Employment Verification: Challenges Exist in Implementing a Mandatory Electronic Verification System
Published: 2007-06-07T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The opportunity for employment is one of the most powerful magnets attracting illegal immigration to the United States. The Immigration Reform and Control Act of 1986 established an employment eligibility verification process, but immigration experts state that a more reliable verification system is needed. In 1996, the former U.S. Immigration and Naturalization Service, now within the Department of Homeland Security (DHS), and the Social Security Administration (SSA) began operating a voluntary pilot program, called the Employment Eligibility Verification (EEV) program, to provide participating employers with a means for electronically verifying employees' work eligibility. Congress is considering various immigration reform proposals, some of which would require all employers to electronically verify the work authorization status of their employees at the time of hire. In this testimony GAO provides observations on the EEV system's capacity, data reliability, ability to detect fraudulent documents and identity theft, and vulnerability to employer fraud as well as challenges to making the program mandatory for all employers. This testimony is based on our previous work regarding the employment eligibility verification process and updated information obtained from DHS and SSA.
section_title: What GAO Found
paragraphs: A mandatory EEV program would substantially increase the number of employers using the system. As of May 2007, about 17,000 employers have registered to use the current voluntary EEV program, about half of which are active users. If participation in EEV were made mandatory, the approximately 5.9 million employers in the United States may be required to participate. Requiring all employers to use EEV would substantially increase the demands on DHS and SSA resources. DHS estimated that increasing the capacity of EEV could cost it $70 million annually for program management and $300 million to $400 million annually for compliance activities and staff. SSA officials estimated that expansion of the EEV program through this fiscal year would cost $5 million to $6 million and noted that the cost of mandatory EEV would be much higher and driven by increased workload of its field office staff that would be responsible for resolving queries that SSA cannot immediately confirm. DHS and SSA are exploring options to reduce delays in the EEV process. The majority of EEV queries entered by employers--about 92 percent--confirm within seconds that the employee is work authorized. About 7 percent of the queries cannot be immediately confirmed by SSA, and about 1 percent cannot be immediately confirmed by DHS. Resolving these nonconfirmations can take several days, or in a few cases even weeks. DHS and SSA are considering options for improving the system's ability to perform additional automated checks to immediately confirm work authorization, which may be important should EEV be mandatory. EEV may help reduce document fraud, but it cannot yet fully address identity fraud issues, for example, when employees present borrowed or stolen genuine documents. The current EEV program is piloting a photograph screening tool, whereby an employer can more easily identify fraudulent documentation. DHS expects to expand the use of this tool to all participating employers by September 2007. Although mandatory EEV and the associated use of the photograph screening tool offer some remedy, limiting the number of acceptable work authorization documents and making them more secure would help to more fully address identity fraud. The EEV program is vulnerable to employer fraud, such as entering the same identity information to authorize multiple workers. EEV is also vulnerable to employer misuse that adversely affects employees, such as employers limiting work assignments or pay while employees are undergoing the verification process. DHS is establishing a new Compliance and Monitoring program to help reduce employer fraud and misuse by, for example, identifying patterns in employer compliance with program requirements. Information suggesting employers' fraud or misuse of the system could be useful to other DHS components in targeting limited worksite enforcement resources and promoting employer compliance with employment laws.

section_title: Letter
paragraphs: I appreciate the opportunity to be here today to participate in this hearing  on electronic employment verification. As we and others have reported in  the past, the opportunity for employment is one of the most powerful  magnets attracting unauthorized immigrants to the United States. To help  address this issue, in 1986 Congress passed the Immigration Reform and  Control Act (IRCA), which made it illegal for individuals and entities to  knowingly hire, continue to employ, or recruit or refer for a fee  unauthorized workers. The act established a two-pronged approach for  helping to limit the employment of unauthorized workers: (1) an  employment verification process through which employers verify all newly  hired employees’ work eligibility and (2) a sanctions program for fining  employers who do not comply with the act.
Following the passage of IRCA, the U.S. Commission on Immigration  Reform and various immigration experts indicated a number of problems  with the implementation of immigration policies and concluded that  deterring illegal immigration requires, among other things, strategies that  focus on disrupting the ability of illegal immigrants to gain employment  through a more reliable employment eligibility verification process. In  particular, the commission report and other studies found that the single  most important step that could be taken to reduce unlawful migration is  the development of a more effective system for verifying work  authorization. In the over 20 years since passage of IRCA, the employment  eligibility verification process has remained largely unchanged. The House  and Senate are considering legislation to reform immigration laws and  strengthen electronic employment verification. Some of this legislation  includes proposals that would require implementing a mandatory,  functional electronic employment verification program for all employers  before other immigration-related reforms could be initiated. Currently, the  U.S. Citizenship and Immigration Services (USCIS) administers, and Social  Security Administration (SSA) supports, a voluntary electronic  employment verification program, called the Employment Eligibility  Verification (EEV) program.
My testimony today is an update of our prior work regarding employment  verification and worksite enforcement. Specifically, I will discuss our  observations on the current electronic employment verification program  and challenges to making the program mandatory for all employers.
In preparing this testimony, we reviewed our past work on employment  verification and worksite enforcement efforts. We analyzed updated  information provided by U.S. Immigration and Customs Enforcement  (ICE), USCIS, and SSA officials on steps they are taking to address  weaknesses identified in our prior work, as well as challenges their  agencies may face if an electronic employment verification program were  made mandatory. We examined regulations, guidance, and other studies  on the employment verification process. We also analyzed a report on the  results of an independent evaluation of the electronic employment  eligibility verification program, then known as the Basic Pilot program,  conducted by the Institute for Survey Research at Temple University and  Westat in June 2004. Furthermore, we received updated data on employer  use of the current electronic employment eligibility verification system.  We reviewed these data for accuracy and completeness and determined  that these data were sufficiently reliable for the purposes of our review.  We conducted the work reflected in this statement from September 2004  through July 2005 and updated this information in May and June 2007 in  accordance with generally accepted government auditing standards.
subsections: section_title: Background
paragraphs: In 1986, IRCA established the employment verification process based on  employers’ review of documents presented by employees to prove identity  and work eligibility. On the Form I-9, employees must attest that they are  U.S. citizens, lawfully admitted permanent residents, or aliens authorized  to work in the United States. Employers must then certify that they have  reviewed the documents presented by their employees to establish identity  and work eligibility and that the documents appear genuine and relate to  the individual presenting them. In making their certifications, employers  are expected to judge whether the documents presented are obviously  counterfeit or fraudulent. Employers generally are deemed in compliance  with IRCA if they have followed the Form I-9 process in good faith,  including when an unauthorized alien presents fraudulent documents that  appear genuine. Following the passage of IRCA in 1986, employees could  present 29 different documents to establish their identity and/or work  eligibility. In a 1997 interim rule, the former U.S. Immigration and  Naturalization Service (INS) reduced the number of acceptable work  eligibility documents from 29 to 27.
The Illegal Immigration Reform and Immigrant Responsibility Act  (IIRIRA) of 1996 required the former INS and SSA to operate three  voluntary pilot programs to test electronic means for employers to verify  an employee’s eligibility to work, one of which was the Basic Pilot  Program. The Basic Pilot Program was designed to test whether pilot  verification procedures could improve the existing employment  verification process by reducing (1) false claims of U.S. citizenship and  document fraud, (2) discrimination against employees, (3) violations of  civil liberties and privacy, and (4) the burden on employers to verify  employees’ work eligibility.
In 2007, USCIS renamed the Basic Pilot Program the Employment  Eligibility Verification (EEV) program. EEV provides participating  employers with an electronic method to verify their employees’ work  eligibility. Employers may participate voluntarily in EEV, but are still  required to complete Forms I-9 for all newly hired employees in  accordance with IRCA. After completing the forms, these employers query  EEV’s automated system by entering employee information provided on  the forms, such as name and Social Security number, into the EEV Web  site within 3 working days of the employees’ hire date. The program then  electronically matches that information against information in SSA’s  NUMIDENT database and, for noncitizens, DHS databases to determine  whether the employee is eligible to work. EEV electronically notifies  employers whether their employees’ work authorization was confirmed.  Those queries that the DHS automated check cannot confirm are referred  to DHS immigration status verifiers, who check employee information  against information in other DHS databases. The EEV process is shown in  figure 1.
In cases when EEV cannot confirm an employee’s work authorization  status either through the automatic check or the check by an immigration  status verifier, the system issues the employer a tentative nonconfirmation  of the employee’s work authorization status. In this case, the employers  must notify the affected employees of the finding, and the employees have  the right to contest their tentative nonconfirmations by contacting SSA or  USCIS to resolve any inaccuracies in their records within 8 days. During  this time, employers may not take any adverse actions against those  employees, such as limiting their work assignments or pay. After 10 days,  employers are required to either immediately terminate the employment or  notify DHS of the continued employment of workers who do not  successfully contest the tentative nonconfirmation and those who the pilot  program finds are not work-authorized.
The EEV program is a part of USCIS’s Systematic Alien Verification for  Entitlements Program, which provides a variety of verification services for  federal, state, and local government agencies. USCIS estimates that there  are more than 150,000 federal, state, and local agency users that verify  immigration status through the Systematic Alien Verification for  Entitlements Program. SSA also operates various verification services.  Among these are the Employee Verification Service (EVS) and the Web- based SSN Verification Service (SSNVS), which can be used to provide  verification that employees’ names and Social Security numbers match  SSA’s records. These services, designed to ensure accurate employer wage  reporting, are offered free of charge. Employer use is voluntary, and the  services are not widely used.
section_title: Mandatory EEV Would Require an Increase in Capacity at USCIS and SSA
paragraphs: Mandatory electronic employment verification would substantially  increase the number of employers using the EEV system, which would  place greater demands on USCIS and SSA resources. As of May 2007,  about 17,000 employers have registered to use the program, 8,863 of which  were active users, and USCIS has estimated that employer registration is  expected to greatly increase by the end of fiscal year 2007. If participation  in the EEV program were made mandatory, the program may have to  accommodate all of the estimated 5.9 million employers in the United  States. USCIS officials estimate that to meet a December 2008  implementation date, this could require about of 30,000 employers to  register with the system per day. The mandatory use EEV can affect the  capacity of the system because of the increased number of employer  queries.
USCIS has estimated that a mandatory EEV could cost USCIS $70 million   annually for program management and $300 million to $400 million  annually for compliance activities and staff. The costs associated with  other programmatic and system enhancements are currently unknown.  According to USCIS, cost estimates will rise if the number of queries rises,  although officials noted that the estimates may depend on the method for  implementing a mandatory program. SSA officials told us they have  estimated that expansion of the EEV program to levels predicted by the  end of fiscal year 2007 would cost $5 to $6 million, but SSA was not yet  able to provide us estimates for the cost of a mandatory EEV. According to  SSA officials, the cost of a mandatory EEV would be driven by the  increased workload of its field office staff due to resolving SSA tentative  nonconfirmations.
A mandatory EEV would require an increase in the number of USCIS and  SSA staff to operate the program. For example, USCIS had 13  headquarters staff members in 2005 to run the program and 38  immigration status verifiers available for secondary verification. USCIS  plans to increase staff levels to 255 to manage a mandatory program,  which includes increasing the number of immigration status verifiers who  conduct secondary verifications. USCIS officials expressed concern  about the difficulty in hiring these staff due to lengthy hiring processes,  which may include government background checks. In addition, according  to SSA officials, a mandatory EEV program would require additional staff  at SSA field offices to accommodate an increase in the number of  individuals visiting SSA field offices to resolve tentative nonconfirmations.  According to SSA officials, the number of new staff required would  depend on both the legislative requirements for implementing mandatory  EEV and the effectiveness of efforts USCIS has under way to decrease the  need for individuals to visit SSA field offices. For this reason, SSA officials  told us they have not yet estimated how many additional staff they would  need for a mandatory EEV.
section_title: USCIS and SSA Are Exploring Options to Reduce Delays in the EEV Process
paragraphs: In prior work, we reported that secondary verifications lengthen the time  needed to complete the employment verification process. The majority of  EEV queries entered by employers—about 92 percent—confirm within  seconds that the employee is authorized to work. About 7 percent of the  queries are not confirmed by the initial automated check and result in  SSA-issued tentative nonconfirmations, while about 1 percent result in  DHS-issued tentative nonconfirmations. With regard to the SSA-issued  tentative nonconfirmations, USCIS and SSA officials told us that the  majority occur because employees’ citizenship status or other information,  such as name changes, is not up to date in the SSA database. SSA does not  update records unless an individual requests the update in person and  submits the required evidence to support the change in its records. USCIS  officials stated that, for example, when aliens become naturalized citizens,  their citizenship status is often not updated in the SSA database. In  addition, individuals who have changed their names for various reasons,  such as marriage, without notifying SSA in person may also be issued an  SSA tentative nonconfirmation. According to SSA officials, although SSA  instructs individuals to report any changes in name, citizenship, or  immigration status, many do not do so. When these individuals’  information is queried through EEV, a tentative nonconfirmation would be  issued, requiring them to go to an SSA field office to show proof of the  change and to correct their records in SSA’s database.
USCIS and SSA are exploring some options to improve the efficiency of  the verification process. For example, USCIS is exploring ways to  automatically check for naturalized citizens’ work authorization using  DHS databases before the EEV system issues a tentative nonconfirmation.  Furthermore, USCIS is planning to provide naturalized citizens with the  option, on a voluntary basis, to provide their Alien Number or  Naturalization Certification Number so that employers can query that  information through the EEV system before referring the employees to  SSA to resolve tentative nonconfirmations. SSA is also coordinating with  USCIS to develop an automated secondary verification capability, which  may reduce the need for employers to take additional steps after the  employee resolves the SSA tentative nonconfirmation. USCIS and SSA  officials told us that the agencies are planning to provide SSA field office  staff with access to the EEV system so that field office staff can resolve  the SSA tentative nonconfirmation directly in the system at the time the  employee’s record is updated at the field office. According to SSA officials,  the automated secondary verification capability is tentatively scheduled to  be implemented by October 2007. While these steps may help improve the  efficiency of the verification process, including eliminating some SSA  tentative nonconfirmations, they will not entirely eliminate the need for  some individuals to visit SSA field offices to update records when  individuals’ status or other information changes.
USCIS and SSA officials noted that because the current EEV program is  voluntary, the percentage of individuals who are referred to SSA field  offices to resolve tentative nonconfirmations may not accurately indicate  the number of individuals who would be required to do so under a  mandatory program. SSA and USCIS officials expressed concern about the  effect on SSA field offices’ workload of the number of individuals who  would be required to physically visit a field office if EEV were made  mandatory.
section_title: EEV May Help Reduce Employee Document Fraud, but Cannot Yet Fully Address Identity Fraud Issues
paragraphs: In our prior work, we reported that EEV enhances the ability of  participating employers to reliably verify their employees’ work eligibility  and assists participating employers with identification of false documents  used to obtain employment. If newly hired employees present false  information, EEV would not confirm the employees’ work eligibility  because their information, such as a false name or social security number,  would not match SSA and DHS database information. However, the  current EEV program is limited in its ability to help employers detect  identity fraud, such as cases in which an individual presents borrowed or  stolen genuine documents.
USCIS has taken steps to reduce fraud associated with the use of  documents containing valid information on which another photograph has  been substituted for the document’s original photograph. In March 2007,  USCIS began piloting a photograph screening tool as an addition to the  current EEV system. According to USCIS officials, the photograph  screening tool is intended to allow an employer to verify the authenticity  of a Lawful Permanent Resident card (green card) or Employment  Authorization Document that contain photographs of the document holder  by comparing individuals’ photographs on the documents presented  during the I-9 process to those maintained in DHS databases. As of May  2007, about 70 employers have been participating during the pilot phase of  the photograph screening tool, and EEV has processed about 400 queries  through the tool. USCIS expects to expand the program to all employers  participating in EEV by the end of summer 2007.
The use of the photograph screening tool is currently limited because  newly hired citizens and noncitizens presenting forms of documentation  other than green cards or Employment Authorization Documents to verify  work eligibility are not subject to the tool. Expansion of the pilot  photograph screening tool would require incorporating other forms of  documentation with related databases. In addition, efforts to expand the  tool are still in the initial planning stages. For example, according to  USCIS officials, USCIS and the Department of State have begun exploring  ways to include visa and U.S. passport documents in the tool, but these  agencies have not yet reached agreement regarding the use of these  documents. USCIS is also exploring a possible pilot program with state  Departments of Motor Vehicles.
In prior work we reported that although not specifically or  comprehensively quantifiable, the prevalence of identify fraud seemed to  be increasing, a development that may affect employers’ ability to reliably  verify employment eligibility in a mandatory EEV program. The large  number and variety of acceptable work authorization documents—27  under the current employment verification process—along with inherent  vulnerabilities to counterfeiting of some of these documents, may  complicate efforts to address identity fraud. Although mandatory EEV and  the associated use of the photograph screening tool offers some remedy,  further actions, such as reducing the number of acceptable work eligibility  documents and making them more secure, may be required to more fully  address identity fraud.
section_title: While Most Employers Complied with EEV Procedures, the Program Is Vulnerable to Employer Fraud That Diminishes Its Effectiveness and Misuse That Adversely Affects Employees
paragraphs: EEV is vulnerable to acts of employer fraud, such as entering the same  identity information to authorize multiple workers. Although ICE has no  direct role in monitoring employer use of EEV and does not have direct  access to program information, which is maintained by USCIS, ICE  officials told us that program data could indicate cases in which employers  may be fraudulently using the system and therefore would help the agency  better target its limited worksite enforcement resources toward those  employers. ICE officials noted that, in a few cases, they have requested  and received EEV data from USCIS on specific employers who participate  in the program and are under ICE investigation. USCIS is planning to use  its newly created Compliance and Monitoring program to refer  information on employers who may be fraudulently using the EEV system,  although USCIS and ICE are still determining what information is  appropriate to share.
Employees queried through EEV may be adversely affected if employers  violate program obligations designed to protect the employees, by taking  actions such as limiting work assignments or pay while employees are  undergoing the verification process. The 2004 Temple University Institute  for Survey Research and Westat evaluation of EEV concluded that the  majority of employers surveyed appeared to be in compliance with EEV  procedures. However, the evaluation and our prior review found evidence  of some noncompliance with these procedures. In 2005, we reported that  EEV provided a variety of reports that could help USCIS determine  whether employers followed program requirements, but that USCIS lacked  sufficient staff to do so. Since then, USCIS has added staff to its  verification office and created a Compliance and Monitoring program to  review employers’ use of the EEV system. However, while USCIS has hired  directors for these functions, the program is not yet fully staffed.  According to USCIS officials, USCIS is still in the process of determining  how this program will carry out compliance and monitoring functions, but  its activities may include sampling employer usage data for evidence of  noncompliant practices, such as identifying employers who do not appear  to refer employees contesting tentative nonconfirmations to SSA or  USCIS. USCIS estimates that the Compliance and Monitoring program will  be sufficiently staffed to begin identifying employer noncompliance by late  summer 2007.
USCIS’s newly created Compliance and Monitoring program could help  ICE better target its worksite enforcement efforts by indicating cases of  employers’ egregious misuse of the system. Currently, there is no formal  mechanism for sharing compliance data between USCIS and ICE. ICE  officials noted that proactive reduction of illegal employment through the  use of functional, mandatory EEV may help reduce the need for and better  focus worksite enforcement efforts. Moreover, these officials told us that  mandatory use of an automated system like EEV could limit the ability of  employers who knowingly hired unauthorized workers to claim that the  workers presented false documents to obtain employment, which could  assist ICE agents in proving employer violations of IRCA.
section_title: Concluding Observations
paragraphs: Although efforts to reduce the employment of unauthorized workers in the  United States necessitate a strong employment eligibility verification  process and a credible worksite enforcement program and other  immigration reforms may be dependent on it, a number of challenges face  its successful implementation. The EEV program shows promise for  enhancing the employment verification process and reducing document  fraud if implemented on a much larger scale, and USCIS and SSA have  undertaken a number of steps to address many of the weaknesses we  identified in the EEV program. USCIS has also spent the last several years  planning for an expanded or mandatory program, and has made progress  in several areas, but it is unclear at this time the extent to which USCIC’s  efforts will be successful under mandatory EEV. It is clear, however, that a  mandatory EEV system will require a substantial investment in staff and  other resources, at least in the near term, in both agencies. There are also  issues, such as identity fraud and intentional misuse, that will remain a  challenge to the system. Implementing an EEV system to ensure that all  individuals working in this country are doing so legally and that undue  burdens are not placed on employers or employees will not be an easy  task within the timelines suggested in reform proposals.
This concludes my prepared statement. I would be pleased to answer any  questions you and the subcommittee members may have.
section_title: GAO Contact and Staff Acknowledgements
paragraphs: For further information about this testimony, please contact Richard Stana  at 202-512-8777.
Other key contributors to this statement were Blake Ainsworth, Frances  Cook, Michelle Cooper, Rebecca Gambler, Kathryn Godfrey, Lara Laufer,  Shawn Mongin, Justin L. Monroe, John Vocino, Robert E. White, and Paul  Wright.
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