BILL ANALYSIS Ó
AB 1236
Page 1
Date of Hearing: May 4, 2011
ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT
Sandre Swanson, Chair
AB 1236 (Fong) - As Amended: March 31, 2011
SUBJECT : Employment: hiring practices: electronic employment
verification.
SUMMARY : This bill establishes the Employment Acceleration Act
of 2011 to prohibit the state and a city, county, city and
county or a special district, from requiring an employer to use
an electronic employment verification system. Specifically,
this bill :
1)Prohibits, except as required by federal law, or as a
condition of receiving federal funds, the state and a city,
county, city and county, or special district, from requiring
employers to use an electronic employment verification system.
2)Prohibits the state and any city, county, city and county or
special district, from requiring employers to use the
electronic employment verification as a condition of receiving
a government contract or as a condition for maintaining a
business license.
3)Defines "electronic employment verification system" as an
employment verification system that allows employers to
electronically verify workers' employment authorization with
the federal government.
a) Excludes from this definition the I-9 Employment
Eligibility Verification (Form I-9) form or any other
employment eligibility systems that are required by federal
law.
4)Defines "employer" as an employer other than the state, a
city, county, city and county or special district.
EXISTING FEDERAL LAW :
1)Establishes the Immigration and Nationality Act of 1952 (INA)
to prohibit the known hiring of individuals who are not
authorized to work in the United States.
AB 1236
Page 2
a) Establishes the Immigration and Reform Act of 1986, as
an amendment to the INA, to prohibit the employers from
knowingly employing or continue to employ an employee who
is not authorized to work in the United States.
b) Establishes the Immigration Reform and Immigrant
Responsibility Act of 1996 (IIRIRA) (Public Law 104-208,
September 30, 1996), as an amendment to the INA, to require
employers to verify the identity and eligibility of every
employee.
2)Requires employers, no later than the time of hire, to file a
Form I-9 with the Department of Homeland Security (DHS) to
document that each new employee is authorized to work in the
United States.
a) Requires new employees, within three days of being
hired, to show their employers documentation establishing
identity and eligibility to work in the United States
3)Establishes E-Verify, formerly known as the Basic Pilot
Program, an internet-based system that allows an employer,
using information reported on an employee's Form I-9, to
determine the eligibility of that employee to work in the
United States.
4)Authorizes employers to use E-Verify on a voluntary and
limited basis to determine the employment eligibility of new
employees.
FISCAL EFFECT : Unknown
COMMENTS : According the author, cities and municipalities in
California have recently begun passing local ordinances to
require private employers to use the E-Verify program. The
author notes that such ordinances contradict the original intent
that the program be voluntary and place a financial and
administrative burden on employers.
The author asserts that, since its inception, the E-Verify
program has been plagued by a multitude of problems that
adversely affect both workers and businesses. According to the
author, a 2007 independent evaluation of the program
commissioned by DHS found that the E-Verify database is still
not sufficiently up to date to meet the requirements for
AB 1236
Page 3
accurate verification. The author notes that the mandated use
of E-Verify would impose a major financial and administrative
burden on businesses, especially small businesses. The author
states that alongside the costs of learning to utilize the
program, a business would suffer from delayed hiring and the
cost of resolution to mistaken identities. According to the
author, these businesses, which are already struggling in the
current economy, will face additional burdens and unanticipated
problems if they are required to use E-Verify, potentially
harming their ability to create new jobs and revenue.
In addition, the author notes that allowing local governments to
mandate the use of E-Verify creates an unequal playing field
within the state of California. According to the author,
businesses will be required to know the new regulations of each
local jurisdiction which could deter businesses from expansion.
The author states that this bill does not prohibit the use of
E-Verify; rather it prohibits the state, cities, counties,
cities and counties, and special districts from requiring the
use of E-Verify by private employers.
Background on the Basic Pilot Program/"E-Verify" Program
The Basic Pilot Program is a voluntary Internet-based program
administered DHS. The program allows employers to
electronically verify workers' employment eligibility by
accessing information in databases maintained by the Social
Security Administration (SSA) and the U.S. Citizenship and
Immigration Services (USCIS).
The Immigration Reform and Control Act of 1986 (IRCA) made it
unlawful for employers in the United States to "knowingly" hire
workers who are not eligible to be employed in the U.S.
Employers who knowingly hire such workers are subject to
penalties, referred to as "employer sanctions." All employers
are also required to verify employees' work eligibility, using
an official government form called the "Employment Eligibility
Verification Form" or "I-9 form."
To enable employers to complete the form, workers are required
to produce documents proving their identity and employment
eligibility. Only certain documents, as set out in the law, may
be used for this purpose, and IRCA's antidiscrimination
provisions provide that it is the worker's choice which of the
acceptable documents to present. To comply with IRCA, the
AB 1236
Page 4
employer has to certify on the I-9 form that the documents
presented by the employee reasonably appear to be genuine on
their face, and the employer must retain such information in its
files for three years after the employee's date of hire, or one
year after the date that the worker's employment is terminated,
whichever is later.
The Basic Pilot Program modifies these existing procedures by
also requiring the employer to submit an inquiry via computer to
SSA and USCIS regarding whether the information presented by the
individual matches records maintained by SSA and USCIS.
The Basic Pilot Program began as a pilot program created under
the federal Illegal Immigration Reform and Immigrant
Responsibility Act of 1996 IIRIRA. The program began operating
in five states in 1997 and a sixth state in 1999. In 2003,
Congress expanded the program to all 50 states and authorized it
until November 30, 2008 under the Basic Pilot Program Extension
and Expansion Act of 2003. In August 2007, DHS renamed the
program "E-Verify."
In August 2007, DHS also announced plans to issue regulations
that would require new federal contractors and vendors to use
E-Verify. Currently, there are over 200,000 entities that have
contracts with the federal government. DHS also announced that
it would be modifying its own procurement manual to designate a
vendor's participation in E-Verify as a positive consideration
in determining who is awarded a contract with DHS.
Some critics of the program have argued that it has been
hindered by inaccurate and outdated information in the DHS and
SSA databases and misuse of the program by employers. For
example, a 2002 report from Temple University Institute for
Survey Research and Westat titled "Findings of the Basic Pilot
Program Evaluation." Temple University Institute for Survey
Research and Westat (June 2002) and a 2007 Westat report titled
"Findings of the Web-Based Basic Pilot Evaluation" demonstrated
that "the database used for verification is still not
sufficiently up to the date to meet the ÝIllegal Immigration
Reform and Immigrant Responsibility Act] requirements for
accurate verification. Specific findings from these reports
included the following:
Approximately 17.8 million of SSA's records contain
discrepancies related to name, date of birth, or
AB 1236
Page 5
citizenship status.
Due to database errors, foreign-born workers
(including those who have become U.S. citizens) are 30
times more likely to be incorrectly-identified as
unauthorized to work.
Employers engage in prohibited activities such as
reemployment screening, adverse employment action based
on tentative no confirmations (TNCs) and failure to
inform workers of their rights under the program.
According to a 2010 report by the United States Government
Accountability Office (GAO) on Employment Verification, the
E-Verify system has improved since its creation. GAO notes,
however, that the system still faces challenges, including the
rate of TNCs that may occur because of an employee's failure to
update his or her nationalization status in SSA databases,
failure to report a change in his or her name to SSA or an
employer's error in entering the employee's data into the
E-Verify system. The GAO report also notes that of the 22,512
TNCs resulting from name mismatches in 2009; approximately 76
percent were for citizens and approximately 24 percent for
noncitizens. The GAO asserts that, an E-Verify mandate for all
new hires would generate approximately 60 million queries and of
these, about 164,000 citizens and noncitizens would receive a
name-related TNC each year. However, GAO warns that this number
would greatly increase if E-Verify were made mandatory for all
employees nationwide.
In addition, the GAO's report states that identify fraud remains
a challenge for the E-Verify system because employers may not be
able to determine if an employee is presenting genuine identity
and employment eligibility documents that are borrowed or
stolen. Their report also notes that E-Verify cannot detect
cases in which an unscrupulous employer assists unauthorized
employees. For example, employers may provide unauthorized
employees with legitimate documents or ignoring mismatches
between the photograph that appears on the employee's permanent
resident card and DHS's digital photograph of the individual.
GAO notes that of the 97.4 percent of employees who were
confirmed as work authorized by E-Verify in 2009, USICIS was
unable to determine how many employees E-Verify incorrectly
confirmed as authorized.
Local Ordinances
AB 1236
Page 6
The City of Lancaster, as of December 31, 2009, requires all
employers to verify the employment eligibility of all new hires
through the E-Verify program. If an employer violates this city
ordinance, the employer must fire the unauthorized employee and
sign a declaration under penalty of perjury within ten business
days stating that the employer has terminated the employment of
all undocumented workers. If the employer violates the
ordinance for a second time, the city may revoke the employer's
business license.
The City of Mission Viejo mandates the use of E-Verify for all
city employees and businesses licensed by the city. In addition,
Mission Viejo requires all businesses and contractors to use
E-Verify as a condition for the award or renewal of any city
contract. The city's ordinance mandates an automatic suspension
of a contract with a business if that business is found to
employ unauthorized workers.
Related Activity in Other States
A number of states have tried to address the use of E-Verify in
some manner, with some states attempting to mandate the use of
the program and others attempting to prohibit or restrict its
use.
For example, legislation to in some manner require the use of
E-Verify or otherwise require public agencies or contractors to
verify employment eligibility of employees has been enacted in
thirteen states, including the following: Arizona, Arkansas,
Colorado, Hawaii, Iowa, Michigan, Tennessee, Texas and West
Virginia.
Some states have attempted to restrict or prohibit the use of
E-Verify. Most notable among these is Illinois, which in 2007
enacted legislation that amended its Right to Privacy in the
Workplace Act to prohibit employers from enrolling in E-Verify
until the SSA and DHS databases are able to make a final
determination on 99 percent of TNCs notices within three days.
In September 2007, DHS sued Illinois and asked the federal
courts to declare the law illegal. DHS argues that, because the
federal government could not comply with the 99 percent
determination requirement, the new law would effectively
preclude employers in Illinois from enrolling in E-Verify.
AB 1236
Page 7
Therefore, DHS argues that enforcement of the Illinois law
conflicts with the express intent of Congress that E-Verify be
made available to employers in all fifty states.
The law was scheduled to take effect on January 1, 2008, but the
state agreed to not enforce the law pending the resolution of
the litigation. On January 1, 2010, the Illinois Right to
Privacy in the Workplace Act requires became effective. This law
requires employers who choose to use E-Verify, to sign an
attestation form at the time of enrollment in the program to
acknowledging that they have received E-Verify training
materials from DHS and have completed the Computer Based
Tutorial. Illinois law also requires employers must acknowledge
that they have posted required notices in a prominent place
clearly visible to prospective employees. Click here to learn
more. In addition, the Act required employers already enrolled
in E-Verify to complete the attestation form before Jan. 30,
2010.
In a letter supporting this bill, a coalition of businesses,
including the Western Growers and California Farm Bureau
Federation write that reports have raised disturbing questions
about the accuracy of the databases used by the E-Verify system
about the system's persistently high error rate. They believe
that E-Verify is not yet sufficiently reliable enough to cope
with the massive increase in usage that a usage mandate in
California would create. They assert that a creation of
patchwork of inconsistent and incompatible state and local laws
will only create needless confusion among employers.
PRIOR LEGISLATION
AB 2076 (Fuentes) of 2008 would have enacted provisions of law
related to the use by employers of specified federal electronic
employment verification systems. This bill died on the Senate
Inactive File.
AB 2102 (Walters) of 2008requires every state agency, and
persons who contract with state agencies, to verify the
employment eligibility of every employee using the E-Verify
system. AB 2102 failed passage in the Assembly Committee on
Business and Professions on April 15, 2008.
AB 2201 (Plescia) of 2008 would have required a public entity,
or a person that contracts with a public entity, to verify
AB 1236
Page 8
electronically the employment eligibility of an employee by
using the E-Verify system, or any successor to that system.
This bill was referred to the Assembly Committee on Business and
Professions, but was never heard.
AB 2421 (Huff) of 2008 would have, among other things, required
employers in California to use E-Verify beginning January 1,
2009. AB 2421 was referred to this Committee but was pulled
from hearing at the request of the author and never heard.
REGISTERED SUPPORT / OPPOSITION :
Support
Agricultural Council of California
American Civil Liberties Union
American Federation of State, County and Municipal Employees
American Friends Service Committee
Asian Pacific American Legal Center
California Farm Bureau Federation
California Grain and Feed Association
California Immigrant Policy Center
California Pear Growers
California Seed Association
California State Floral Association
Coalition for Humane Immigrant Rights of Los Angeles
County of Santa Clara, Board of Supervisors
El Concilio
Empowering Pacific Islander Communities
Legal Aid Society-Employment Law Center
Los Amigos of Orange County
National Immigration Law Center
National Network for Immigrant and Refugee Rights
Nisei Farmers League
Numerous Individuals
Priority Africa Network
South Asian Network
Street Level Health Project
The Council of Mexican Federations
Warehouse Workers United
Western Growers
Opposition
None on file.
AB 1236
Page 9
Analysis Prepared by : Shannon McKinley / L. & E. / (916)
319-2091