V. Electronic Verification: A “Basic” Step in the Right Direction

The difficulties inherent in both IRCA and private enforcement leave employers without a bright line standard that ensures protection from costly lawsuits and guarantees a level playing field with their competitors. The Basic Pilot Program provides this line. A brief discussion of the history and mechanics of electronic verification is useful for evaluating the advantages of this system over private enforcement and IRCA.

A. History and Mechanics

Congress first explored the concept of a computer-based electronic system to help employers verify employee documentation in 1996 with the passage of the Immigration Reform and Immigrant Responsibility Act (“IRIRA”).163 Section 401 of the Act required the Attorney General to establish a voluntary pilot program for verifying work eligibility documentation.164 Lauded by the Commission on Immigration Reform as “the most promising option for verifying work authorization,” a program called Basic Pilot was introduced in which employers could volunteer to use a database established by immigration officials to verify employee documentation using their social security numbers.165 As originally passed, the program had only a four-year life-span and limited availability.166 However, due to the growing interest in the program, Congress extended the program in 2001.167 In 2003, the program became available nationwide.168 Currently, Basic Pilot is the most widely utilized form of electronic verification, with more than 10,000 employers signed up to use the system.169

The Basic Pilot Program is an Internet-based system which verifies prospective employee documentation using government databases. If an employer wishes to enroll in the program, she must first register with the U.S. Citizenship and Immigration Service (USCIS) and the SSA.170 Once the employer is registered, the process begins with the employer reviewing the prospective employee's documentation prior to hiring, and attesting to the documents on the appropriate forms as required by IRCA.171 Important for purposes of Basic Pilot, citizen employees must provide their employers with a valid social security number, and non-citizens must have authorization from the DHS to work in the United States.172 Non-citizen employees authorized to work are also given a social security number to provide to their employer.173

The employer transmits the applicant's social security number to DHS via the Internet, where the information is electronically processed and transmitted to the SSA.174 The SSA compares the information with its primary database, the Numerical Identification File, which contains citizenship status information of all Social Security Card holders.175 If the social security number provided by the employer matches SSA records, the employer receives a confirmation notice and the process is complete.176 However, if the information provided by the employer does not match SSA records, the employer receives a tentative non-confirmation notice, and must refer the employee to SSA to resolve the problem.177

If an employee's information matches SSA records but the employee does not have work authorization status, the information is compared to the USCIS's Customer Processing System.178 If the employee's information still cannot be confirmed, the information is then transferred to Immigration Status Verifiers, who manually check DHS records to verify the information.179 If the information remains unconfirmed, the employer receives a message telling her to send the employee to SSA to work out the problem.180 Finally, if the employee fails to contest the tentative non-confirmation notice within ten days, whether for a failed SSA match or work authorization status, the employer receives a final non-confirmation notice and has the option to either terminate the employee or notify DHS that the employee is being retained.181 If the employer retains the employee, she may be liable for immigration violations.182

Employers' responses to the program have been positive. DHS reported that 96% of participating employers believed the system provided an effective screening tool.183 Moreover, 93% thought the process was easier than current IRCA requirements.184 Basic Pilot's growth in popularity is evident from its increasing participation rates. In 2005, Dunkin Donuts required “all 5,000 of its franchisees” to begin using the system.185 And, as mentioned previously, the State of North Carolina recently required all state employers to use the system.186

Given the response by politicians to its increasing popularity with businesses, the future of Basic Pilot seems bright. In a recent comment on immigration reform, President Bush stated: “Part of a comprehensive immigration plan is to give employers the tools necessary to determine whether or not the workers they're looking for are here legally in America. And we've got such a plan-Basic Pilot, it's called. It's working.”187 Moreover, in 2005 the House of Representatives passed the Border Protection, Antiterrorism, and Illegal Immigration Control Act, which would change existing law by mandating that employers use an electronic verification system which builds upon Basic Pilot.188 In the same year, the Senate also passed a bill requiring employers to use an electronic verification system albeit under terms slightly different from the House bill.189

This positive acceptance by employers and politicians suggests that Basic Pilot is on its way to becoming a staple of American immigration policy. However, in light of the problems facing employers, the real question is whether Basic Pilot provides a more comprehensive method than private enforcement for deterring illegal immigration and addressing employer dependency on undocumented labor.

B. Basic Pilot Provides a Better Solution

As discussed, IRCA and private enforcement actions have many disadvantages for employers. Basic Pilot, however, produces the opposite result. By drawing a bright line for employers, the system reduces de facto “deputization” and increases the ability of immigration officials to prosecute unscrupulous employers across-the-board. These advantages over private enforcement highlight Basic Pilot's ability to provide a better solution for illegal immigration.

1. Basic Pilot Reduces Employer Deputization

The most notable advantage of Basic Pilot is its effectiveness in reducing employer responsibility for document verification. Both IRCA and private lawsuits under RICO require employers to determine whether their compliance efforts would be satisfactory to the “reasonable man.”190 In contrast, Basic Pilot decreases employer responsibility for the document review process. Unlike IRCA, the burden of deciding whether an employee's documentation is authentic ultimately rests with immigration officials, who are better equipped to make the determination.191 Employers are provided a confirmation or non-confirmation from immigration officials, and are not forced to rely on their own subjective decision of whether the employee's documents look reasonably genuine.192 As one North Carolina employer noted, Basic Pilot “removes the guesswork when identifying legitimate documents . . . .”193

Basic Pilot further reduces employer deputization by requiring employees, not employers, to follow-up on a non-confirmation notice.194 Employers no longer need to worry about whether to request additional documentation from the employee and face a potential discrimination suit. Under Basic Pilot, employees are ultimately responsible for demonstrating the validity of their information to employers, and employers are spared the time, expense, and liability of ensuring the validity of each and every employee.

Basic Pilot also gives employers the option to use what are called “Designated Agents” to conduct their Basic Pilot compliance.195 Designated Agents are companies that perform Basic Pilot compliance for other businesses.196 In 2005, DHS approved the first such agent, Form I-9 Compliance, LLC, based in Newport Beach, California.197 The company states that its service will “[c]ost-effectively reduce [employers'] exposure to government audits, financial penalties and negative publicity resulting from non-compliance.”198 While this new method to reduce employer deputization is still in its infancy, it offers another tool to enable employers to reduce their potential culpability and protect themselves from costly immigration sanctions.

Reduced deputization also has the benefit of decreasing employers' incentive to engage in potentially discriminating behavior.199 IRCA placed employers in the undesirable position of weighing the risks between potential immigration sanctions and discrimination suits.200 Private enforcement actions arguably tipped the scales in favor of the latter.201 The bright line provided by Basic Pilot removes employers' discretion in deciding whether documents offered by employees are valid. In fact, employers are not allowed to “prescreen” prospective employees using the system prior to actually hiring the employee.202 As such, employees with questionable work-authorization should receive the benefit of the doubt in the hiring decision, and employers no longer have the same incentive to deny them employment.203 Thus, the definitive confirmation or non-confirmation notice has benefits for both employees and employers.

2. Basic Pilot Reduces Selective Enforcement

Basic Pilot's second advantage over private enforcement and IRCA lies in its ability to decrease selective enforcement. IRCA provided no oversight tool for immigration authorities, which hampered their enforcement efforts.204 Officials were forced to review documentation information on an ad hoc basis because employers were not required to submit compliance documents without a specific request from immigration authorities.205 As a result, the cumbersome process allowed most employers to continue their hiring practices without fear of being targeted.206

Basic Pilot, however, helps resolve this tension. The program provides immigration officials with direct information about an employee's status by allowing them to monitor confirmation and non-confirmation notices.207 ICE may contact and, if necessary, bring charges against employers who ignore non-confirmation notices.208 Thus, Basic Pilot supplies a previously non-existent oversight tool to immigration authorities, enabling officials to better identify unscrupulous employers and focus their limited resources. Furthermore, by increasing the efficiency of the agencies, officials can more accurately identify targets for worksite raids.209

Basic Pilot also helps to expose culpable employers. As shown above, private lawsuits require a showing that employers “knowingly” hired illegal aliens-a heavy burden for any plaintiff.210 Basic Pilot provides a method to make employers easier to prosecute under the “knowing” standard.211 The program's bright line provides enforcement authorities a clearer view of employers who overstep the boundaries of the law. It has been suggested that because employers may simply choose not to run a questionable employee through the system, the self-compliance aspect of Basic Pilot undermines the effectiveness of the program.212 However, if employers engage in such a practice, Basic Pilot could actually help create an inference that the employer “knowingly” hired illegal aliens. For example, if an employer is investigated by ICE and found to have employed illegal aliens, failure to utilize Basic Pilot may work to show increased culpability. As one commentator suggested, the loss of “deniability . . . [is] probably why so few companies have signed up.”213

Basic Pilot also decreases compliance and litigation costs for employers. Private enforcement actions place heavy costs on both plaintiffs and accused employers. Moreover, following a government raid an employer may face an immediate increase in the cost of labor. Unlike IRCA and private enforcement, Basic Pilot provides a method of gradually weaning employers from their dependence on illegal labor. Congressional efforts to codify electronic verification have all been stipulated on the inclusion of a gradual phase-in of the system.214 Current proposals would not require employers to implement the system any earlier than a year and a half after passage of a bill.215 Consequently, employers could dilute the expense of transition over a period of months, or even years, rather than a day as in the case of Swift.216

Significantly, participation in Basic Pilot is currently voluntary.217 Without mandatory participation by all employers, the ability of the system to have a potent effect on selective enforcement is limited. However, since both the House and Senate have passed legislation that would require across-the-board employer participation, Congress appears to have concluded that mandatory participation in Basic Pilot is the cornerstone of any new immigration reform.218 Until the system is utilized on a national scale, however, the benefits of reducing selective enforcement remain limited. Even on a voluntary basis, however, Basic Pilot still has an advantage over private enforcement and IRCA. As more and more employers enroll in the program and grant immigration authorities increased oversight of their hiring practices, those who resist participation in the program are increasingly likely to become targets for future government enforcement efforts.

3. Pilot Provides Partial Solution to Counterfeit Documentation

Finally, Basic Pilot provides a method to decrease the utility of counterfeit documentation. Fraudulent documentation produces a plethora of problems for employers and frustrates the effectiveness of IRCA and private lawsuits. Basic Pilot addresses this problem by using electronic databases that match employee information with government records. A recent GAO study found that Basic Pilot “assists participating employers with identification of false documents used to obtain employment by comparing employees' . . . information with information in [government] databases.”219 However, in a later report the GAO found “the program cannot expose identity theft.”220 Consequently, although Basic Pilot is largely successful in preventing document fraud, the most prevalent form of counterfeiting, it has been ineffective in regards to identity theft.

Despite Basic Pilot's limitation, the GAO found that the program has potential advantages in the fight against identity theft: “[C]onfirmations of numerous queries of the same social security number could indicate the social security number is being used fraudulently or that an unscrupulous employer is knowingly hiring unauthorized workers by accepting the same social security numbers for multiple employees.”221 Moreover, Basic Pilot's ability to block document fraud requires that counterfeiters move to identity fraud, which is more expensive and less available.222 Thus, Basic Pilot could have at least an ancillary benefit in preventing identity theft. There are, however, federal laws currently preventing federal authorities from taking full advantage of this benefit. Michael Chertoff, Secretary of DHS, stated his dissatisfaction with the current law in a statement following the Swift raid:

[A] question that arises is why is it that people are able to get away with using genuine identities . . . to get work? In other words, why doesn't Basic Pilot cover this, too? And the answer is, there's a legal obstacle. The law currently does not allow the Social Security Administration to refer to [DHS] instances where the same Social security number is used on multiple occasions in multiple work places as a basis for obtaining jobs. 223

Supporting this view, the GAO found that increased sharing of information between the Internal Revenue Service (IRS), DHS, and SSA could lead to a reduced number of unauthorized workers.224 Whether Congress will act on these suggestions is still an open question. At present, Basic Pilot has only a limited application in exposing identity theft.

Basic Pilot provides many advantages to employers over IRCA and private enforcement. Reduced employer deputization and selective enforcement by immigration officials provides a significant layer of protection for employers, and a more realistic chance at a level economic playing field. However, Basic Pilot's effectiveness is limited by the lack of full coordination among federal agencies and mandatory employer participation. Despite these limitations, Basic Pilot offers many advantages for employers who wish to reduce their potential liability for immigration violations.