The Risky Business of Immigration Reform

In considering this issue, the administration and lawmakers should seek immigration policies that facilitate private sector enforcement of immigration laws without unduly punishing business owners or choking productivity. Enacted in 1986, the Immigration Reform and Control Act (IRCA) for the first time prohibited employers from hiring illegal immigrants. This legislation rightly sought to reduce the economic incentive for illegal immigration, but compliance has proven challenging.

Even the most recent innovation demonstrates that a foolproof solution remains elusive. Effective September 8th, all businesses that contract with the federal government or receive stimulus funds are required to participate in E-Verify, an online program for checking whether an employee is in the United States legally. In addition, 15 states require government contractors to use E-Verify; Arizona, South Carolina, and Mississippi require all businesses to use the system. However, it is not a panacea for the challenges employers face in enforcing federal law.

Twenty-seven different types of documents may be used to establish eligibility to work. Forgeries and identity theft are rampant. In a recent two-year period, there were 3,500 federal investigations in which some 78,000 fraudulent documents were used to obtain employment for 50,000 illegal immigrants.

Additionally, a Social Security Administration (SSA) report concluded that 17.8 million out of 435 million records are inaccurate, resulting in incorrect feedback when submitted through E-Verify. The primary reason that citizens or legal residents’ status cannot be verified is that they have changed addresses and not reported the move to the SSA.

Employers face serious consequences if they run afoul of federal immigration law. Prison sentences for employing illegal immigrants range from six months to five years. In the last few years, business owners in the restaurant, fishing, and construction industries have been sentenced to prison for hiring illegal immigrants.

Business owners who knowingly hire illegal immigrants should be held accountable, particularly through civil penalties.  However, courts have interpreted IRCA in a way that permits business owners who unwittingly hired an illegal immigrant to be convicted and even imprisoned. First, courts have ruled that “constructive knowledge” is sufficient, which means a business owner’s knowledge of an employee’s immigration status can be inferred from the circumstances. Second, the knowledge of managers has been found sufficient to convict business owners.

Additionally, IRCA’s prohibition on harboring illegal immigrants has been applied to landlords, who have been the subject of several recent prosecutions. This is problematic because renters, unlike employees, are not legally required to submit documentation to landlords, and landlords cannot reasonably be expected to follow up with each resident to check whether their visa may have expired.

At the other end of the immigration spectrum, companies, particularly those in the high technology sector, continue to face difficulties obtaining visas for high-skilled workers. Scientists and engineers face an average of a five-year delay to obtain a visa, even with a sponsor that will hire them. Since the sponsor must prove they cannot find an American to fill the position, expediting this process would not come at the expense of current citizens.

Furthermore, arbitrary country caps on these permanent visas have excluded immigrants from China and India who are in demand by U.S technology companies. As a result, some companies simply offshore these jobs. For example, Google recently moved 30 high-tech positions overseas because visas could not be obtained. Outsourcing visa processing to licensed private companies and repealing the country caps would alleviate this problem.

As American businesses navigate a challenging economy, it is imperative that any immigration reform legislation balance the private sector’s appropriate role in enforcing immigration laws with the need for greater fairness, predictability, and efficiency.

Marc A. Levin, Esq. is Director of the Center for Effective Justice at the Texas Public Policy Foundation, a non-profit, free-market research institute based in Austin.