegally, you can say I ran them through the system. Here are the 

papers I printed from that screen. They said this was their name. 

I ran it against this database and it said that they were okay and 

I have got a paper that proves it. 

That becomes a safe harbor for the employee, employer, I am 

sorry, to be able to protect themselves against what is going to be 

a significant increase in penalties for those who do violate the law 

in that regard. 

The last point, and the one you raised about people that are in 

this country that may get caught in the bureaucracy, so there are 

a couple of ways that we created a couple of safety valves in that 

regard. 

One of them is, if I am a U.S. citizen and I go apply for work 

and somehow I get caught up in a snafu where it is saying I am 

not authorized, I just produce a passport. That passport is a valid 

passport. 

That is the kind of good faith, de facto information that will 

allow you to overcome. The employer would have to make a photocopy of that passport, put it in the file and say the system kicked 

him back but we got this passport. This is their picture. That is 

the guy I saw, and that is why I hired them. 

Those are just one example and I know this is pretty detailed. 

I think it is one of the largest portions of the bill because of how 

detailed it is. 

But I appreciate you holding this hearing because this system 

has to work. I mean, it has to work for everyone involved. On the 

employer side, the enormous majority of employers are not in the 

business of hiring illegal aliens to work for them. They simply want 

a way to verify that, if we are going to require that, if we are going 

to create these penalties for people that hire those who are here illegally, then you have got to create a system that people can comply with so that they have a safe zone. 

Otherwise, you are at the mercy of what we have today which 

is somebody shows up with a Social Security card with someone’s 

name on it, they claim to be that person, and that is it. 

And if you hire them and it turns out that that is not the person, 

you could be in trouble even though you are relying on what looked 

like a valid Social Security card. 
13 

If we can make this right, it will be better for everyone but we 

have got to make it right and certainly we want to make sure that 

that happens. 

And I appreciate, I think this Committee is the logical place to 

take the lead in any changes that we need to make in the current 

language we have drafted to ensure that these goals that I have 

talked about are being met. 

Senator RISCH. Madam Chairman, first of all, Marco, we are glad 

to have you here. This is really important because, you know, we 

sit here in the halls of Congress and we draft these laws and there 

is all the language and, like you say, it is pages and pages. 

And yet, we all think, well, you know, this is how it is going to 

be. Mr. Burton tells us what happens. Every small business in 

America knows what happens when you get mixed up with the 

Federal Government, whether it is OSHA whether it is EPA, 

whether it is Homeland Security, whoever it is. 

What we draw up here, in our minds everything is neat and 

clean and orderly. But when the bureaucracy gets a hold of it, they 

start writing rules and regulations that we do not have any control 

over and it just becomes a nightmare for people, I mean. 

So, in any event, I think it is really important that we do hear 

these kinds of things and we do make it work as best as possible. 

Chair LANDRIEU. Senator Shaheen. 

Senator SHAHEEN. I understand that the current system is free 

to employers and maybe Senator Rubio can answer this question. 

What is being talked about in terms of the new system that will 

cover everybody, how is that going to be paid for? Is there going 

to be a charge to the businesses who participate? 

And my second question I think is for you, Kathy. I am sorry I 

cannot pronounce your last name. 

Ms. LOTSPEICH. Lotspeich. 

Senator SHAHEEN. Ms. Lotspeich. I think your answer to Senator 

Landrieu was about how many potential employees who are being 

checked out do not pass the E-Verify test. 

My question is: Do we have enough data to know what the inaccuracy is of E-Verify in its current form and can we extrapolate if 

we take it broader for all businesses what the percentage of accuracy is going to be? 

Senator RUBIO. Just on the cost side, so the bill, obviously there 

is a startup cost to enhance this E-Verify system so that it is accurate in terms of the information, because right now the bigger 

problem is if I give you a name, if I show up with a Social Security 

number that I bought from somebody and you run it through the 

system, it will say, yeah, he is verified but that is not me. And so, 

the system needs to be enhanced. 

That is being paid for through a series of fees and the fines that 

are being leveed on those who have violated our laws on the visa 

programs, not the small businesses that are utilizing E-Verify but 

on the visa programs that we are putting in place to create a fee 

schedule that help pay for the upgrades to E-Verify and the upgrades to the entry-exit tracking system as well for guest workers. 

Senator SHAHEEN. Can you answer on the accuracy piece? 

Ms. LOTSPEICH. Absolutely, yes. 
14 

We have seen an increase in accuracy for work authorized workers. So, about five years ago .7 percent of all queries were work authorized employees who had to follow up with the government and 

then were subsequently found work authorized. That has declined 

to about .26 percent, about .3 percent, since we have been working 

on enhancing the system in 2007. 

I believe the latter part of your question was whether or not we 

could extrapolate that to the broader population. I think it is challenging to do so because the employers that are enrolled in EVerify now are not necessarily a representative sample of all employers. 

However, I would say that of our employer base now, 81 percent 

of them have 100 or less employees on their payroll. So, we consider those to be smaller employers. 

Senator SHAHEEN. Thank you. 

Chair LANDRIEU. You wanted to say something? 

Mr. BURTON. Well, we talked about a number of things but one 

of the amendments being offered today by Senator Franken would 

establish an advocate’s office within USCIS, similar to the Taxpayer Advocate at the IRS and that would protect American citizens and small employers so that they could issue an assistance 

order if there is a mistake in the database and USCIS bureaucracy 

runs amok and that is one specific thing that I think deserves support from people who believe in E-Verify. 

There is also, I think, a need to re-evaluate the level of penalties 

in the proposal. The criminal penalties associated with E-Verify 

now are more comparable to what we would normally associate 

with violent felonies. 

They were 10 years; now they are five years. The penalties are 

up to $25,000 per violation and then following the White House 

proposal that was leaked, the current bill also would allow those 

penalties to be increased by the Administration potentially to as 

much as $75,000 per violation if there was a previous employment 

or other labor law violation potentially as little as $500. 

These are ruinous fines. It will destroy people’s life savings for 

failure to use E-Verify even if their employees were lawful. Just a 

failure to use E-Verify can destroy someone’s life; and there are a 

number of other things as well. 

The accuracy standards should be high. The USCIS, as you just 

heard, claims 0.26 percent. There has to be incentives in this bill 

for USCIS is to meet accuracy standards. 

They help everyone. They help employers. They help ordinary 

Americans. Those error rates are not very good compared to what 

you would normally see in the private sector. This is just a database matching program. They should be able to do better and there 

needs to be incentives for them to care. 

It was only when the GAO looked into this that they actually 

started to substantially reduce it. We need to put incentives in the 

bill. People respond to incentives. We know that. The same with 

government agencies. They respond to incentives. 

Chair LANDRIEU. Well, those are some excellent suggestions. 

And one thing, Senator Rubio, that, I mean, there were three or 

four very good suggestions that, you know, will be recorded from 

this roundtable. But one that came immediately to my mind is that 
15 

the penalties should be different for big businesses and small businesses. 

I mean, a $75,000 penalty to GE is absolutely nothing, and a 

$75,000 penalty to an employer that has two employees is literally 

life wrecking. So, I need us to consider that. Maybe there needs to 

be a penalty scale or something like that for small and large businesses. 

Mr. BURTON. The bill does contain graduated—— 

Chair LANDRIEU. Okay. Let us look at that graduated penalty 

piece. 

John, what are some of the thoughts that you can give and then, 

Rick, I am going to call on you to kind of add some things to this 

discussion. Your organization strongly supports the bill, and why 

do you not talk for a few minutes about why, for E-Verify. 

Mr. ARENSMEYER. First of all, I wanted to echo, I mean, we do 

support an enforcement mechanism. Our polling shows that small 

businesses across the country want an enforcement mechanism. I 

think the question is the devil is in the details. How is that enforcement mechanism working? 

I want to echo what David said. We are very concerned about the 

penalties, and we also do support the amendment to set up the office to help small businesses. 

I also want to pickup on this error rate. We do support the 

amendment, the bipartisan amendment by Senators Franken, Lee, 

and Hirono to actually delay implementation of the enforcement 

mechanism for businesses of fewer than 50 employees until that 

error rate does get back down or meets the current standard of .26 

percent, because I think we do not know what is going to happen 

when the system, it may be accurate that it is .26 percent now but 

once it starts to encompass the whole country with many more employers, I think it is going to be a bigger concern. 

So again, I mean, you know, there is huge support, bipartisan 

support in the polling that we just did across-the-board, more bipartisan support than we ever see for anything else, for immigration reform. 

It absolutely includes strong enforcement mechanisms but I 

think what is so important about you holding this roundtable here 

is that we do have to make sure that whether it is the penalties, 

whether it is the error rate and how that is going to impact small 

businesses, whether there is adequate support from the Federal 

Government, that those are taken into consideration as the enforcement mechanisms are set up. 

Chair LANDRIEU. Excellence. 

Go ahead, David. 

Mr. BURTON. Well, I appreciate the support. 

A number of other things that, I mean, there is one very good 

thing that Senator Rubio alluded to in the legislation which is a 

provision that would protect employers who made employment decisions based on E-Verify’s mandate from liability, and the language in the bill is superb on that front, and it is something that 

we had sought. 

But there is, however, I think something that we have not focused on and that people usually do not know. The current law and 
16 

the new law would prohibit employers from discharging people 

until they have gotten a permanent nonconfirmation. Okay. 

If, through the process of lodging an appeal, that can drag out 

for many months and potentially when we increased by a factor of 

12 the number of inquiries, by as much as a year. And yet, they 

are probably going to have to get discharged. 

So, the small employer is going to be very reluctant to spend a 

lot of money training a person, integrating them into their 10- or 

15-person company. We need to have a—— 

Chair LANDRIEU. I think that is a very legitimate point. So continue. 

Mr. BURTON. Senator Rubio indicated that the bill would allow 

someone that had been through the I–9 process and had a U.S. 

passport to, in effect, trump E-Verify. Well, while I believe that is 

a very good idea, I read the bill and I do not see it in there. I may 

be mistaken. It is obviously a long bill. 

I think it should be in there and I would support it being in 

there. We have proposed it being in there but I do not think it is 

in there. 

Chair LANDRIEU. Let us follow up on that. But what Senator 

Rubio said, I think, is an excellent answer to that problem which 

would be you could present your passport. End of discussion. Everything is fine. 

Senator RUBIO. I will just have somebody provide the language 

that cites that provision. If it needs to be improved, we can do that. 

But that is certainly the intent and we believe that is exactly what 

the bill will do to create that safety harbor for folks. 

Let me go ahead and let you finish because there is another 

point I want to make. 

Chair LANDRIEU. If I could just finish and then I will get you. 

I think we will provide that language regarding the passport. 

But in the event that a passport is not available, because not everyone has a passport, correct? That would be very interesting. 

How many Americans have passports? Who knows what percentage 

of Americans, adult Americans over 18 have passports? Does anybody know? 

Mr. BURTON. In the neighborhood of five percent. 

Chair LANDRIEU. Five percent. Let us find that out, please. 

Somebody google it, ask Siri—— 

[Laughter.] 

How many Americans over the age of 18 have passports, number 

one. 

Number two, if that is not sufficient, I think this issue of what 

happens when you do have an employee that has been hired that 

gets kicked back because their paperwork is not accurate, the burden that that could place on a very small employer. 

Now, this is what this Committee focuses on and no other Committee in the Congress focuses on this, Senator, and you are a 

proud member of this Committee. 

We are not talking about GE, IBM, you know, Exxon in this 

Committee. We are talking about 20 million businesses that have 

one employee or two employees or, you know, three employees. 

When you have one of your employees, half of your employment, 
17 

one person, that gets kicked back and you operate with two people, 

this is what we need to focus on. Okay. 

So, keep your eyes on this. Ten people, five people, 25 people, 

and how this is going to work for them. The big companies can figure this out. But this Committee is focused, and I am a passionate 

advocate for these small businesses. I have tons of them in my 

State. 

So, let us figure that out. 

Senator. Let me call on you and then, John, I am sorry, Rick. 

Senator RUBIO. You actually touched the point I was going to 

raise is I think the passport will go up as a result of hopefully more 

people getting passports. 

The other option that people have and we will share that with 

you as well is there are some states that comply with Real ID, not 

every state does, and we are not mandating that states do that. 

But if a state has a Real ID mandate and they can produce a picture identification from one of those states, that will also apply as 

de facto proof of legal status. 

So, we are looking for ways to address that issue particularly for 

those that are here. And then those who are here on non-immigrant status will also have documentation unlike what they have 

had in the past. 

So, those that do rely on, whether it is guest workers or temporary workers or, you know, people that are not permanently with 

status in the United States will also make it easier to identify with 

them. 

Then the key in all of this is to integrate the system. So, I just 

left a moment ago. I was watching the Judiciary Committee debate. 

So, one of the questions is, you know, one of the 40 percent of the 

people in this country illegally did not jump a fence. I mean, they 

came in on some sort of status that expired; they are still here. We 

do not know who they are because we do not track the exits. We 

only track the entries. That is going to change. 

So, what will happen hopefully in real time is that on day 61, 

if I am here on 90-day visa or what have you, on day 91 the system 

will automatically upgrade and on day 91 you will go from being 

an authorized or authorize to unauthorized. Hopefully, that will all 

be operating in real time. 

I did want to go through, real quickly, the implementation schedule. So, the folks who will be immediately required to have this in 

place, the Federal Government, the federal contractors. Critical infrastructure will be required to have it within one year, and there 

are some concerns about how that language is structured and we 

should visit that in a broader context. 

Employers with more than 5000 employees have two years to 

comply. Employers with more than 500 employees will have three 

years and Ag employees will have four years and all other employees, meaning those under 500, will have four years to comply. 

So, agriculture and basically small business will have four years 

to come up to this, and we think that is a pretty significant period 

of time to get the infrastructure in place. 

Chair LANDRIEU. Okay. Let me just comment on that and then, 

Rick, I want you to. 
18 

Under four years which would be terrific if it were all small businesses giving them some time. But, Senator Rubio, under critical 

infrastructure, you will have some small business owners, depending on how that is identified in the bill, falling under that which 

you pointed out we should be concerned about. 

In addition, some federal contractors are very small businesses 

because we really push our federal procurement officers to contract 

with small businesses. We may want an exception there because I 

do believe that the very small businesses should be at the end of 

the compliance chain. 

If they want to, that is fine. If they can do it mandatorily, I 

mean, they can do it voluntarily as they are doing it now. But until 

the system gets work through so that they get the benefit of having 

the most efficient, less cumbersome program, and I think you probably agree with that. 

So, let us look at that. And Real ID is embraced by 41 states, 

just FYI. 

Senator RUBIO. Almost all of them. 

Chair LANDRIEU. 110 million people over 18 years of age have a 

passport. So, that would probably be 50 percent of 18 year olds. 

Senator RUBIO. A lot higher than I thought. 

Chair LANDRIEU. A lot higher than I thought as well. 

So, you know, because some people, about a third of our country 

is under 18. So, I am just quickly dividing the rest. So, about half. 

So, about 50 percent of adults have passports and 41 states implement some form of ID. 

Senator, I will get you and then I really want Mr. Judson to say 

a word. 

Senator RUBIO. I just want for your staff and for yourself, on 

page 425 of the bill it will outline the Real ID and the passport. 

Chair LANDRIEU. You can come forward and read it. 

Senator RUBIO. We do not want to read that holding, do we? 

Chair LANDRIEU. This is very informal. You can sit there and 

read something or speak into the mic. 

Senator RUBIO. He has to text his mom to tell her he is on C– 

SPAN. 

[Laughter.] 

Chair LANDRIEU. Put the mic closer to you. 

Mr. BASELICE. It reads from page 424 to page 425, and it covers 

the covered identity documentation. It goes on to say it is a United 

States passport, passport card, or documented evidence of lawful 

permanent resident status, or employment authorized status issued 

to an alien. 

Mr. BURTON. Well, that is in the I–9 process. It is the same as 

current law. 

Mr. BASELICE. But we are getting rid of the paper I–9 and moving to electronic form of I–9 as opposed to just having the same 

paper documents that you will have moving forward in the E-Verify 

system. 

Mr. BURTON. That does not, on the face of it, address the question. All employers still have to go through the I–9 process which 

is always involved in some sort of type A or type B identification. 

Type A being a passport or a permanent resident card. Type B 
19 

being Social Security card or something similar like that. That has 

not really changed. It is just changed in form not substance. 

Now, let us hypothesize. The USCIS E-Verify says this person 

gets a TNC. All right. What we need to have is a rule that says 

if they have a blue passport, they are good to go. All right. In effect, that a type A identification trumps an E-Verify TNC. 

You might want to require that the employer notify USCIS that 

there is this problem with their database. But the presumption 

should then shift so that the employer and the employee are lawful 

unless USCIS can disapprove it, because the State Department has 

issued that person a passport. All right. And that is not the way 

the law is. 

Chair LANDRIEU. That is a very good point. The benefit, if you 

produce a passport issued by the United States, the burden of proof 

should shift away from the person with the passport to, you all can 

fix that. 

Senator RUBIO. Yes. That is easy. I do not think that would be 

controversial. 

Chair LANDRIEU. It is easy to fix and that is a very excellent suggestion, not that we can amend the bill in this Committee but Senator Rubio has a little bit of an inside track. 

Senator RUBIO. Well, I think these are the kinds of things that 

I—have they dealt with that part of the bill? When are they going 

to take amendments up? 

Mr. BURTON. Today. 

Senator RUBIO. They are in the midst of that today. So, I think 

there is still time for those sorts of amendments. 

Chair LANDRIEU. Well, there most certainly is time, because 

there are going to be amendments on the floor in this bill and this 

bill is just, you know, with all due respect to the Senator who is 

a cosponsor of the bill and is moving through the Judiciary Committee, the rest of the Senators are going to have a lot to say about 

what happens when this bill hits the floor, and it is not just going 

to be put in a package and rolled on out of here. 

So, we are going to collect a lot of information on this Committee; 

and if it can get marked up in the Judiciary Committee, fine. But 

I am sure it is not going to be perfect when it comes out of Judiciary. It can be amended on the floor. 

So, that is a very good suggestion and it is minor but important, 

and that is what we are hoping to give you some confidence that 

we really do want to listen to many, many different views of small 

businesses. 

Rick. 

Senator RUBIO. I just wanted to echo what you said. I always 

viewed the bill as a starting point that because it is so complex and 

involves the entire country. This is an issue that impacts the entire 

country. 

I would just actually say that the, I would, even though we are 

under this jurisdictional issues in play, I would encourage and will 

work with, after this conversation with whomever the stakeholders 

are and your staff. 

I think it would be very powerful if there were amendments that 

we could help come up with from the Committee through your staff 

and we could actually say this is a Small Business Committee 
20 

amendment basically, or suggestion. I think the folks on Judiciary 

are looking for that kind of input since their expertise is not—— 

Chair LANDRIEU. Exactly. And that is exactly why we are having 

this as the first of three roundtables on points in the immigration 

bill and, Senator, how we present that to you and the cosponsors 

and to Senator Leahy who knows and has blessed this roundtable, 

we do not know whether we will do it in the form of an amendment 

or do it in the form of a letter to you all with sort of strong signatures from both sides of our Committee, and you are a member of 

this Committee. 

So, I am really hoping for your leadership and I know you have 

a lot on your plate. So, we will get as much to you as we can. 

But, Rick, I want to really calling you and then Ms. Poole I will 

get to you. Do you want to jump in on any of this, Mr. Judson, your 

members and how, listing to all of this, how do you think your 

members are going to feel? Are they going to be happy about EVerify, pushing buttons and getting immediate response; and do 

they trust that that system can work that way? 

Mr. JUDSON. Thank you, Madam Chairman. Thank you both for 

what you are doing. I think you recognize the bureaucratic impact 

this could have on small business versus small business or large 

business versus small business. I think if you look at our membership which is almost 150,000 member companies with an average 

employee base being about eight people, they do not have HR departments. They work out of wherever they are. 

Chair LANDRIEU. Right. They work out of the trunks of their cars 

and their pickup trucks. 

Mr. JUDSON. They do. But I think it behooves us all to have a 

comprehensive immigration policy. Something we can live with and 

work with. That is affordable, practical, pragmatic. 

One of the things that I think is important in that and I could 

spend the rest of the hour with it. But there are six right bullet 

points. I will be glad to get a copy to you and Senator Rubio before 

this day is over, to make the systems work more logically as opposed to why they will not work. 

Chair LANDRIEU. Perfect. 

Mr. JUDSON. So, I will be glad to get that to you. But they have 

all been addressed to some degree. The safe harbors if you do the 

right thing, if you are trying to do the right thing. 

The issues of what his employer-employee relationship. The fact 

that you could verify at the initial date of offering of a job offer as 

opposed to waiting three or four or five days when the person 

shows up and you may be hiring an illegal unintentionally. So. But 

I will get those points to you and I think they are intended to be 

contributory and constructive. 

But I think we, as an industry, support the fact that we are 

going to be able to hire people legally. Our industry is in desperate 

need of labor but we want to make sure that it is done properly. 

This is the point that I made three weeks ago to your larger Senate 

immigration hearing here. We want to be a contributor. 

Chair LANDRIEU. Wonderful. And that is very excellent. For those 

of you that are opposed to it, I would love to see you come to the 

other side; but even if you cannot and stay on the side opposed, 
21 

give us some good suggestions because the bill may move and it 

may not. Who knows. 

I mean, I think there is a lot of political power on both sides 

moving it forward. But, you know, until the bill is finally passed 

and signed by the President, it is not the law. We have the time 

to improve it. 

And, I am going to stay focused like a laser on how this bill is 

going to affect 25, you know, employers of 50 and less to try to get 

it, if it is going to get signed it into law, in the least intrusive way 

and the most helpful way possible to them, because I really believe 

in small business in America and so do most of the colleagues that 

serve on this Committee or we would not have signed up for it. 

Mr. BURTON. Most aspects of this legislation we support. It is EVerify that is our primary concern. 

Chair LANDRIEU. Okay. And we are trying to try to fix it if we 

can. 

Mr. BURTON. We want to do things to make it better. 

Chair LANDRIEU. Yes. Thank you very much. 

Ms. Poole. 

Ms. POOLE. As a small-business owner, I support E-Verify because I am a federal contractor; and although it is not mandatory, 

as we stated, when I get a statement of work from the government, 

the government has now put in that compliance requirement in the 

statement of work. They want to make sure that we are liable to 

use E-Verify on the employees that we will place on the contract. 

Chair LANDRIEU. And you are already required to do that? 

Ms. POOLE. Yes. And I want to make the point clear. It is already 

in the statement of work coming down from the Federal Government. 

I am a federal contractor. I only support the Federal Government 

which means that when I get a statement of work, I must do what 

they tell me to do in the statement of work or else I lose my contract and I get a very bad past performance rating that the whole 

world can see. 

Chair LANDRIEU. But hang on. How could we help you in this 

new system to take a little bit of that burden off of you, because 

now the burden is going to almost shift and maybe it is different, 

I know it is different for federal contractors now. 

But is there any way that this immigration bill can help federal 

contractors like small business contractors giving them less burdensome paperwork or accountability that you can see, Kathy or 

Peter, or is their status going to stay the same? 

I mean, right now, and if I am wrong, forgive me. Right now, it 

is voluntary for the country. Nobody has to do it except small businesses that are federal contractors. Correct? 

Ms. LOTSPEICH. And some states where they require it. 

Chair LANDRIEU. Okay. And some states. Minor. Correct? 

Ms. LOTSPEICH. Yes. 

Chair LANDRIEU. So, my question is: Is there anything that you 

can see in this bill that we are drafting that could relieve them of 

some of the burden that they have right now? 

Ms. LOTSPEICH. No, because they are being asked to use it now 

and they would be asked to use it then. And I did not hear anything—— 
22 

Chair LANDRIEU. You are using the same pushbutton system 

now? 

Ms. POOLE. Yes. 

Chair LANDRIEU. So it works for you. 

Ms. LOTSPEICH. I did not hear any issues you are having. 

Ms. POOLE. As a workaround solution, what we are doing which 

may get us in some compliance laws with DOL, the Department of 

Labor, we are trying to hire only cleared employees which eases 

the burden of any discrepancies with the E-Verify system. 

So, for example, if I am placing folks in a federal contract, you 

have to have an MBI which is a minimum background investigation to come work for me. 

So, when I am interviewing you to put you on the federal contract, that is what I asked you. 

Chair LANDRIEU. Okay. But why cannot when a person walks in 

to comply with your contract, you just press a button and get the 

information whether they are clear or not? Why is that not working 

for her? 

Ms. POOLE. If a person—— 

Chair LANDRIEU. Okay. Hold on just one second. 

Kathy, why is that not working for her? 

Ms. LOTSPEICH. I mean, I am afraid you are going to have to ask 

her. I do not know. She did not give any specific reasons. 

Chair LANDRIEU. Okay. Go ahead. 

Ms. POOLE. If you are cleared, the government has a system 

called JPAS which is through DOD. So, before I hire you, I go into 

JPAS, and have my HR department check you by Social Security 

number and they will see in JPAS when you had a minimum background investigation, if you have a top secrets, which agency 

cleared you. 

Chair LANDRIEU. So, is this because she is a DOD contractor that 

she has a different system than all other small businesses, working 

with different agencies? 

Ms. LOTSPEICH. What she is talking about is not related to EVerify so I am not sure. 

Ms. POOLE. Well, it is. 

Senator RISCH. Do you guys recognize that system, though? 

Ms. LOTSPEICH. No. 

Senator RISCH. If you are qualified with that system, does it 

work with—— 

Ms. POOLE. That is my question. That is what I am saying. If 

they qualify that is another thing that you pointed at. If they qualify and they already have a TS clearance and they already have a 

background check—— 

Chair LANDRIEU. Right. They should not have to go through 

twice. 

Ms. POOLE. Exactly, because DOD does an extensive two-year 

background on a person. 

Ms. LOTSPEICH. Okay. I mean we, the regulation was issued by 

the FAR. We did not issue that regulation. 

Chair LANDRIEU. What is FAR? 

Ms. LOTSPEICH. The Federal Acquisition Regulations. It is part 

of the Federal Acquisition Regulations. 
23 

Chair LANDRIEU. Let me suggest this. I am going to suggest that 

after this meeting you all talk and get together and see if we can 

submit something from you, not from small business, recommendations to this Committee to either—if she has got to go through this 

now and she says it is not a big problem but she has to go through 

it, then we want this excepted under the new system for all of 

small business contractors working with DOD. We do not want 

them to have to do two. We will talk later. 

Ryan, go ahead. 

Mr. KEARNEY. I just wanted to echo Rick’s comments. You know, 

with the survey that we have, we already see that half of our corporate-owned chains use it. The satisfaction among both corporate 

chain users and small business users in about 80 percent. 

So, it is a high satisfaction level. But when you really get down 

to the details of small businesses and who uses it, it is really about 

23 percent. So, if you look at those—— 

Chair LANDRIEU. Okay, 23 percent of small businesses are voluntarily using. 

Mr. KEARNEY. That is correct. 

Chair LANDRIEU. Tell me now again, 23 percent of small businesses in America. 

Mr. KEARNEY. Are early adopters of E-Verify. 

Chair LANDRIEU. Are early adopters. 

Mr. KEARNEY. Of restaurants. 

Chair LANDRIEU. Of restaurants? 

Mr. KEARNEY. Yes. 

Senator RISCH. What do you call a small business? 

Chair LANDRIEU. And what is a small business, under how 

many? 

Mr. KEARNEY. Probably 25 I think is what our survey put out. 

But my point in this is if you look at the three quarters that do 

not use it, the overwhelming response on why is because they do 

not have a dedicated HR professional. 

Again, these are restaurants. A lot of restaurants do not even 

have offices or WiFi. So, again, I kind of want to stress what Rick 

said he is if we are going to have a new E-Verify system or we are 

going to make improvements to it, we need to limit the burdens. 

Chair LANDRIEU. Exactly. What I—and I think Senator Risch 

and I are going to be together on this. While I am a supporter of 

comprehensive immigration reform, I am not going to support a bill 

that is overly burdensome to small business. 

So, I am going to really focus on this as this bill moves forward. 

Let us talk about this for a minute. We do not want an HR office 

in every small business in America. We want this on a mobile app. 

We want them in their pickup truck, somebody they are hiring out 

on their ranch, they need somebody to do some work, we want it 

on a mobile app, hit a button, put the information in and it comes 

back immediately. 

And we want to minimize the impact on these businesses. I am 

not interested in setting up, you know, for every farmer in America 

or every, you know, person in America to have to set up a big, complicated system. 

Now, we have four years under the current bill, let me finish, we 

have four years under the current bill for small business to comply. 
24 

So, it is not like this year, six months they have to. But we can 

really start working on that now to minimize the impact if we work 

hard on it. 

Go ahead. 

Senator RISCH. I apologize. I had to step out. 

Chair LANDRIEU. Go ahead. 

Senator RISCH. Have you had a discussion about, and this is just 

a rumor. I heard that they have been talking about eliminating the 

ability, the option to pick up the telephone and call as opposed to 

using the Internet. 

Have you had any discussion about that? 

Chair LANDRIEU. Has anybody heard anything about that, about 

not being able to use the telephone? 

Mr. KEARNEY. The toll-free telephoning option is included in the 

legislative text. 

Senator RISCH. Is in the current text? 

Mr. KEARNEY. That is correct. 

Senator RISCH. Okay. 

Chair LANDRIEU. Toll free. 

Mr. KEARNEY. In both S. 744 and The House Legal Workforce 

Act. 

Senator RISCH. Is that important to you? 

Mr. KEARNEY. That is very important. 

Senator RISCH. Mr. Burton, is that important to your people? 

Mr. BURTON. It is not something that the members that I have 

talked to, which has been a lot, have talked a lot about. 

Senator RISCH. It will now. 

It is for somebody who does not have a computer. It will be very 

important. 

Mr. BURTON. Right. But in this day and age at least most of the 

guys who are involved with us in terms of giving us input probably 

do have computers. So, I mean it makes a lot of sense to me. Do 

not get me wrong. It is just not something I have heard a lot about. 

Chair LANDRIEU. Okay. Go ahead. I am sorry, Ryan, did you finish. I want you to finish and then please, Frank, because we only 

have about 15 more minutes. 

Mr. KEARNEY. Okay. I will be very brief. Just adding to the telephonic option, I mean, think of sort of your average small restaurant, your corner restaurant, you do not necessarily have an office or maybe a computer. It depends. The ability to have that tollfree number at zero cost to the employer is important to us. 

Chair LANDRIEU. Okay. Frank and then John and then Ms. 

Poole. 

Mr. FIORILLE. I just wanted to bring up the point on this. 

Chair LANDRIEU. Put the mic closer to you. 

Mr. FIORILLE. The burdensome for small businesses and that. 

The businesses always have the option to outsource that. For example, small business do not want to do payroll. They do not want 

to worry about the compliance stuff. They can outsource that to a 

company like Paychex. So, I think these small businesses always 

will have that option to do something like that. 

The other example I would like to mention to is this reminds me 

of my background is in banking. And when banks put in the AML 

OFAC screening processes, back then there were a lot of issues in 
25 

the beginning but they all got worked out to where the process over 

years got very smooth and is very well run. To me it is very analogous to that. 

The last point I want to make, what we did not really mention, 

I do not think, is the self-check process that they can do. So, the 

employees can actually go in and kind of get almost like 

preapproved, if I am correct, to be self-checked on this. Is that correct? 

Chair LANDRIEU. Kathy is that. She is saying no. Go ahead. 

Ms. LOTSPEICH. No. You can check yourself but you cannot take 

that to your employer. Your employer still has to verify that. 

Mr. FIORILLE. But you can do it, right? You can go ahead and 

check yourself, right? 

Ms. LOTSPEICH. Yes, you can check yourself. 

Mr. FIORILLE. So, maybe there is some improvement in there 

that we could work on. 

Chair LANDRIEU. That is interesting. Also knowing that when 

you were out, Senator, we found a good thing that half the adults 

have passports, more than we thought. Half the people over 18 approximately have passports. And that if we put a passport, if you 

get into a jam and you can produce a passport, we could write the 

bill that it would clear you immediately. 

Senator RISCH. Is that in the text now? 

Chair LANDRIEU. Well, they are working on it. Senator Rubio 

does not, he says it is but it might not be as specific as it should 

be. So, that is kind of a good idea. 

Senator RISCH. And a passport would cure all ills. 

Chair LANDRIEU. It could. That is one of these suggestions. Now, 

what the Judiciary Committee will think about this or what other 

Senators will think, but I think it is kind of an interesting thought 

because that is a document that has been given a lot of attention, 

before you are given a passport, about your status. And if we do 

not trust our passport system, there is something wrong. 

And so, we can shift the burden to the government and not have 

a citizen that has a passport been told, well, you cannot work. 

Well, I have a passport, you know, that has my status on this. 

So, I think that is something that we could really help with. 

John, and then I will get you Ms. Poole. 

Mr. ARENSMEYER. Just really quickly, I wanted to just, a couple 

of other points from our scientific survey of small businesses. On 

our survey 15 percent use E-Verify or a similar system, and only 

one in four said it was easy to use. 

Chair LANDRIEU. Wait. Only one in four said it was easy to use? 

Mr. ARENSMEYER. Said it was easy to use. 

Chair LANDRIEU. This is not good. 

Mr. ARENSMEYER. Right. Well, I mean, what I think it says is we 

have a lot of work to do. 

Chair LANDRIEU. Well, that is what we want to focus on. So, can 

you give us some interesting feedback from them about what would 

make it easier for them? 

Mr. ARENSMEYER. Yes. We did not really delve into the details 

but we may do that. 

Chair LANDRIEU. Well, please do, and the faster you can do that 

with your networks the better because—— 
26 

Senator RISCH. They ‘‘why’’ is real important. Why is it not working? 

Chair LANDRIEU. Why is it not working and, you know, because 

I really. I am just going to speak for myself. I am really going to 

focus, as I said five times this morning, on this immigration bill as 

it moves through and its impact to small business, and the better 

information, the quicker information I can get from networks that 

are both for the bill generally and against but how it could be improved the better I will be able to help and the members of my 

Committee will be able to help. 

Mr. ARENSMEYER. Just real quickly. I mean we just skirted over, 

David talked a little bit about the penalties. I mean the penalties 

are really, really extreme including what is it now? Five years. I 

mean I understand this would not be applied all the time but a potential five-year jail sentence. I mean, there does need to be, we 

recognize there needs to be enforcement with teeth. I mean, if you 

do not have teeth, it is not going to work. 

Chair LANDRIEU. If anybody tries to put a small business owner 

in jail like in the next year, this Senator will probably lose it. 

Okay. I know him well enough so I mean we better be careful before we start putting people in jail. 

Mr. ARENSMEYER. And the other related, not quite as extreme 

thing is that, and again David talked a little bit about this, the 

practicalities as we are talking about all of this and this is why we 

are really pleased you are holding this roundtable, because sometimes, you know, people do not recognize that a lot of the 

practicalities that we are talking about are just impossible for 

small businesses. 

Chair LANDRIEU. Exactly. 

Mr. ARENSMEYER. In fact, having an employee in limbo, I mean 

as a longtime small business employer, somebody who runs a profit 

now—— 

Chair LANDRIEU. You cannot do that. You cannot have an employee in limbo for more than 24 hours. 

Mr. ARENSMEYER. It does not work. 

Chair LANDRIEU. It does not work for a small business owner. It 

might work, like I said, GE and IBM, they could have 100 employees in limbo. They would not even flinch. 

Mr. ARENSMEYER. Right. 

Chair LANDRIEU. But when you are running a small business 

and you only have to be people that work for you, having one person in limbo is a big deal. 

So, let us focus on the limbo piece and how we can fix that and 

let’s focus on jury members saying it is too complicated and what 

we can do. 

And let me get Ms. Poole and then I will get you, Senator. 

Ms. POOLE. Real quickly. I would like to see three things come 

out on this whole discussion. For me as a federal contractor, the 

burden should be on the employee, not the employer, because right 

now everything I bid is lowest price, technically acceptable. If I 

have to lower my profit margin to stay afloat so I do not sink as 

a small woman-owned business, then I also have to keep the employee on the payroll until this thing happens and I can not bill 

him to the government. And if I fire the employee, I may go to jail. 
27 

So, I really would like to see something come out of that. 

Chair LANDRIEU. You need help. 

Ms. POOLE. Yes. 

Chair LANDRIEU. You need help. We are here to try to help. 

Ms. POOLE. Thank you. 

Chair LANDRIEU. Anything else you want to add? 

Ms. POOLE. That is basically it. Thank you. 

Senator RISCH. Well, let me say that, first of all, and, David, to 

you and to others who have reservations like myself, this is the one 

shot we have got because when this bill was drafted, my experience, I did almost 30 years in our State senate, and as with every 

law, what you just talked about the law of unintended consequences comes back and bites us more often than not. 

At the State level we fixed them every year. This outfit never 

fixes these things. They pass the monumental 3000-page bills and 

not only is the bill a wreck but then the thousands of pages of regulations that follow it come out and they are nothing like we intended at all. 

So, the language of the bill needs to be specific. It needs to tell 

these agencies what they can and, more importantly, what they 

cannot do. 

So, now is our chance and we have got to be serious about this 

because if this thing does go, we are all going to have to live with 

it. So, we need to be really serious about looking for the unintended 

consequences in here and how it is going to attack us. 

Thank you, Madam Chairman. 

Chair LANDRIEU. Thank you. And we are going to have comments from those who have up. Go ahead, Ms. Poole. 

Ms. POOLE. No. 

Chair LANDRIEU. Done. Okay. If you could put your little marker 

down. 

Mr. Judson. 

Mr. JUDSON. Senator, your comment of unintended consequences 

is very accurate. We have encouraged our members whether they 

have to or not to try to use the E-Verify system, want to get familiar with it. Something is coming and we want to be on the cutting 

age with it. 

But I think the biggest concern they have across-the-board is 

that of accuracy. If it is .26 percent or 2.6 percent or 26 percent, 

that is quite a variance. If we are going to use it, if we are going 

to have something, we make sure that it is covered properly. It is 

accurate. That if we hire someone, that person is legitimately employable and we can begin a training process, because in our industry these are entry level jobs for the most part and that is where 

the immigrants are starting. That is where even our own domestic 

labor is starting with the opportunity to learn a trade. 

So, we make an investment in these people and we want to make 

sure they are being hired properly. To do that, we have to start 

with the premise that the information we receive from the E 

verification is accurate. 

Chair LANDRIEU. Okay. I am going to come back to you to do see 

if our idea of a mobile app is in your plans to develop one. 

Mr. Burton. 
28 

Mr. BURTON. I just wanted to mention a couple of quick things. 

First of all, to emphasize John’s discussion of the penalties, even 

a first-time violation is $2- $5000 per violation, all right, for not 

using E-Verify in the latest bill. It has been higher. 

But that means that if you, say, had 10 employees and your employees are all legal, you just did not use E-Verify, that you are potentially on the hook for a $50,000 penalty for the first time you 

did not use E-Verify. These penalties really, I think, show a lack 

of perspective in terms of what they can do to a small firm. 

Chair LANDRIEU. So, in the bill there is a penalty for not using 

E-Verify? 

Mr. BURTON. Uh-huh. 

Chair LANDRIEU. In the bill. 

Mr. BURTON. Correct. 

Chair LANDRIEU. Okay. And there are also penalties, well, for not 

using it and they are graded up. Okay. 

Mr. BURTON. Penalties for hiring unauthorized workers but for 

just—— 

Chair LANDRIEU. But they are hard different penalty is for different, okay. 

Mr. BURTON. In point of fact, probably it would be imposed concurrently. 

Senator RISCH. Should not the room rule be no harm-no foul, 

that is, if you hired somebody whether you use E-Verify or did not 

use E-Verify and the person is perfectly legitimate person to 

work—— 

Mr. BURTON. We would be absolutely fine with that. 

Senator RISCH. That would seem to me, I mean, that is common 

sense and that does not always work in Washington, D.C., but that 

is a common sense approach to this thing. No harm-no foul should 

be the law. 

Mr. BURTON. I just also wanted to make you, Senator Landrieu, 

the wait is not going to be a couple of days. I mean, GAO has determined that now it is on average three months which means 

many times it is more than that. 

Once we increase by a factor of 12 a number of people going 

through this system, it is going to be very long. It is not going to 

be simple. 

Chair LANDRIEU. We are going to try to make it better. Go 

ahead. 

Mr. BURTON. The other thing is that we need to have independent evaluation of this. I mean, I am sure you see this all the 

time in your oversight capacity. Unless GAO or the Inspector General, someone else is evaluating the error rates, you are going to 

be told one story rather than another. 

Chair LANDRIEU. Correct. We do not want them evaluating themselves. 

Mr. BURTON. That is correct, and then we need to have actual 

consequences and standards. So, standards as to what the error 

rates should be and then consequences if they are not. 

You know, I have some ideas of what the standards should be 

but the consequences could easily be simply that they do not apply 

to the smallest businesses because those are the businesses that 
29 

are going to have the most adverse consequences when you have 

unjustified errors in the system. 

Chair LANDRIEU. Thank you. Kathy, will you respond and then 

we are going to wrap up and have some closing remarks. 

Ms. LOTSPEICH. Sure. Thank you very much. 

I just wanted to say, you mentioned a couple of times about 30 

days or three months for resolving a TNC. That would be a very, 

very extreme case. I just wanted to let you know that the average 

right now for resolving a TNC with the Social Security Administration is 3.4 days, and the average with resolving one with the Department of Homeland Security is 5.6. 

Chair LANDRIEU. Okay. Averages are important and I want to 

say this because if Bill Gates, when he was worth $40 billion, I 

think he is worth a lot more than that. But if he walked into a 

homeless shelter, you know, one day and there were 39 other men 

there, the day before he got there their average would be, you 

know, zero. 

And if he spent one night in the homeless shelter and you took 

an average, their average would be, you know, $1 billion each. Not 

a good reflection of what the homeless shelter really looks like. Average is can throw things off a lot. 

So, what I would like is not just averages submitted by what 

your worst case was, what your, you know, best case was, kind of 

mediums and ranges from you all about X number of cases the X 

amount of time. 

Averages are but they are not always as accurate a picture of 

what is going on in. All right. The way I think we should end this, 

and Senator, we want to add some ending remark. 

I am very encouraged to by what I heard today because I think 

there were some excellent suggestions made by all of you. Those of 

you that are leaning for, towards supporting the bill, some of you 

are leaning against supporting the bill but I think all of you gave 

some great input. 

And particularly from a federal contractor that is already being 

mandated to operate in the system, we got some very good information from you, Ms. Poole. 

I am going to talk with Senator Risch about how he wants to proceed. But one thing that we have done after these roundtables is 

gather all this information, majority and minority staff, and then 

almost have like a staff working group that could work together to 

sort through some of the ideas that both the Democratic staff and 

the Republican staff could agree on. 

And then the Senator and I will look at that document and if we 

can fashion something together that we could send to the Judiciary 

Committee for their consideration or we might put something together that could turn into a floor amendment, a small business 

floor amendment jointly supported by Republicans and Democrats, 

that is one possibility. 

The other is our staffs meet. We do not completely agree on everything. The Republicans may have a document that they would 

submit. The Democrats may submit a document. 

But I promise you that the suggestions that you all have made 

today you will see them again. And we really appreciate it. 
30 

This record will be open for two weeks until May 30. So, any additional information you want to send; and finally, John, I really 

want you to follow-up, if you can, with your survey members of 

your three fourths that said they are not happy with the system 

and try to see if they can identify these three or four things that 

they are least happy with. If anybody else wants to do that, that 

would be great. 

Go ahead. 

Senator RISCH. Madam Chairman, first of all, let me say that, 

you know, we are dealing with a very narrow part of the immigration reform bill that is being talked about here. 

My experience over many, many years is I have very, very little 

confidence in the Federal Government to do just about anything. 

When this thing is enacted, I absolutely guarantee you there is 

going to be problems with it; and all we can do for the purposes 

of self-preservation is to twist on it as hard as we can right now, 

try to anticipate what the consequences are going to be, and do the 

best we can to make it as simple and least burdensome to particularly small businesses. 

We always talk about small businesses here and that is 25 people, I guess even up to 500 people on some definitions that we 

have. But small businesses to me are people that employ one, two, 

three, four, five people and these are the people that are going to 

get caught up in this mess. 

I think it is up to us, up to this Committee and up to you who 

advise us to try to make this pill as easy to swallow as it can, 

knowing it is going to be a tough pill to swallow. 

Thank you, Madam Chairman. 

Chair LANDRIEU. Thank you. And, the meeting is adjourned. 

[Whereupon, at 12:17 p.m., the Committee was adjourned.] 
(31) 

APPENDIX MATERIAL SUBMITTED 
32 

05·13·13 

Reference: Two Minute Introductory Statement 

Members of the Committee. 

I am Sabrina Poole, President and CEO of SERDL 

Rockville. Maryland 20852 

202·558·0209 ,"1 301·987·0471 

t}!~ ~)!lta~erdi-llc.org 

SERDI is a woman owned small business and has been operational for the last 10 years. 

SERDI is an IT Service Consulting Firm. 

I am here to discuss the impact to my business of the mandatory E·verify requirement 

Thank you. 

Sabrina B. Poole I President & CEO I SERDI 

.. : 202·558·0209, ~: 301·987·0471 1']1:1: sabrina@serdi.llc.com ~: www.serdi·llc.com 
33 

05-15-13 

Ms. Sabrina Poole serves as the President and CEO of SERDl; 

Subject Matter Advisor to various Government and Commercial 

senior executives in areas of Cyber Security. Program/Project 

Management, Systems Engineering, Software Engineering, Human 

Factors Engineering and Enterprise Architecture. 

As a Senior Information Technology leader with over 20 years of 

experience in Federal and Commercial consulting, Ms. Poole is transitioning SERDI from a small 

consulting practice to a fast-growing, information technology solution provider with an outstanding 

track record of successful government and private sector contracts. 

Ms. Poole earned a BSc. and MSc. in Computer Science at the University of Maryland and is a 

distinguished member of the National Gold Key Honors Society. 

SERDl is a small, woman-owned, certified 8(a)/Small Disadvantaged Business (SDB) providing 

suhject matter expertise (SME) services to Federal, State, and commercial clients. Founded in 2003 

by a group of Information Technology experts, SERDl provides superior engineering and 

professional services to the Federal Government, Defense Contractors, and commercial industry. 

Sabrina B. Poole I President & CEO I SERDl 

a: 202-558-0209, ®: 301-987-0471 Ei!l: sabrina@serdi-Ilc.com~: www.serdi-llc.com 
34 

Rick Judson 

2013 Chairman of the Board, 

National Association of Home Builders 

Before the 

Senate Committee on Small Business and Entrepreneurship 

May 16,2013 

Roundtable Discussion on 

"The Impact of Mandatory E-Verify on America's Small Businesses" 

Introductory Statement 

On behalf of the more than 140,000 members of the National Association of Home Builders 

(NAHB), I appreciate the opportunity to participate in today's roundtable discussion. My name is 

Rick Judson, and I am a homebuilder and developer from Charlotte, North Carolina and NAHB's 

2013 Chairman of the Board. 

I have over 35 years of experience in the building industry, both as a practitioner and an 

industry representative. The building industry is made up of a vast system of general contractors 

and subcontracted businesses, and having run both a large, multi-state insulation company and 

a small home building and real estate development company, I am intimately knowledgeable of 

the industry and its needs. 

As an industry representative, I have been active in the NAHB leadership structure at the local, 

state, and national levels throughout my career. I also served as the President of the Insulation 

Contractors Association of America in 1985. 

Throughout my career, immigration reform has been an important topic, and I appreCiate that 

employers do playa role in ensuring the nation has an authorized workforce. 

NAHB supports comprehensive immigration reform. As a national industry representative and a 

small business owner, I greatly appreciate the importance of today's discussion on E-Verify. To 

be workable for all businesses, large and small, a nationwide, mandatory E-Verify system must 

be fair, efficient, and not impose significant burdens on employers. Congress must also be 

mindful of the building industry and its intricate system of general contractors and 

subcontractors for the system to be workable. 

I look forward to today's discussion, and thank you again for the opportunity to partiCipate. 
35 

~ 

NAHB. 

National Association of Home Builders 

1201 15th Street NW 

Washington, DC 20005 

T 800 388 5242 

F 202 266 8400 

nahb,org 

June 4,2013 

The Honorable Mary Landrieu 

Chair, Senate Committee on Small Business 

and Entrepreneurship 

U,S, Senate 

Washington, D,C, 20510 

The Honorable 

Ranking Member, Senate Committee on 

Small Business and Entrepreneurship 

U,S, Senate 

Washington, D,C, 20510 

Dear Chair Landrieu and Ranking Member Risch: 

On behalf of the more than 140,000 members of the National Association of Home 

Builders (NAHB), thank you for the opportunity to participate in the roundtable on "The 

Impact of Mandatory E-Verify on America's Small Businesses" on May 16, 2013, We 

appreciate the committee's expertise on small business matters and welcome the 

opportunity to work with you on this key element of immigration reform, 

NAHB supports the goal of many of those in Congress to enact comprehensive 

immigration reform, A stable, just, and efficient immigration system will provide the 

certainty needed to grow our economy and increase competitiveness, 

S,744 strikes a balance between a mandatory, nationwide, E-Verify program and the 

employer community's role in addressing illegal immigration, The legislation creates a 

fair, efficient, and workable system that gives employers clarity with regard to their duties 

and obligations, It pre-empts the current patchwork of state laws, providing employers 

with a straightforward rulebook for compliance, Perhaps most importantly, S,744 honors 

the direct employer-employee relationship and the current "knowing" liability standard, 

We also appreciate that the legislation includes a robust safe harbor and provisions to 

make the system workable for our nation's small businesses, which are the engine of the 

American economy, S,744 provides small employers with important tools: telephonic 

access to the system; the opportunity for employers to begin the verification process as 

soon as possible; and a phase-in to the program based on business size, ensuring that 

larger employers enter the system first, followed by a gradual inclusion of smaller 

businesses, 

NAHB strongly encourages you to defend these important provisions that will make the 

mandatory, nationwide system workable for small businesses in the residential 

construction sector. 

NAHB is grateful for your continued leadership, and we welcome the opportunity to work 

with you on this key element of immigration reform and other housing-related issues, 

Sincerely, 

4i-1~~ 
36 

Short Introductory Remarks 

David R. Burton 

The Impact of Mandatory E-Verify on America's Small Business 

Roundtable of the Senate Committee on Small Business and Entrepreneurship 

May 16,2013 

I am David R. Burton, General Counsel of the National Small Business Association (NSBA). 

NSBA opposes mandatory E-Verify. We are confident that Congress will regret making EVerify mandatory for all new hires because of its adverse impact on small businesses, farmers 

and American citizens seeking work. However, if Congress proceeds with mandatory E-Verify 

legislation, it is important that it contain at least six provisions. 

First, the penalties imposed need to be reasonable. The Legal Workforce Act reported out of the 

House Judiciary Committee last Congress would have imposed penalties for failing to use EVerify as high as many states impose for second degree murder (up to JO years in prison). 

Certainly, employing someone should not rank in seriousness with taking another person's life. 

The civil money penalties in the present Senate Judiciary Committee bill can be as high as 

$25,000 per violation. These penalties in tum may be increased still further if the business has 

had some labor or employment violation in the past. These are potentially ruinous penalties that 

can destroy a small business owner's life savings. We believe the penalties being considered 

show a lack of perspective. 

Second, there should be a specific, reasonable limit on how long those receiving a temporary 

non-confirmation (TNC) should have to wait for the resolution of database errors. It currently 

takes about 100 days to resolve database errors but if the use of E-Verify is made mandatory for 

all new hires, the time to resolve errors is likely to increase dramatically. During that time, small 

businesses must retain the person in question knowing that it is more likely than not they will 

ultimately be found to be unauthorized to work. Moreover, many American citizens will find 

their fundamental right to earn a living endangered. If either the employee has presented a U.S. 

passport or two months have elapsed since an appeal of a TNC and the 1-9 process has been 

complied with, then the employer should be able to hire the person without penalty or discharge 

the person without being subjected to lawsuits and liability. 

Third, there needs to be independent measurement and evaluation of accuracy of the system 

combined with serious consequences if the error rate remains too high. Current error rates are so 

high that hundreds of thousands of American citizens each year will have to endure a 

bureaucratic nightmare simply to exercise their right to work. If error rates remain high, then it 

is appropriate that the mandatory nature of the system be relaxed. This could be accomplished 
37 

by a phased-in implementation with large employers first and a statistically valid, independent 

accuracy evaluation being conducted before the next stage is authorized. For example, 

employers with 500 or more employees could be required to use the system immediately. If the 

error was less than I in 250, then the system would apply to employers of 250 or more. If after a 

year, the error rate was less than I in 500, then the system would apply to employers of 100 or 

more. And so on. The final target should be at least an error rate of less than 1 in 1000. 

Fourth, there should be a low- cost, administrative means for compensating employers and 

employees for actual costs incurred or wages lost because of E-Verify errors. 

Fifth, there should be an ironclad protection against liability for small businesses that make 

employment decisions based on the mandates of the E-Verify employment verification system. 

Sixth, there should an office at U.S. Citizenship and Immigration Services (USCrS) similar to the 

Taxpayers Advocate Service at the Internal Revenue Service. This office should be independent 

and have the authority to issue binding assistance orders to aid small businesses or employees 

when the USCIS bureaucracy runs amuck. 
38 

Statement of Ryan Kearney for the National Restaurant Association 

Senate Committee on Small Business and Entrepreneurship 

Roundtable on: 

"The Impact of Mandatorv E-Verify on America's Small Businesses" 

Thursday, May 16,2013, at 10:30 a.m. 

Room 428A of the Russell Senate Office Building 

My name is Ryan Kearney and I am Manager of Labor & Workforce Policy for the 

National Restaurant Association. The Association is the leading business association for the 

restaurant and food service industry. The industry is comprised of 998,000 restaurant and 

foodservice outlets employing 13.1 million people-about ten percent of the U.S. workforce. 

Restaurants are job creators and the nation's second-largest private-sector employer. Despite its 

size, small businesses dominate the industry; even larger chains are often collections of smaller 

franchised businesses. 

Two week ago, we released the results of an E-Verify national survey of restaurant 

owners and operators, non-restaurant foodservice operators, and supply chain professionals. The 

survey was fielded online and distributed to the Association's membership, and a total of789 

responses were received. The respondents are a diverse mix of ownership types from 

independents, franchisees and corporate-owned chains. 

We understand the need for, and support the creation of, a nationwide E-Verify system, 

but it must be done right, which is the reason why the feedback we are getting is so important to 

share we lawmakers. The findings reflect what we have been hearing for a while, namely, that 

soon most corporate-owned chain restaurants will be using E-verify, currently at 49%, and those 

that use the program would recommend it to others, 80%. 

Disproportionally, independent restaurants that do not use E-Verify gave the reason for it 

as the lack of a Human Resources department and technical capabilities, which is why we are 

calling on changes as part of a broad national mandate that simplifies the current two-step 

process and the need for internet access and a computer. The Legal Workforce Act being 

debated right now in the House of Representatives is the best alternative we have seen so far and 

we hope it eventually becomes law as part of any comprehensive immigration reform package. 

Also, because even small businesses do business across localities and even states, we 

support adopting one national uncomplicated federal employment verification system that 

provides employers certainty in regard to their legal obligations, while preempting state and local 

laws. The current patchwork oflocal and state immigration laws-sometimes inconsistent with 

each other--exposes employers to unfair liability and an untenable regulatory structure. 

Thank you for this opportunity to participate in this roundtable. 
39 

RESTAURANT NATIONA~ mmlgratlonWorks I . . 

ASSOCIATION," ~SA 

2012 E-Verify Survey 

Summary of Results 

April 2013 
40 

Table of Contents 

Executive Summary ............................................................................................................. 2 

Introduction .......................................................................................................................... 3 

E-Verify Usage .................................................................................................................. .4 

Number of Years Using E-Verify ....................................................................................... 5 

Reasons for Enrolling in E-Verify ....................................................................................... 6 

Changes to Hiring Procedures ............................................................................................ 7 

Accuracy ofE-Verify System ............................................................................................. 9 

Changes in Pool of Applicants .......................................................................................... 10 

Difficult Features or Burdensome Requirements ofE-Verify ......................................... .11 

Would you recommend E-Verify to a colleague? .............................................................. 12 

Reasons for Not Enrolling in E-Verify ............................................................................ .14 

National Restaurant Association 2012 E-Verify Survey 
41 

Executive Summary 

In October 2012, the National Restaurant Association and Immigration Works USA conducted a 

survey on E-Verify. Respondents included restaurant owners and operators, non-restaurant 

foodservice operators and supply chain professionals. The online survey fielded 789 responses. 

Here are some key findings. 

• E-Verify usage. Among all restaurant owners and operators, 23 percent told surveyors they 

currently use E-Verify to check the immigration status of new hires. Among corporate-owned 

restaurants, a full 49 percent are enrolled in the system. 

• Most would recommend it. Eighty percent of restaurant operators who use E-Verify would 

recommend it to a colleague. 

• Reasons for enrolling. Two-thirds of the responding restaurant operators who use E-Verify 

enrolled voluntarily. Twenty-seven percent enrolled because it is mandated in states where they 

do business. And 2 percent use E-Verify because they do business with the federal governrnent. 

• Reasons for not enrolling. Sixty-two percent of the restaurant operators who are not using 

E-Verify said they didn't enroll because they are small companies with no HR professionals. 

• Accuracy. Seventy-nine percent of restaurant operators said the E-Verify system had been 100 

percent accurate. 

• Changes to hiring procedures. Most of the restaurant operators who use E-Verify said the 

program didn't cause major changes to their hiring or other procedures. Seventy-three percent 

said they made only minor changes to their hiring procedures. 

• Pool of applicants. Fifty-five percent ofthe restaurant operators who use E-Verify said the pool 

of applicants seeking employment in their businesses hasn't changed since they started using the 

system. Thirty-four percent said the pool of applicants has changed somewhat. And 11 percent 

said it ha~ changed significantly. 

2012 Survey 
42 

Introduction 

This report presents the findings of the E-Verify Survey, which was fielded in October 2012 among 

restaurant owners and operators, non-restaurant foodservice operators, and supply chain 

professionals. The survey was fielded online, and a total of 789 responses were received. 

National Restaurant Association 2012 E-Verify Survey 
43 

E-Verify Usage 

• Overall, 23 percent of responding restaurant operators said they currently use E-Verify to check 

the immigration status of their new hires, Sixty-one percent said they don't use E-Verify, 

• Forty-nine percent of corporate-owned chain respondents said they currently use E-Verify, well 

above the usage among their franchisee (24%) and independent (20%) counterparts, 

• Respondents with large staffs are much more likely to use E-Verify, Fifty-three percent of 

respondents with 1,000 or more employees said they use E-Verify, compared with just 15 

percent of respondents with fewer than 50 employees. 

• Respondents from businesses with higher annual sales volume were also much more likely than 

lower volume businesses to say they use E-Verify, 

• Operators of non-restaurant foodservice operations (18%) and individuals from supply chain 

companies (9%) are less likely than restaurant operators to say they use E-Verify, 

Do you currently use E-Verify to check the immigration status of your new hires? 

2012 Survey 
44 

Number of Years Using E-Verify 

• Of the responding restaurant operators who said they currently use E-Verify, they have used it 

for a median of 2 years. 

• For each demographic category of restaurants listed in the chart below, respondents have used 

E-Verify for a median of 2 or 3 years. 

• Operators of non-restaurant foodservice operations have used E-Verify for a median of 3 years, 

while supply chain companies that use E-Verify have used it for a median of 2 years. 

How many years have you been using the E-Vcrify program? 

Median Number of Years 

National Restaurant Association 2012 E-Verify Survey 
45 

Reasons for Enrolling in E-Verify 

• Of the responding restaurant operators who said they currently use E-Verify, 66 percent said 

they enrolled voluntarily. Twenty-seven percent said they enrolled because it is mandated in 

states where they do business, while 2 percent enrolled because they do business with the 

federal government. 

• Fullservice operators (72%) were more likely than quickservice operators (58%) to say they 

enrolled in E-Verify voluntarily. Quickservice operators (35%) were more likely than 

fullservice operators (21 %) to say it is mandated in the states where they have operations. 

• Franchisees (41%) were much more likely than independent operators (27%) and corporateowned chain operators (8%) to say they enrolled in E-Verify because it is mandated in states 

where they do business. Eighty-three percent of chain operators said they enrolled voluntarily. 

Why did you enroll in the E-Verify program? 

Voluntary Mandated in States Company Does Business 

Enrollment of 0 ,ation With Federal Government 

66% 27% 2% 

4% 

50% 

0% SO% 

National Restaurant Association 6 2012 E-VerifY Survey 
46 

Changes to Hiring Procedures 

In general, most restaurant operators that use E-Verify said it didn't cause major changes to 

their hiring or other procedures when they first started using the program. Seventy-three percent 

said they only made minor changes to their hiring procedures, and that it was not a major 

problem. 

• In contrast, only 9 percent of operators said it was more disruptive than they anticipated, and 

that they had to make extensive changes to their procedures. Seventeen percent said they made 

significant changes to their hiring or procedures, but that was to be expected. 

• Across each of the demographic categories, a majority of restaurant operators that use E-Verify 

said they only made minor changes to their hiring procedures when they first started using the 

program. 

To what extent did you make changes in hiring or other procedures when you first started 

using the E-Verity program? 

Extensiyt dutn:g~s: Signtficant cbanges; Only minor changes; 

Mure disTO: five than antiti attti That is to be- u ttcd Was n6t a rna "-or robJcm 

25% 75% 

2012 Survey 
47 

Changes to Hiring Procedures (cont.) 

Survey respondents were given the opportunity to include additional comments on changes to hiring 

procedures when they first started using the E-Verify program. Verbatim responses are below. 

Extensive changes. It was more disruptive than anticipated. 

• Frustration at the time it took to verify new staff. 

• Started using human resources software. 

Significant changes. But that is to be expected. 

• Went to electronic 1-9. 

• It was more difficult to hire kitchen help. 

Only minor changes. It was not a major problem. 

• We grandfathered the existing staff, chose a date, and implemented E-Verify for all new hires 

going forward. 

• Had to develop and utilize a system for faster notification of new hires. 

• Not a big deal. 

• We have an HR department who streamlined the process. 

• Simply added a few extra steps in the hiring process. 

National Restaurant Association 8 2012 Survey 
48 

Accuracy of E-Verify System 

• The vast majority of restaurant operators that use E-Verify said the system is accurate. Seventynine percent of restaurant operators said the E-Verify system has been 100 percent accurate, as 

far as they know. 

• Seventeen percent of restaurant operators said there have been some errors in the E-Verify 

system, while 4 percent said it has been frequently inaccurate. 

• Across each of the demographic categories, a solid majority of restaurant operators said the 

E-Verify system has been 100 percent accurate, to the best of their knowledge. 

Do you find the E-Verify system is generally accurate? 

As far as I know, The" bave been Ith.s~.n 

it lias ~ ... 100 crcent some:erron fre oentl inaccurate 

17% 

81% 

70/1) 

9 2012 Survey 
49 

Changes in Pool of Applicants 

• Fitly-five percent of restaurant operators that use E-Verify said the pool of applicants seeking 

employment in their business hasn't changed at all since they started using the system. Thirtyfour percent said the pool of applicants has changed somewhat, while 11 percent said it has 

changed significantly. 

• Restaurant operators with larger staffs were much more likely to say their pool of applicants has 

changed since they started using E-Verify. Roughly lout of 4 operators with 500 or more 

employees said their applicant pool has changed significantly, compared with about lout of20 

operators with fewer than 100 employees. 

• Operators oflarger restaurant businesses were much more likely than smaller operators to say 

their labor pool has changed as a result of using E-Verify. Twenty-two percent of operators with 

sales of $20 million or more said their applicant pool has changed significantly, while no 

operators with sales under $1 million reported similarly. 

Has the pool of applicants seeking employment in your business changed since yon started 

using the E-Verify system? 

Pool of applicants Pool of applicants 

Restaurant AS,OCIaW>" 10 

Poolofapplicants 

hasn1t chan ed at aU 

2012 Survey 
50 

Changes in Pool of Applicants (cont.) 

Survey respondents were given the opportunity to include additional comments on the changes to 

their pool of applicants. Verbatim responses are below. 

Pool of applicants has changed significantly. 

• Fewer applicants. 

Pool of applicants has changed somewhat. 

• Smaller pool of candidates. 

• Fewer minority applicants. 

• We tell applicants that numbers will be checked. 

• Less kitchen help. 

Difficult Features or Burdensome Requirements of E-Verify 

Survey respondents were asked if there some teatures of the E-Verify program that they find 

particularly difficult to use. or if there are some requirements that they find particularly 

burdensome. Verbatim responses are below. 

• Requirement is done in three days. Can be ditlicult with central office and weekends and 

seasonal hiring. 

• lfan applicant comes up non-qualitied for work. you must continue to employ them for several 

weeks to give them time to clear up the problem. That's a burdensome cost of training for which 

there is no return. 

• You cannot E-Verify current employees (hired prior to instituting use of the program). 

• I don't like to have to retrain periodically and reset my password every three months. 

• We use a third party vendor rather than directly using the government's E-Verify program. It is 

much more user friendly and this way our 1-9 forms are entered electronically so we don't have 

to worry about errors. 

• None whatsoever. It's reliable and no one who is rejected ever claims it to be a mistake. 

• Sometimes the system is down and you do not get an immediate response. 

• Public response is more challenging than expected. 

• Getting set up takes time - if person does not fully read documents and instructions - will not be 

approved to usc. 

• It can be a challenge with international student staff but not insurmountable. 

National Restaurant Association 11 2012 Survey 
51 

Would you recommend E-Verify to a colleague? 

Eighty percent of restaurant operators that currently use E-Verify said they would recommend it 

to a colleague. 

• A solid majority of restaurant operators across each of the demographic categories said they 

would recommend E-Verify to a colleague. 

Would you recommend E-Verify to a colleague? 

Yes No 

SO% 20% 

17% 

rations* 

National Restaurant Association 12 2012 E-VerifY Survey 
52 

Would you recommend E-Verify to a colleague? (cont.) 

Survey respondents were given the opportunity to include additional comments on whether or not 

they would recommend E·Verify to a colleague. Verbatim responses are below. 

Yes, would recommend E-Verif.}' to a colleague. 

• Easy. and eliminates guessing. 

• As long as they used the vendor we partnered with. 

• Ok to use. 

• No other choice: it's a necessity. 

• I like the system with a few exceptions as it gives me piece of mind. especially here in Arizona 

where we have an Employer Sanction Law. 

• It's the right thing to do because identity theft is a problem and we should take a stand against it. 

• I believe it should be mandatory in all 50 states. 

• Protects us in following the law. 

• Will be an industry-wide requirement soon. 

• Safety. 

• The system will eliminate liability of the business in regards to undocumented workers. 

• It's a must to move toward fixing immigration issues. 

No, would not recommend E-Verify to a colleague. 

• Hassel factor. 

• If you don't have to add to admin work. then don't. Wouldn't give government any more reasons 

to audit your biz. 

National Restaurant Association 13 2012 E-VerifY Survey 
53 

Reasons for Not Enrolling in E-Verify 

• Of the restaurant operators who are not currently using E-Verify, 62 percent said they choose 

not to enroll because they are a small company with no HR professional. Fifty percent of 

operators said they see no need to enroll in E-Verify. 

• Restaurant operators from larger businesses were more likely to say they are concerned about a 

disruptive transition. Fifty percent of operators with 1,000 or more employees and 38 percent of 

operators with annual sales of $20 million or more said they are hesitate to enroll because they 

are concerned about a disruptive transition. 

If you are not nsing E-Verify, why do you hesitate to enroll? (check all that apply) 

witb no HR rofessj:oua;J il disru tive transition chan td in th~ a Ika»t oj 

50% 

National Restaurant Association 14 2012 E-Veriry Survey 
54 

Reasons for Not Enrolling in E-Verify (cont.) 

Survey respondents were given the opportunity to include additional comments on why they are 

hesitant to enroll in E-Verify. Verbatim responses are below. 

I see no need. 

• I have a payroll company who does our new hire checks. 

• We feel we meet government requirements by making copies of valid driver's licenses and 

social security cards that become part of each new employee's personnel file. 

• We collect proper identification required by the 1-9 form upon hire. 

• Not mandatory. Paper seems to do fine. Do not want to spend all time in front of a computer. 

I am a small company with no HR professional. 

• Family run restaurant. 

• We have just begun to look into this and will likely begin using it soon. 

• We are a very small restaurant and are able to handle the number of employees by using their 

driver's license and SS card. 

• Very slow turnover. Therefore not much hiring. 

• Very small family business. very few employees. 

• The site disclaimer basically states that 1 cannot deny a person employment if the E-Verify 

comes back questioning the information and 1 cannot dismiss an employee either. so what is the 

advantage in duplicating the verification? 1-9 and/or E-Verify; I feel I should have to do one. but 

not both. 

• Owners are doing all they can just to keep the business open. no extra time for government 

paperwork. 

I am concerned about a disruptive transition. 

• There are enormous requirements for employment already. Our orientations take over two hours 

now. 

I am concerned about likely changes in the applicant pool. 

• I see it as a deterrent to employment. 

• E-Verify rules are onerous. 

• Small business should not be doing more of the government work. We already are responsible 

for too many things and with Obama Care on the way our ever shrinking margins will be under 

tremendous pressure. 

National Restaurant Association 15 2012 E-Verify Survey 
55 

STATEMENT FOR THE RECORD 

BEFORE THE SENATE COMMITTEE ON SMALL BUSINESS AND 

ENTREPRENEURSHIP 

ON 

THE IMPACT OF MANDATORY E-VERIFY ON AMERICA'S SMALL 

BUSINESSES 

ON MAY 16, 2013 

2 Minute Version 

JOHN ARENSMEYER 

FOUNDER & CEO 

SMALL BUSINESS MAJORITY 

Thank you, Madame Chair and members of the Committee. 

This testimony is submitted in support of an effort to ensure that any 

electronic employment verification system such as E-Verify does not 

create undue burdens for small business owners and legally 

authorized workers. 

National scientific polling Small Business Majority conducted in 

March shows 9 in 10 small business owners agree our immigration 

system is long overdue for a major overhaul, and are eager to fix the 

broken system. Our primary job creators agree something must be 

done because immigration is good for America and good for small 

business. The vast majority (84 percent) support the comprehensive 

reform proposal being considered in the Senate. However, 

entrepreneurs strongly believe there must be safe harbors carved out 

for the use of E-Verify. 

Our polling only 15 percent have used a federal system such as EVerify and only four in 10 are even familiar with it. Of those who have 

used the system, only one in four reported it being easy and 

© 2013 Small Business Majority www,smallbusjnessmajority.org May 16, 2013 
56 

convenient to use, while nine percent found it difficult and confusing 

to use and 55 percent found the experience to be somewhere in 

between. 

Our polling confirmed that seven in 10 small business owners believe 

that if a system like E-Verify is put in place nationally, there must be 

protections for small business owners. There are a number of 

important safe harbors that can help ease the transition. The 

amendment sponsored by Senators Franken (D-MN), Lee (R-UT) and 

Hirono (D-HI) would put one such protection in place, by delaying EVerify requirements for small businesses with fewer than 15 

employees, until the system's error rate is stable. 

This is a very modest carve-out. Small employers have extremely 

different HR structures and operating modes than big businesses. 

That is why we simply cannot have a one-size-fits-all policy on this 

issue. As such, we support requiring E-Verify's error rate to remain at 

or below the current level before the smallest firms are required to 

use it. Thank you. 

© 2013 Small BUSiness Majority www,smallbusinessmajority.org 
57 

Comments for the record by Frank Fiorille 

Paychex prides itself on being a key partner for America's businesses; a large percentage of our nearly 

600,000 clients are small businesses. We pay one out of every 15 American private sector employees 

every two weeks. 

As many of these businesses don't have dedicated compliance or legal support teams, they often look to 

us both for education on key regulatory and legislative developments which may impact them - such as 

immigration reform and the specific use of tools like E-Verify - and for products and services which can 

aid them in meeting their regulatory obligations. 

In those states where E-Verify is currently mandated, we have spent time informing our clients, some of 

whom were anxious about this incremental responsibility, and our internal client support teams in what 

the specific requirements are, and made available our suite of product options for those clients who 

may benefit from them. 

We are also closely watching the evolving immigration conversation at the federalleve!. While we 

certainly understand the benefits that reform could bring, we are also sensitive to the need to ensure 

that reform, including the broader use of an employment verification tool like E-Verify, considers the 

possible burden on employers, especially small businesses. 

As such, we are eager to share our unique perspective on the small business community and contribute 

to a solution which addresses the need for enhancements to our immigration process but does so in a 

matter which minimizes adverse business impact. 
58 

Frank Fiorille Bio 

Frank is the Sr. Director of Risk Management at Paychex, a leading provider of payroll, human resource, 

and benefits outsourcing solutions for small- to medium-sized businesses. The company has more than 

100 offices and serves approximately 567,000 payroll clients and 12 million employees 

nationwide. Fiorille has over 20 years experience in risk management and credit and joined Paychex in 

2002 to lead the company's initiative to build an enterprise wide risk apparatus. 

He was named as one of the 100 Most Influential People in Finance-Treasury & Risk Magazine in 2008 

and 2009. Frank's team received 11 individual Alexander Hamilton Awards over the past 6 years in 

excellence in Risk Management, more than any other company over that time frame. 

Before joining Paychex he spent four years with PNC Financial in Pittsburgh, Pennsylvania working in 

their Corporate Credit Policy area overseeing various commercial and consumer risk units and reporting 

directly to the Chief Credit Officer of the company. Prior to his work with PNC, he spent twelve years 

with Citigroup in New York holding various risk management and credit roles within their U.S consumer 

bank. He is an also graduate of the inaugural 2007 class at the Wharton Business School at the 

University of Pennsylvania advanced risk management program. 

He is also credited for leading very successful projects to build the first risk and retention models in both 

the educational lending and payroll outsourcing industries. He has also spent time working 

internationally by teaching and facilitating strategic risk management courses for senior level 

executives. 

About Paychex, Inc. 

Paychex, Inc. is a leading provider of payroll, human resource, and benefits outsourcing solutions for 

America's businesses. The company offers comprehensive payroll services including payroll processing, 

payroll tax administration, and employee pay services. Other offerings include health insurance, 

workers' compensation administration, and a professional employer organization. Founded in 1971, 

with headquarters in Rochester, NY, Paychex delivers superior customer service and a suite of 

innovative mobile and technology solutions to small businesses around the country. 
59 

E-Verify Introductory Remarks: Senator Landrieu Roundtable 

• The Social Security Administration (SSA) plays a supporting role in the Department of 

Homeland Security'S (DHS) E-Verify process. 

• When an employer inputs information into the E-Verify system, DHS sends the 

information to us to verify that the Social Security number (SSN), name, and date of birth 

submitted match our records. For employees alleging United States citizenship, we also 

confirm citizenship status as recorded in our records. 

• When the information submitted does not match our records, or we cannot confirm U.S. 

citizenship, the new hire receives an SSA tentative non-confirmation (TNC). To contest 

the TNC, the new hire must visit us to update or correct our records-to notify us of a 

name change, for example. Because we must verify the new hire's identity, this usually 

requires a face-to-face interview, which takes about 20 minutes. 

• During the interview, the new hire must present documentation to support his or her 

request for record update. Sometimes the new hire may not have the documentation we 

require, and he or she must request the document from the custodian of record or issuing 

agency. 

• DHS reimburses us for all costs we incur in support ofE-Verify. Our fiscal year 2013 

agreement provides us over $9.4 million based on estimates that we will receive a total of 

23.2 million E-Verify queries. 
60 

Bio 

Peter Monaghan is the Deputy Associate Commissioner for Data Exchange and Policy 

Publications. He has extensive and diverse experience, including policy development, 

systems development, and management of program implementation in the front line, 

customer service environment. He is responsible for policy development and 

implementation related to electronic data sharing and has worked for years with the U.S. 

Citizenship and Immigration Service on E-Verify and other programs. 
61 

Background for Katherine Lotspeich 

Katherine Lotspeich is the Deputy Chief for the Verification Division at U.S. Citizenship and 

Immigration Services. Ms. Lotspeich will discuss the how E-Verify works, proposed timelines for 

expanding E-Verify nationally, and efforts to reduce the error rate. 
62 

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Partnership between the U.S. 

Department of Homeland Security (DHS) 

and the Social Security Administration 

(SSA) 

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72 

Small business owners. Small business values. 

May 28, 2013 

The Honorable Mary L. Landrieu, Chair 

Senate Committee on Small Business 

& Entrepreneurship 

428A Russell Senate Office Building 

Washington, DC 20510 

The Honorable James E. Risch, Ranking Member 

Senate Committee on Small Business 

& Entrepreneurship 

428A Russell Senate Office Building 

Washington, DC 20510 

Re: Urging support for increasing accountability, accuracy, and protections for small 

businesses in E-Verify provisions of S. 744 

Dear Chair Landrieu and Ranking Member Risch, 

On behalf of the Main Street Alliance, a national network of local, independent small business 

owners, we are writing to submit comments for the record of your May 16 roundtable on 

mandatory E-Verify. In particular, we want to urge your support for increasing accountability, 

improving accuracy, and ensuring protections for small businesses from unintended 

consequences in the E-Verify provisions of the Border Security, Economic Opportunity, and 

Immigration Modernization Act (S. 744). 

As small business owners, we need economy-boosting immigration reform. That is, we need 

immigration reform to be not only about filling temporary jobs, but also about spurring new job 

creation and boosting customer demand on Main Street. That's why we support reforms that 

strengthen the small business workforce and customer base, reward initiative with the 

American promise of opportunity, promote productivity and reduce red tape for small 

businesses. 

Many elements of the Border Security, Economic Opportunity, and Immigration Modernization 

Act advance these important priorities for America's small businesses. But we are concerned 

that the bill's proposed E-Verify requirements, as written, threaten to undermine the economyboosting potential of immigration reform. We share a broad concern that the costs of 

mandatory E-Verify to small businesses will outweigh the benefits. If mandatory E-Verify 

provisions are to remain part of the Senate's comprehensive immigration package going 

forward, we believe adjustments are needed to mitigate the negative impacts of E-Verify errors 

on small businesses and our workers. 

E-Verify error rates and the challenges of correcting mistakes have created problems for small 

business owners and employees in the past. As the Senate considers expanding this program 

from less than 10 percent of employers to mandatory participation by all employers, we are 

concerned there is a real risk of increasing error rates. This threatens to increase red tape in the 
73 

hiring process, increase costs to small businesses, and take small business owners' time and 

focus away from building our businesses and creating jobs. 

Even if the latest reported error rates for E-Verify are held constant through the program's 

rapid expansion, E-Verify would still return erroneous non-confirmations for over 150,000 

authorized workers each year. Dealing with these errors will already represent a significant cost 

and disruption of operations for small business owners and our employees. An increase in the 

error rate would compound these costs and threaten to undercut the economy-boosting 

potential of immigration reform. 

Furthermore, with the error rate for authorized foreign-born workers found to be more than 20 

times the error rate for U.s.-born workers, the threat of major workplace disruptions due to EVerify errors is far greater for businesses in sectors that rely more heavily on immigrant 

workers. 

With these concerns in mind, we encourage you to support changes to the E-Verify provisions 

of S. 744 to ensure that error rates and unintended consequences are minimized before 

participation in the program is required for small businesses. 

We need economy-boosting immigration reform that works for small businesses, not against 

us. We urge you to ensure that the electronic employment verification provisions of S. 744 

include a strong commitment to accuracy and adequate protections for small businesses as the 

process moves forward. 

Sincerely, on behalf of the Main Street Alliance national steering committee, 

Mary Black 

The UPS Store at Citiplace 

Baton Rouge, Louisiana 

Jim Houser 

Hawthorne Auto Clinic, Inc 

Portland, Oregon 

David Borris 

Hers Kitchen Catering 

Northbrook, Illinois 

Cristina McNeil 

Office Web International 

Boise, Idaho 

Kelly Conklin 

Foley-Waite Associates, Inc 

Bloomfield, New Jersey 

John Costin 

Veneer Services Unlimited 

Kennebunk, Maine 

ReShonda Young 

Alpha Express, Inc 

Waterloo, Iowa 

Jose Gonzalez 

Tu Casa Real Estate 

Salem, Oregon 
74 

Statement for the Record for the 

U.S. Senate Small Business and Entrepreneurship Committee 

"Impact of Mandatory E-Verify on America's Small Businesses" 

May 16, 2013 

National Federation of Independent Business (NFl B) 

1201 F Street, NW Suite 200 

Washington, DC 20004 
75 

Æ 

Thank you Chairwoman Landrieu. Ranking Member Risch. and Members of the Committee for holding 

this roundtable entitled. "Impact of Mandatory E-Verify on America's Small Businesses." The National 

Federation of Independent Business (NFIB) appreciates the Senate Small Business and Entrepreneurship 

Committee's focus on the electronic employment-verification system program (also known as e-verify). 

The NFlB is the nation's leading small business advocacy organization. NFlB believes that in order for an 

immigration reform effort to be successful. the requirements and enforcement provisions must be 

workable, efficient, and fair for small businesses. Most important. understanding that each small business 

is unique in location, structure, and operation is key and that a adopting a "one size fits all approach" will 

not work for small business. 

NFIB supports an e-verify system that takes into account the size of an employer in its fee structure. 

includes a reasonable limit on small-business penalties and reduces such penalties on first-time offenders. 

prohibits penalties for good-faith violations. protects employers from liability if incorrect information on 

a worker is given by the e-verify system. minimizes paperwork burdens. and contains an appropriate 

phase-in time of the new e-verify system. 

NFlB Research Foundation's National Small Business Pol/- Business Structure found that 87.5 percent 

of all small businesses do not have at least one employee (excluding the owner) whose only job is 

personnel or human resources.' Since few NFlB members employ a dedicated human resources 

professional to handle employment matters. a strong, clear safe harbor to protect employers from liability 

if incorrect information on a worker is given by the e-verify system is needed. Additionally. it is 

important that the small business owner is not unduly burdened with recordkeeping or paperwork 

requirements under an e-verify system. 

While most small business owners appear to be embracing technology. it is important to recognize that 

some employers have not. NFlB's Research Foundation has found that 91 percent of small employers 

now personally use a computer in their businesses. which means nearly one in 10 do not. Furthermore. for 

those small employers who utilize a computer within their businesses. a majority (51 percent) spend less 

than an hour a day working on the Internet on the computer.' Additionally. a large percent of small 

businesses are rural and may not have access to reliable. consistent Internet connections. Therefore. small 

businesses must have the option to phone-in toll-free for e-verify. 

As Congress begins consideration of immigration reform. NFlB believes that America's small businesses 

should not be unduly burdened. unfairly scrutinized. or otherwise affected by any unintended 

consequences resulting from the implementation of a nation-wide employee verification system. Again. 

NFlB appreciates the Senate Small Business and Entrepreneurship Committee taking a closer look at the 

challenges small employers face regarding e-verify. We look forward to working with you on this issue in 

the future. 

lSee, BUSiness Structure -1 ... FJ8 XatlOnal S'mall Bllsmess Poll, NFIH Research FoundatIOn, Washmgton. DC, Volume 4, Issue 7. 2004 

"St..'C. ('ommumcatton - SF/8 :VallOnal Small Bu.wnesJ Poll. NFIB Research Foundation. Washmgton, DC. Volume 12. Issue 8. 2012