Employers Taking the Heat on Immigration

The feds are stepping up audits and fines while states are imposing even harsher penalties on employers who hire illegal immigrants.

In the battle against illegal immigration, the latest tactic is to hammer employers, putting the onus on them to discourage illicit crossings by ensuring that illegals aren’t able to find U.S. jobs.

Eighteen states now require the use of E-Verify, Uncle Sam’s massive national database of legitimate Social Security numbers and their owners. The exact provisions vary from state to state; some exempt small firms from the requirement, for example. Some hit noncompliant employers very hard. Arizona, Mississippi and Alabama, for instance, can suspend or even revoke the business licenses of companies that knowingly hire folks with no authorization to work. In South Carolina, hiring illegal immigrants is a felony punishable by up to five years in prison.

Now that the Supreme Court has upheld Arizona’s law, other states are headed down similar paths. For companies with employees in multiple states, this hodgepodge approach is a nightmare, making them toe different marks in different locations.

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In addition, E-Verify remains a flawed system. It’s prone to errors, particularly false negatives. Women who change surnames after marrying or divorcing, for example, often get a thumbs-down despite having a green card.

Meanwhile, the feds are cracking down on employers via paperwork audits. With just three days’ notice, immigration officials swoop in to check the I-9 forms that firms must file attesting to the eligibility of new employees to work in the U.S. Both the number of audits conducted and the amount of fines collected are way up in recent months, and even technical errors, such as lack of a ZIP code on an address, are prompting fines.

There’s little hope of relief for at least two or three years. Business groups are pushing for a uniform federal law on E-Verify to preempt the patchwork quilt of state rules and regulations. They also want to raise the number of H-1B visas available for highly skilled workers, knowing that when the economy picks up, needs will quickly dwarf the current quota.

Odds are President Obama will renew his pledge for comprehensive reform in the coming months. He will be eager to keep the growing Hispanic population voting blue in 2012.

But the politics of immigration law make even limited legislation a long shot. Democrats will push to add a path for illegals who are already here to earn U.S. citizenship. Republicans will want to end automatic citizenship for children born in the U.S., if their parents are illegal. GOP lawmakers will also insist on stricter deportation policies.

Moreover, Congress has plenty of other pressing problems to deal with — sluggish economic growth, high unemployment, an out-of-control federal budget, among others. So an overhaul of the immigration system isn’t likely to get a lot of attention between now and the 2012 election.

And as long as the feds stay quiet, states will march in to fill the void.

Martha Lynn Craver
Associate Editor, The Kiplinger Letter