BILL ANALYSIS �
Senate Committee on Labor and Industrial Relations
Ted W. Lieu, Chair
Date of Hearing: June 8, 2011 20011-2012 Regular
Session
Consultant: Alma Perez Fiscal:No
Urgency: No
Bill No: AB 1236
Author: Fong
Version: As amended March 31, 2011
SUBJECT
Employment: hiring practices: electronic employment verification
KEY ISSUE
Should the Legislature prohibit the state, a city, a county, or
a special district from requiring that employers use an
electronic employment verification system?
PURPOSE
To enact provisions of law related to the use of federal
electronic employment verification systems by California
employers for hiring purposes.
ANALYSIS
Under existing law, it is illegal for a person or other entity
to "knowingly" hire, recruit, or refer for employment an
unauthorized individual or any individual without complying with
specified employment verification procedures. Among other
things, the law requires employers to verify that every new hire
is either a U.S. citizen or authorized to work in the United
States. In 1996, Congress passed the Illegal Immigration Reform
and Immigrant Responsibility Act (IIRIRA), which required the
Social Security Administration (SSA) and the Immigration and
Naturalization Service (INS), now the U.S. Citizenship and
Immigration Service (USCIS), to initiate employment verification
pilot programs.
Existing federal law requires that all employers have new
employees complete form I-9, Employment Eligibility
Verification, upon hire. Existing law also requires new
employees, within three days of being hired, to show their
employers documentation establishing identity and eligibility to
work in the United States. To comply with federal requirements,
the employer has to certify on the I-9 form that the documents
presented by the employee reasonably appeal to be genuine on
their face, and the employer must retain such information in its
files for three years after employee's date of hire, or one year
after the date the worker's employment is terminate, whichever
is later.
Under federal law , the E-Verify Program (previously known as the
Basic Pilot Program) of the U.S. Department of Homeland Security
(DHS), implements the employment verification mandate under the
IIRIRA. The E-Verify Program is an internet-based system
operated by the USCIS in partnership with the SSA. The E-Verify
Program enables participating employers to use the program, on a
voluntary basis, to verify that the employees they hire are
authorized to work in the United States. In addition, employers
are required by federal law to have new employees complete form
I-9 prior to submitting an E-Verify inquiry.
Both state and federal law contains various provisions
prohibiting employment discrimination on different bases,
including, but not limited to, the race, color, sex, religion,
or marital status of a person. In addition, existing federal
law pertaining to E-Verify specifies, among other things, that:
� Employers may not use E-Verify to discriminate against
any job applicant or new hire on the basis of his/her
national origin, citizenship, or immigration status;
� Employers may not use the system to pre-screen
applicants for employment;
� Employers may not verify newly hired employees
selectively; and
� Employers cannot take any adverse action against an
employee based upon E-Verify unless the program issues a
Final Non-confirmation.
Hearing Date: June 8, 2011 AB 1236
Consultant: Alma Perez Page 2
Senate Committee on Labor and Industrial Relations
Under existing California law , all protections, rights, and
remedies available, except any reinstatement remedy prohibited
by federal law, are accessible to all individuals who have
applied for employment regardless of their immigration status,
or who are or have been employed in the state. In addition, for
purposes of enforcing state labor and employment law, a person's
immigration status is irrelevant to the issue of liability or in
proceedings, where no inquiry is permitted into a person's
immigration status except where the person seeking the inquiry
has shown, by clear and convincing evidence, that the inquiry is
necessary in order to comply with federal immigration law.
This Bill would create the Employment Acceleration Act of 2011
to enact provisions of law related to the use by employers of
specified federal electronic employment verification systems.
Specifically, this bill would:
1. Except as required by federal law or as a condition of
receiving federal funds, prohibit the state, a city,
county, city and county, or special district from requiring
an employer to use an electronic employment verification
system, including under the following circumstances:
a. As a condition of receiving a government
contract;
b. As a condition of applying for or maintaining
a business license; and,
c. As a penalty for violating licensing or other
similar laws.
2. Define an "electronic employment verification system" as
a system that allows employers to electronically verify
workers' employment authorization with the federal
government, including the Basic Pilot (renamed in 2007 as
E-Verify) Program. However, this term does not include the
I-9 Employment Eligibility Verification form or any other
employment verification systems that are required by
federal law.
3. Make several findings and declarations pertaining to the
deficiencies of electronic employment verification
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Senate Committee on Labor and Industrial Relations
programs.
COMMENTS
1. Need for this bill?
The effectiveness of E-Verify has been questioned by the U.S.
Government Accountability Office (GAO). On December 17, 2010,
the GAO released a report to several Committees in the House
of Representatives, titled "Employment Verification: Federal
Agencies Have Taken Steps to Improve E-Verify, but Significant
Challenges Remain." According to GAO, the E-Verify system has
improved since its creation, however, the system still faces
challenges, including the rate of tentative non-confirmation
letters (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
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Senate Committee on Labor and Industrial Relations
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.
This bill would, with the exception of federal requirements,
prohibit the state, a city, county, city and county, or
special district from requiring an employer to use an
electronic employment verification system.
2. Background on E-Verify:
E-Verify is a voluntary internet-based system operated by the
USCIS in partnership with the SSA. The purpose of E-Verify is
to electronically compare information entered on the I-9 form
with records contained in SSA and USCIS databases to verify
the identity and employment eligibility of newly hired
employees. E-Verify is a re-branding of its predecessor, the
Basic Pilot/Employment Eligibility Verification Program, which
has been in existence since 1997.
Currently, E-Verify is free to employers and available in all
50 states, the District of Columbia, Puerto Rico, Guam and the
U.S. Virgin Islands. According to USCIS, the program is
currently able to compare information taken from the I-9 form
against more than 425 million records in SSA's database, and
more than 60 million records in DHS's immigration databases.
New enhancements to E-Verify also includes naturalization data
which can help to instantly confirm the citizenship status of
naturalized U.S. citizens; however, naturalized citizens who
have not yet updated their records with SSA are the largest
category of work authorized persons who initially face an SSA
mismatch. If an employee receives an SSA tentative
non-confirmation (TNC), they have the option of visiting an
SSA field office to update their record or if the employee is
a naturalized citizen, the employee may choose to call USCIS
directly to resolve the TNC. The employee must be given eight
federal government work days to contact the appropriate
federal agency to contest the information mismatch.
Hearing Date: June 8, 2011 AB 1236
Consultant: Alma Perez Page 5
Senate Committee on Labor and Industrial Relations
On March 21, 2011, USCIS launched E-Verify Self Check, the
first online E-Verify program offered directly to the U.S.
workforce. This program enables individuals to voluntarily
check their own employment eligibility status. USCIS is
releasing E-Verify Self Check in phases, with the first phase
only accessible to users who live in Arizona, Idaho, Colorado,
Mississippi, Virginia, or the District of Columbia.
3. E-Verify Required for Federal Contracts:
On June 9, 2008, DHS designated E-Verify as the electronic
employment eligibility verification system that all federal
contractors must use as required by Executive Order 12989.
President George W. Bush amended the executive order in order
to direct all federal departments and agencies to require
contractors and subcontractors, as a condition of each future
federal contract, to agree to use an electronic employment
verification system (as designated by the Secretary of
Homeland Security) to verify the employment eligibility of all
persons hired during the contract term and all persons
performing work within the U.S. on a federal contract. In
addition, 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.
The Executive Order 12989 was set to begin on January 15,
2009, however in late December 2008, five trade groups led by
the U.S. Chamber of Commerce brought suit in federal court
challenging the executive order. The final rule became
effective September 8, 2009 and requires certain federal
contractors, through language inserted into their contract, to
begin using E-Verify to verify their new and existing
employees.
4. Local Ordinances:
Some cities and municipalities in California have recently
begun passing local ordinances to require employer to use the
E-Verify program. For example, the City of Lancaster, as of
December 31, 2009, requires all employers to verify the
Hearing Date: June 8, 2011 AB 1236
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Senate Committee on Labor and Industrial Relations
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.
5. Related activity in other States:
A number of states have attempted 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. Several states including
Arizona, Arkansas, Colorado, Hawaii, Iowa, Michigan,
Tennessee, Texas and West Virginia, have all enacted
legislation to require the use of E-Verify or otherwise
require public agencies or contractors to verify employment
eligibility of employees.
Other 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 tentative non-confirmation
notices within three years. That same year, DHS sued Illinois
and asked the federal courts to declare the law illegal.
According to DHS, the federal government could not comply with
the 99 percent determination requirement, and therefore the
new law would effectively preclude employers in Illinois from
enrolling in E-Verify, conflicting with the express intent of
Congress that E-Verify be made available to employers in all
fifty states. The Illinois law was scheduled to take effect on
January 1, 2008, however, 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 requirements 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
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Senate Committee on Labor and Industrial Relations
that they have received E-Verify training materials from DHS
and have completed the Computer Based Tutorial. Illinois law
also requires employers to acknowledge that they have posted
required notices in a prominent place clearly visible to
prospective employees.
6. Proponent Arguments :
According to the author, since its inception, the E-Verify
program has been plagued by a multitude of problems that
adversely affect both workers and businesses. The problem
with E-Verify and "no-match" letters, proponents argue, is
that they rely upon the SSA database to determine immigration
status which is something the SSA database was never intended
to do. Proponents argue that the SSA database is known to be
riddled with errors, and claim that over seventy percent of
those inaccuracies involve people who are working in the
country legally.
The author contends that the high error rate of E-Verify has
resulted in several potential employees being misidentified as
not being eligible for employment, and many having to utilize
financial and legal resources to resolve the discrepancies.
According to proponents, in many cases, the problems revealed
by a "no-match" letter result from confusion over the order or
spelling of a person's name and not from any immigration
violation. In addition, proponents argue, alongside the costs
of learning to actually utilize the program, a business would
suffer from delayed hiring and the cost of resolution to
mistaken identities. Proponents argue that businesses who 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.
Furthermore, proponents argue that the recent practice by some
cities and municipalities in California (Indio, Mission Viejo,
Palmdale, San Juan Capistrano, Victorville and Yucca Valley)
of passing local ordinances to require private employers to
use the E-Verify program, not only contradict the original
intent that the program be voluntary, but it also places a
financial and administrative burden on employers and subjects
Hearing Date: June 8, 2011 AB 1236
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Senate Committee on Labor and Industrial Relations
potential employees to false identification. According to the
author, this bill will provide employers the flexibility to
decide if participating in E-Verify would be beneficial to
their business. This bill does not prohibit the use of
E-Verify; rather it prohibits the state, cities, counties,
cities and counties, or special districts from requiring the
use of E-Verify by private employers.
7. Opponent Arguments :
None received.
8. Prior Legislation :
AB 1288 (Fong) of 2009: Vetoed by the Governor
This bill is almost identical to AB 1288 from 2009 which would
have prohibit the state, or a city, county, city and county,
or special district from requiring an employer other than one
of those government entities to use an electronic employment
verification system as a condition of receiving a government
contract, as a condition of applying for or maintaining a
business license, or as a penalty for violating licensing or
other similar laws. In his veto message, the Governor stated
that,
"The bill would create administrative burdens for employers
receiving government funds in that a June 6, 2008, federal
Executive Order 12989, as amended, requires all federal
contractors, as a condition of any future federal contract,
to use E-Verify to verify the employment eligibility of
their workers. Employers receiving government funds would
be required to sort out and identify complex funding
streams and comply with both the Executive Order and
provisions of this and other related laws. The bill also
raises the potential for increased claims and litigation by
placing new requirements in the Labor Code without also
defining how the requirements will be enforced. Moreover,
the bill implicates constitutional questions regarding the
State's authority to impose this prohibition against
charter counties and cities for matters that may constitute
municipal affairs."
Hearing Date: June 8, 2011 AB 1236
Consultant: Alma Perez Page 9
Senate Committee on Labor and Industrial Relations
AB 2076 (Fuentes) of 2008: Died on Senate Inactive File
AB 2076 would have prohibited any state, city, county or
special district from requiring any employer to use E-Verify,
as specified. AB 2076 is similar, but not identical, to this
bill.
SUPPORT
California Immigrant Policy Center - Co-Sponsor
Mexican American Legal Defense and Education Fund (MALDEF) -
Co-Sponsor
Agricultural Council of California
American Civil Liberties Union of California
American Federation of State, County and Municipal Employees,
AFL-CIO (AFSCME)
Asian American Center for Advancing Justice
Asian Pacific American Legal Center
California Association of Bed and Breakfast Inns
California Association of Health Facilities
California Chamber of Commerce
California Farm Bureau Federation
California Grain and Feed Association
California Grocers Association
California Hotel & Lodging Association
California Independent Grocers Association
California League of Food Processors
California Pear Growers
California Rural Legal Assistance Foundation
California Seed Association
California State Floral Association
Coalition for Humane Immigrant Rights of Los Angeles
Council of Mexican Federations
Empowering Pacific Islander Communities
Nisei Farmers League
Street Level Health Project
The Council of Mexican Federations
Western Growers
OPPOSITION
Hearing Date: June 8, 2011 AB 1236
Consultant: Alma Perez Page 10
Senate Committee on Labor and Industrial Relations
None received
Hearing Date: June 8, 2011 AB 1236
Consultant: Alma Perez Page 11
Senate Committee on Labor and Industrial Relations