E-Verify Mandate Would Impose New Costs on American Businesses, Workers

E-Verify Mandate Would Impose New Costs on American Businesses, Workers

New Study Find Employment Verification System Will Cost $8.5 Billion Annually
April 22, 2013

WASHINGTON, D.C., April 22, 2013 – If the Senate’s comprehensive immigration reform proposal becomes law, one provision alone—that employers use E-Verify to confirm work eligibility—will cost businesses, workers and government $8.5 billion per year, according to an analysis by the Competitive Enterprise Institute.

The study, based primarily on publicly available federal data, concluded businesses will pay $2.55 billion annually in E-Verify operational costs and government would spend $4.1 billion in setup costs—$2.4 billion more than projected in the White House’s draft legislation, which exempted employers with fewer than five workers.

The system will actually force businesses to continue to employ, train, and pay workers who fail the initial E-Verify check to give them time to appeal a potential error, allowing unauthorized employees seven or more weeks of employment. The study, conducted by David Bier, CEI’s immigration policy analyst, found this provision will cost employers nearly $4 billion per year nationwide in costs associated with recruiting and retraining these workers.

All for something Bier says will not work as intended. “E-Verify will not end illegal hiring because the system can be exploited through long appeals and identity theft,” Bier said. “Moreover, businesses simply pass along the costs and risks of penalties to unauthorized employees through lower wages.”

Workers will be hit hard as well. About 180,000 authorized workers per year will have to spend $280 each to sort out erroneous initial non-confirmations at Social Security offices. Another 40,000 workers each year might lose their jobs entirely because of erroneous final non-confirmations, costing them $134 million in lost wages per year.

“Few people understand that E-Verify is not just any other regulation,” Bier said. “It is unprecedented in its scope, imposing responsibilities on not just every single American business, but every single American worker. We should not accept Congress' failure to create a system that eliminates illegal immigration at the border. It must find solutions that do not impose the responsibilities of enforcement on American citizens.”

>> Read the full Web Memo here.