[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]


 
   ELECTRONIC EMPLOYMENT VERIFICATION SYSTEMS: NEEDED SAFEGUARDS TO 
                   PROTECT PRIVACY AND PREVENT MISUSE

=======================================================================

                                HEARING

                               BEFORE THE

                      SUBCOMMITTEE ON IMMIGRATION,
                CITIZENSHIP, REFUGEES, BORDER SECURITY,
                         AND INTERNATIONAL LAW

                                 OF THE

                       COMMITTEE ON THE JUDICIARY
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               __________

                             JUNE 10, 2008

                               __________

                           Serial No. 110-132

                               __________

         Printed for the use of the Committee on the Judiciary


      Available via the World Wide Web: http://judiciary.house.gov


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                       COMMITTEE ON THE JUDICIARY

                 JOHN CONYERS, Jr., Michigan, Chairman
HOWARD L. BERMAN, California         LAMAR SMITH, Texas
RICK BOUCHER, Virginia               F. JAMES SENSENBRENNER, Jr., 
JERROLD NADLER, New York                 Wisconsin
ROBERT C. ``BOBBY'' SCOTT, Virginia  HOWARD COBLE, North Carolina
MELVIN L. WATT, North Carolina       ELTON GALLEGLY, California
ZOE LOFGREN, California              BOB GOODLATTE, Virginia
SHEILA JACKSON LEE, Texas            STEVE CHABOT, Ohio
MAXINE WATERS, California            DANIEL E. LUNGREN, California
WILLIAM D. DELAHUNT, Massachusetts   CHRIS CANNON, Utah
ROBERT WEXLER, Florida               RIC KELLER, Florida
LINDA T. SANCHEZ, California         DARRELL ISSA, California
STEVE COHEN, Tennessee               MIKE PENCE, Indiana
HANK JOHNSON, Georgia                J. RANDY FORBES, Virginia
BETTY SUTTON, Ohio                   STEVE KING, Iowa
LUIS V. GUTIERREZ, Illinois          TOM FEENEY, Florida
BRAD SHERMAN, California             TRENT FRANKS, Arizona
TAMMY BALDWIN, Wisconsin             LOUIE GOHMERT, Texas
ANTHONY D. WEINER, New York          JIM JORDAN, Ohio
ADAM B. SCHIFF, California
ARTUR DAVIS, Alabama
DEBBIE WASSERMAN SCHULTZ, Florida
KEITH ELLISON, Minnesota

            Perry Apelbaum, Staff Director and Chief Counsel
      Sean McLaughlin, Minority Chief of Staff and General Counsel
                                 ------                                

          Subcommittee on Immigration, Citizenship, Refugees, 
                 Border Security, and International Law

                  ZOE LOFGREN, California, Chairwoman

LUIS V. GUTIERREZ, Illinois          STEVE KING, Iowa
HOWARD L. BERMAN, California         ELTON GALLEGLY, California
SHEILA JACKSON LEE, Texas            BOB GOODLATTE, Virginia
MAXINE WATERS, California            DANIEL E. LUNGREN, California
WILLIAM D. DELAHUNT, Massachusetts   J. RANDY FORBES, Virginia
LINDA T. SANCHEZ, California         LOUIE GOHMERT, Texas
ARTUR DAVIS, Alabama
KEITH ELLISON, Minnesota
ANTHONY D. WEINER, New York

                    Ur Mendoza Jaddou, Chief Counsel

                    George Fishman, Minority Counsel


                            C O N T E N T S

                              ----------                              

                             JUNE 10, 2008

                                                                   Page

                           OPENING STATEMENTS

The Honorable Zoe Lofgren, a Representative in Congress from the 
  State of California, and Chairwoman, Subcommittee on 
  Immigration, Citizenship, Refugees, Border Security, and 
  International Law..............................................     1
The Honorable Steve King, a Representative in Congress from the 
  State of Iowa, and Ranking Member, Subcommittee on Immigration, 
  Citizenship, Refugees, Border Security, and International Law..     2
The Honorable Lamar Smith, a Representative in Congress from the 
  State of Texas, and Ranking Member, Committee on the Judiciary.     4
The Honorable John Conyers, Jr., a Representative in Congress 
  from the State of Michigan, and Chairman, Committee on the 
  Judiciary......................................................     6

                               WITNESSES

The Honorable Ken Calvert, a Representative in Congress from the 
  State of California
  Oral Testimony.................................................     7
  Prepared Statement.............................................    10
The Honorable Heath Shuler, a Representative in Congress from the 
  State of North Carolina
  Oral Testimony.................................................    11
  Prepared Statement.............................................    13
The Honorable Sam Johnson, a Representative in Congress from the 
  State of Texas
  Oral Testimony.................................................    15
  Prepared Statement.............................................    19
The Honorable Gabrielle Giffords, a Representative in Congress 
  from the State of Arizona
  Oral Testimony.................................................    21
  Prepared Statement.............................................    27
Mr. Jonathan ``Jock'' Scharfen, Acting Director, United States 
  Citizenship and Immigration Service
  Oral Testimony.................................................    45
  Prepared Statement.............................................    47
Ms. Carolyn F. Shettle, Ph.D., Senior Study Director, WESTAT
  Oral Testimony.................................................    58
  Prepared Statement.............................................    60
Mr. Timothy Sparapani, Senior Legislative Counsel, Washington 
  Legislative Office, American Civil Liberties Union
  Oral Testimony.................................................    68
  Prepared Statement.............................................    70
Christopher J. Williams, Esquire, Director, Working Hands Legal 
  Clinic
  Oral Testimony.................................................    81
  Prepared Statement.............................................    82
Ms. Glenda Wooten-Ingram, Director of Human Resources, Embassy 
  Suites Convention Center
  Oral Testimony.................................................    84
  Prepared Statement.............................................    85

                                APPENDIX

Material Submitted for the Hearing Record........................    93


   ELECTRONIC EMPLOYMENT VERIFICATION SYSTEMS: NEEDED SAFEGUARDS TO 
                   PROTECT PRIVACY AND PREVENT MISUSE

                              ----------                              


                         TUESDAY, JUNE 10, 2008

              House of Representatives,    
      Subcommittee on Immigration, Citizenship,    
   Refugees, Border Security, and International Law
                                Committee on the Judiciary,
                                                    Washington, DC.

    The Subcommittee met, pursuant to nall, at 10:05 a.m., in 
room 2141, Rayburn House Office Building, the Honorable Zoe 
Lofgren (Chairwoman of the Subcommittee) presiding.
    Present: Representatives Lofgren, Gutierrez, Jackson Lee, 
Waters, Sanchez, Conyers, King, Gallegly, Goodlatte, Lungren, 
and Smith.
    Staff Present: Traci Hong, Majority Counsel; Andres 
Jimenez, Majority Professional Staff Member; George Fishman, 
Minority Counsel.
    Ms. Lofgren. The hearing on the Subcommittee on 
Immigration, Citizenship, Refugees, Border Security, and 
International Law will come to order.
    I would like to welcome our Subcommittee Members, our 
witnesses, and members of the public to the Subcommittee's 
hearing on Electronic Employment Verification Systems, 
otherwise known as EEVS, systems which, if made mandatory as 
some have proposed, would affect all 163 million United States 
workers and 7 million employers in the United States.
    In this hearing, I look forward to examining how U.S. 
Workers may be impacted by a mandatory EEVS and explore ways to 
protect U.S. Workers from unintended consequences of EEVS error 
and/or potential misuse.
    Last year, the Immigration Subcommittee held two hearings 
on Employment Eligibility Verification Systems in the context 
of comprehensive immigration reform. The first hearing, on 
April 24, 2007, examined problems with the current paper-based 
system as well as the Electronic Employment Verification 
System. And the second hearing, on April 26, 2007, explored 
proposals to improve employment eligibility verification with 
emphasis on the EEVS. At the time, four bills mandating the use 
of an EEVS had been introduced in the House of Representatives 
in the 110th Congress. There are now 11 bills pending before 
this Congress that would mandate the use of EEVS.
    Currently, the only functioning EEVS is known as Basic 
Pilot or E-Verify. It is a voluntary program. Less than 1 
percent of all employers in the U.S. are currently enrolled to 
use E-Verify. In addition, the Government Accountability Office 
says that only half of the registered employers are active 
users who have used the system at least once. At the current 
level of use, according to DHS, in August last year, E-Verify 
received approximately 2 million queries a year. If E-Verify is 
made mandatory for all employers, it would be 63 million 
queries a year for new employees. And there are many proposals 
that would go beyond verification of new employees to include 
existing, and there are 163 million estimated workers in the 
United States at this time.
    As we consider mandatory EEVS for all employees, we should 
consider problems in the existing program to avoid problems on 
a larger scale. Some of the issues we hope to consider today 
stem from reports produced by our own Government, a 
nongovernmental research corporation, and university. These 
reports raise concerns about U.S. workers being wrongfully 
denied work authorization under E-Verify.
    In April 2007, the Service Employees International Union 
testified before this Committee that, unless database errors 
are cured, 24,000 of the 300,000 estimated workers in each 
congressional district would be erroneously denied the 
eligibility to work by E-Verify. That did catch our attention, 
because all 24,000 of those American citizens will be calling 
our offices.
    The reports have also documented some employer misuse of E-
Verify. A 2007 Westat report states that 16 percent of 
employers reported that they had failed to train all of their 
relevant staff on their system. In addition, although E-Verify 
prohibits registered employers from using E-Verify for pre-
employment screening of job applicants, this practice is common 
among employers. Almost one-third, 31 percent, reported using 
E-Verify to verify employment eligibility before the employee's 
first day of paid work, including many who used pre-screening 
at the time of the employee's application.
    Employers also reported significant difficulty meeting the 
requirement of verifying a new employee's information within 3 
days of the employee's first day of work. According to Westat, 
GAO, and other outside experts, anyone who claims to be an 
employer can sign up to use E-Verify by signing an MOU with DHS 
and FSA, thereby obtaining the ability to access very private 
information. So we want to make sure that whatever we do as we 
move forward does keep secure the private information of our 
Americans.
    These are just some of the issues that have been raised. 
Before the Congress moves forward on an effort to expand this 
system, we want to consider the issues thoroughly so that they 
may be appropriately addressed. And I hope that this hearing 
will provide us with a thorough understanding of these issues 
and the opportunity to identify ways to address them 
successfully.
    I recognize our Ranking Member, Steve King, for his opening 
statement.
    Mr. King. Thank you, Madam Chairman.
    For the past decade, the Basic Pilot Program has given 
American employers a fast and easy method to ensure that their 
new employees are genuinely eligible to work in this country. 
Employers are signing up in droves, about 1,000 new employers 
per week, and that is also being inspired because some States 
have mandated that their home State employers use the Basic 
Pilot Program now referred to as E-Verify by DHS.
    Basic pilot allows employers to check the Social Security 
numbers and alien identification numbers of new employees 
against Social Security Administration and DHS records in order 
to ensure that they match. This is what the American people 
want; 79 percent of Americans polled believe the Federal 
Government should require all employers to verify U.S. 
citizenship or lawful presence for each job applicant by a 
telephone or online check of a Federal database.
    The Basic Pilot Program reduces--and I am going to repeat 
that--the Basic Pilot Program reduces job discrimination. The 
2007 Westat report on the Internet-based Basic Pilot Program 
found that most users reported that the Web-based Basic Pilot 
Program made them neither more nor less willing to hire illegal 
immigrants--or hire immigrants, excuse me, legal workers. 
However, when change was reported, it was almost always in the 
direction of making employers more willing hire more 
immigrants.
    Now, the requirements of Basic Pilot Program do not always 
make sense for employers. For example, the way it prohibits 
employers from verifying individuals before they are offered a 
job; no employer wants to be forced to keep an illegal 
immigrant on the payroll for perhaps weeks while they go 
through secondary verification, and that is a burden. Employers 
should be able to check all job candidates before they are 
hired as long as they do so in a nondiscriminatory manner. 
Employers should also be able to verify their existing 
employees that they are work-authorized, not just for new 
hires. Not only will this give employers peace of mind, it will 
ensure that we don't simply allow all 7 million employed 
illegal immigrants to keep their current job.
    This being said, USCIS does need to ensure that all 
employers who use the Basic Pilot Program adhere to the 
Memorandum of Understanding that they signed. USCIS is on the 
right track in beefing up its monitoring and compliance 
programs to better detect and deter potential misuse and abuse 
of the program by employers.
    The accuracy of the Basic Pilot Program is remarkable. The 
2007 Westat report revealed that just about 99 and a half 
percent--actually, it was 99.4 percent--of all work-authorized 
employees are immediately verified. Immediately verified.
    And the Basic Pilot Program is going to get even better. 
The system now automatically checks naturalization records 
before issuing a citizenship status mismatch. In addition, 
naturalized citizens who receive a mismatch are now able to 
contact DHS by phone to address the discrepancy. So it is 
getting better.
    U.S. Citizenship and Immigration Services is also dealing 
with the potential for identity theft in different ways. First, 
it has added a photo-screening capability. This allows 
employers to compare the photos of employment-authorized 
documents and permanent resident cards, and those that are 
presented by employees through the employers, and compare those 
pictures against the images stored in the USCIS databases. 
DHS's long-term goal is to allow employers to verify the photo 
on all identity documents that employees present.
    Second, in the future, the Basic Pilot Program will provide 
information on the suspicious multiple use of Social Security 
numbers in the context of Basic Pilot Program to ICE for 
investigation.
    Basic Pilot has proven its worth. It deserves to be made 
permanent, and employers deserve the right to be able to check 
the work eligibility of their entire workforces, not just new 
hires. I will shortly introduce legislation called the New IDEA 
Act. In fact, it is a refreshing of a bill that I introduced in 
the 109th Congress. That bill eliminates the deductibility of 
wages and benefits paid to illegals. It gives the employer safe 
harbor if he uses Basic Pilot/E-Verify, and it also extends Mr. 
Calvert's legislation and makes it permanent and allows 
employers to verify current employees as well as job 
applicants.
    I want to thank Mr. Calvert for introducing this 
legislation and having the vision more than 10 years ago to get 
us to this point where we are today. And I would ask this 
point, how do you perfect a system? We have a system that is 
almost perfect now. By a standard of measure, 1 out of 200 
legitimate job applicants is rejected by the system, and 
generally that is because they have failed to register a name 
change. That is not a Government problem, except that 
Government needs to cooperate and facilitate the correction of 
that. And I think soon we will see it will be 1 out of 400. And 
maybe we will hear that testimony today.
    So how do you correct a system? You use it. And the comment 
about access to very private information, I am signed up on 
Basic Pilot. I have used it in my office, and I don't have 
access to any private information except job applicant 
information. So perhaps we will get that issue illuminated a 
little bit as that hearing goes on.
    And then with regard to only 1 percent of employers use it 
and only 2 million hits a year compared to 63 million, we can 
grow this system to address this. We know how to do that, and 
it is--the answer is to use it.
    So, with that, I thank the witnesses for being here today. 
And, Madam Chairman, I look forward to their testimony, and I 
yield back the balance of my time.
    Ms. Lofgren. I understand that the Ranking Member of the 
full Committee would like to make a opening statement.
    Mr. Smith. Thank you, Madam Chair, I would.
    In 1986, Congress made it unlawful for employers to 
knowingly employ illegal immigrants. Congress also required 
employers to check the identity and work eligibility documents 
of all new employees. Unfortunately, the easy availability of 
counterfeit documents soon made a mockery of this process. 
Employers who didn't want to hire illegal immigrants had no 
choice but to accept documents they knew were likely to be 
false.
    Congress took action in the Illegal Immigration Reform and 
Immigrant Responsibility Act of 1996. The act created the Basic 
Pilot Program. For the last decade, this program has provided 
American employers who want to do the right thing with an 
effective tool to ensure that they are hiring a legal 
workforce. It ensures that new employees are not providing 
their employers with fake Social Security numbers.
    As the Basic Pilot Program has grown more popular, over 
69,000 employers Nationwide now participate, it has been the 
subject of some very unfair criticism, and I want to set the 
record straight.
    Participating employers are very happy with the Basic Pilot 
Program. Last year, an outside evaluation found that, ``most 
employers found the Web Basic Pilot to be an effective and 
reliable tool for employment verification, and 96 percent did 
not believe that it overburdened their staffs.''
    The accuracy of the databases that lie at the heart of the 
Basic Pilot Program has been unfairly maligned. However, the 
facts about these databases could not be better. Last year's 
outside evaluation found that in less than 1 percent, actually 
only 0.6 percent of cases, do employees who are briefly 
determined to be work-authorized receive a tentative 
nonconfirmation and undergo further review. This means, as the 
Ranking Member of the Subcommittee mentioned a while ago, that 
persons eligible to work receive immediate confirmation 99.4 
percent of the time. For the native born, 99.9 percent receive 
immediate confirmation. And for employees born outside the 
United States, it is 97 percent receive immediate confirmation.
    A common misperception is that secondary verification means 
error by a Federal agency. This is simply not the case. 
Secondary verification most often means that an illegal 
immigrant has been caught providing bogus information or that 
an employee has failed to update their records with the Social 
Security Administration. This fact is seldom acknowledged.
    Even when persons eligible to work have to go through 
secondary verification, they are largely satisfied with the 
services providing by SSA. Of the employees who contacted local 
SSA offices as part of the verification process, 95 percent 
said their work authorization problem was resolved in a timely, 
courteous, and efficient manner.
    Finally, it has been specifically alleged that the Social 
Security Administration's Inspector General has found the 
Agency's database to be inaccurate. However, the Inspector 
General actually stated that, ``we applaud the agency on the 
accuracy of the data we tested.''
    The Basic Pilot Program has worked well. In the vast 
majority of cases, employers find out immediately their new 
employees are work-authorized over 99 percent of the time, and 
legal workers receive instantaneous confirmation. We will hear 
testimony today from U.S. Citizenship and Immigration Services 
that they are putting improvements into place that will make 
the Basic Pilot Program even more responsive.
    Finally, I want to applaud the Administration's decision to 
require companies who contract with the Federal Government to 
use the Basic Pilot Program. This protects the American worker 
by ensuring that all Federal jobs, both direct and indirect, 
are reserved for legal workers.
    Thank you, Madam Chairman.
    Ms. Lofgren. Mr. Smith, thank you very much.
    I would now recognize the Chairman of the Committee, Mr. 
Conyers, for his opening statement.
    Chairman Conyers. Thank you, Chairwoman Lofgren, and 
Ranking Member Steve King.
    This is an important hearing on Electronic Employment 
Verification Systems, and we have a very distinguished panel. 
Representative Calvert started this, and then Representative 
Shuler wants to improve upon it. And now comes Representative 
Sam Johnson of Texas with his cohort, Representative Giffords, 
and they have got plan B.
    And so I want to commend the Chairwoman of the Committee 
and the Ranking Member for putting this kind of a hearing 
together today. It is very important.
    We are looking to sort out some of the facts and fictions 
about the way this program is operating and how we can improve 
the system. It sounds so simple, but there are 11 bills before 
this Committee already. They are basically plan A or plan B; 
but everyone's interest I think is commendable, because what we 
are trying to do is see how we can improve the Electronic 
Employment Verification System.
    It starts out so simple, and solutions seem quite logical: 
How do we deal with illegal immigration? All new hires must be 
checked against Social Security and Homeland Security databases 
to see if they are legally entitled to work in the United 
States. What is the problem? Well, the problem is, how does the 
system really work?
    Essentially, we can become a super giant Government 
database on all Americans and require American workers to be 
registered and checked for hiring. True or false? Well, we will 
get the answers from you four this morning.
    It will impose a burden on small businesses, whether their 
workforce is 100 percent American or includes some immigrants. 
True or false?
    It will drive immigrant workers even further underground. 
True or false?
    It will cost $17 billion in lost tax revenue. True or 
false?
    It will constitute a significant step toward a national 
identification card. Boo.
    So, let's get it on, Madam Chairman, and I thank you for 
this time.
    Ms. Lofgren. Thank you, Mr. Chairman.
    In the interest of proceeding to our witnesses, and mindful 
of our busy schedules, the opening statements of all other 
Members, without objection, will be made part of the record. 
And we will now go to our first panel.
    All four of our colleagues sitting before us have been 
active and leaders in this issue. We appreciate their being 
here with us here today.
    I am going to first introduce Congressman Ken Calvert, who 
was elected in 1992 and represents California's 44th 
Congressional District, which includes Riverside and Orange 
County. He is a former small businessman, and currently serves 
on the House Appropriations Committee. In 1996, he authored a 
bill that was included in the 1997 omnibus appropriation bill 
which created the Basic Pilot Program, which is now known as E-
Verify.
    I think you were the first, Ken.
    Next, we have Congressman Heath Shuler who represents North 
Carolina's 11th District. Congressman Shuler received his B.A. 
From the University of Tennessee in 2001 and is a former 
professional athlete and business owner. He is married and has 
two children, Navy and Island, and he remains an active member 
in the Fellowship of Christian Athletes.
    We are also pleased to welcome Congressman Sam Johnson, who 
represents the people of Texas's Third District. Mr. Johnson 
serves on the Committee of Ways and Means and is the Ranking 
Member on the Social Security Subcommittee. He returned home to 
Texas after serving in the U.S. Air Force for 29 years as a 
highly decorated fighter pilot. He flew combat missions in both 
the Korean and Vietnam wars, and was a prisoner of war in Hanoi 
for nearly 7 years. After his distinguished military career, 
Congressman Johnson started a home-building business from 
scratch, and served in the Texas legislature.
    And, finally, I would like to introduce Congresswoman 
Giffords, who represents Arizona's Eighth District, a diverse 
area that includes a 114-mile border with Mexico. She serves on 
the House Armed Services, the House Foreign Affairs Committee, 
is a third-generation Arizonan, and the youngest woman ever 
elected to the Arizona State Senate. Congresswoman Giffords 
represented her hometown of Tucson in the Arizona legislature 
from 2000 to 2005. During her service in both the Arizona House 
and Senate, she worked on legislation to expand health care 
coverage for Arizona families, and to protect Arizona's 
environment and open spaces.
    You are all welcome to submit your full statements for the 
record. You know that we ask that oral testimony consume about 
5 minutes. I know that Congressman Calvert has a competing 
obligation in the Transportation Committee, so we are going to 
ask Congressman Calvert to go first. And if you need to leave 
before we get to questions, we have all been there; we will 
understand.
    So let's begin with you, Congressman Calvert.

  TESTIMONY OF THE HONORABLE KEN CALVERT, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. Calvert. Thank you, Chairwoman Lofgren, Chairman 
Conyers, Ranking Member King, and Members of the Committee. 
Good morning. Thank you for inviting me here to testify today.
    Several years ago, I was happy to work with Chairwoman 
Lofgren to help improve our legal immigration system with a 
bill that allowed legal permanent resident applicants to name a 
new sponsor if their original sponsor died during the process 
of becoming a United States citizen, and I look forward to 
working with the Chairwoman on the two bills I have introduced 
regarding E-Verify.
    H.R. 19 would make the program mandatory. H.R. 5596 would 
provide a straightforward 10-year extension to the current 
program.
    When I first wrote the bill that created E-Verify, I 
intentionally created it on a limited basis for the very 
reasons we are here today: to ensure that it would not be 
abused or be a source of misinformation. It is vital that 
participating employers who volunteer to use this program and 
the new employees who are hired are not disenfranchised.
    From its humble beginnings in just five States, E-Verify is 
now available Nationwide, with approximately 70,000 employers 
participating. A recent Westat report shows that 94.2 percent 
of all checks to the system are automatically verified as 
authorized to work. The remaining 5.8 percent are employees 
that receive an initial mismatch and need to take further 
action to prove that they are authorized to work in the United 
States.
    For many people, this means their Social Security records 
are in need of an update. Perhaps they have a new marital 
status or have become naturalized citizens. For 90 percent of 
those individual cases, the process takes less than 2 days of 
the 8 business days allowed to work out either DHS or SSA to 
correct that discrepancy.
    It is important to point out that if an individual's 
personal information is out of date or incorrectly reported 
with SSA, this information must be rectified anyway to ensure 
that their Social Security credits are properly recorded.
    Just a few weeks ago, E-Verify introduced software changes 
that will automate the correction process which reduce the 
number of visits to the Social Security offices from five 
presently to two or three per thousand, a 50 percent 
improvement.
    Of the 5.8 percent of queries that do not receive instant 
verification, 0.55 percent resolve the mismatch, and the 
remaining 5.3 percent walk away from the process entirely. Why 
do they walk away? Because E-Verify is denying jobs to people 
here illegally.
    I would also like to point out that the protection is 
already in place to specifically protect workers from employers 
abusing this system. First, employers must check all new 
employees. It is against the law to use it as a screening tool. 
When an employee is notified there is a mismatch, they are 
provided with instructions on how to correct the information. 
That instruction sheet also provides a toll free number to the 
Office of Special Counsel for Immigration Related Employment 
Practices. E-Verify also has launched an information campaign 
aimed at informing and promoting employees of their rights 
within the program. Participating employers must also post a 
notice visible to prospective employees of their rights and a 
phone number to the Special Counsel.
    E-Verify has also an Office of Compliance, and a monitoring 
branch has begun monitoring employer usage of the program.
    After a recent hearing held by the Subcommittee on Social 
Security, I met with the people who run E-Verify to ask them 
about some of the questions raised at the hearing about the 
program and problems employers in Arizona have encountered.
    E-Verify has never notified an incorrect final 
nonconfirmation. This is good news for the both the employers 
and employees who are in increasing numbers being required to 
use the program. The State of Arizona and Mississippi require 
all employers to use E-Verify. And Friday, President Bush 
signed an executive order requiring all Federal contractors to 
use the program.
    E-Verify is not perfect. No system is. But it is a very 
good system that has safeguards to ensure that employers' and 
employees' rights are being protected in accordance with the 
law.
    I thank you for inviting me here today, and I apologize 
that I must leave, as I mentioned to you, Madam Chairman, for 
the Transportation and Infrastructure Committee. I appreciate 
your time. And if anybody would like to have questions later 
on, I would be more than happy to attempt to answer them.
    Thank you very much.
    [The prepared statement of Mr. Calvert follows:]

 Prepared Statement of the Honorable Ken Calvert, a Representative in 
                 Congress from the State of California



    Ms. Lofgren. Thank you very much, Congressman Calvert.
    And if we do have questions, we will forward to them in 
writing. We thank you very much. And good luck over in 
Transportation.
    Congressman Shuler, we would be pleased to hear from you 
now.

 TESTIMONY OF THE HONORABLE HEATH SHULER, A REPRESENTATIVE IN 
           CONGRESS FROM THE STATE OF NORTH CAROLINA

    Mr. Shuler. Thank you, Madam Chair.
    Chairman Conyers, thank you for being here.
    Madam Chair, thank you for hosting this Committee.
    Ranking Member King, thank you for all your hard work on 
many legislations dealing with immigration.
    Madam Chair, Members of the Subcommittee, last year I 
introduced H.R. 4088, the bipartisan SAVE Act, with 44 
Democrats and 46 Republicans. Today, 245 Members of Congress 
from 44 States have joined their constituents in calling for a 
debate and a vote on the SAVE Act.
    We are committed to stopping illegal immigration through 
improved border security, employment verification, and interior 
enforcement. We cannot continue to ignore our immigration 
crisis by passing it on to future Congresses and future 
Presidents.
    U.S. Customs and Border Protection estimates that over 12 
million people are currently here illegally, and as many as 
6,000 illegal aliens are crossing the borders every day. The 
vast majority of these individuals come to our country in good 
faith, to find work and better their family's life.
    The SAVE Act recognizes that America is a Nation of 
immigrants and a Nation of laws. Our country must have a 
welcome mat to those who are here legally. It must also 
consider the rules of entry, the cost of illegal immigrants 
placed on the local and State governments, and the effect of 
millions of unemployed Americans.
    While the SAVE Act has a strong emphasis on border security 
and interior enforcement, the real thrust of my legislation 
deals with employer verification. Dishonest employers who seek 
to exploit low-skilled immigrant labor and the Government's 
inability to secure its borders are the major reasons for the 
rapid increase in our illegal population. In most cases, the 
job offered acts as a magnet, drawing people over 20-foot walls 
and through inhumane desert conditions to find work.
    Two decades ago, our Government tried to stop illegal 
hiring through the form I-9 for all new employees hired after 
1986. While employment verification is current law, form I-9 
compliance alone requires business owners to be document 
experts, as they determine that an ID is valid. This places 
serious liability on them if they make a mistake. To deal with 
these concerns, Congress created the Basic Pilot Program in 
1996. That is now known as E-Verify.
    The SAVE Act would expand the pilot program nationwide over 
a 4-year period, affecting 40,000 larger businesses in the 
first year and slowly including smaller businesses in the final 
3 years. E-Verify is free, easy to use, and it allows 
participating employers to successfully match 93 percent of new 
hires to DHS and SSA databases in less than 5 seconds.
    For every 1,000 workers running through the system, 942 
workers are instantly verified by the system; 53 workers don't 
bother to contest the mismatch, likely because they are here 
illegally; only 5 workers successfully contested this mismatch. 
Therefore, E-Verify's error rate is less than one half of 1 
percent. DHS is unaware of one case since 1996 where a U.S. 
Citizen was denied employment because of an error in the E-
Verify system.
    According to the Department of Labor, there were 7.8 
million new hires in the U.S. during the first 2 months of 
2008. In that same period of time, over 1 million new hires 
were checked through E-Verify. On that basis, E-Verify is 
handling at least one in eight new hires already. Based on a 
recent load testing, the system has the capability of handling 
240 million inquiries per year. That is four times the number 
of people in the U.S. who are usually hired in a given year.
    E-Verify outlines a fair and proper method of using the 
system in multiple languages to protect employees from 
discrimination of hiring practices. E-Verify gives employers 
the tools that they need to follow the Nation's immigrationlaws 
and to avoid the penalties that result in hiring illegal 
aliens.
    Madam Chairman, I have the utmost confidence in this 
program, as does the Secretary of Homeland Security, who just 
yesterday stated that E-Verify should be used by all Government 
contractors based on the present executive order. The Secretary 
has also testified that E-Verify is ready for national rollout. 
And, additionally, the Democratic Governor of Arizona who 
recently signed E-Verify into law says her State has not 
experienced major problems with E-Verify.
    Every congressional staffer and employee of a Federal 
agency has passed through the E-Verify system over the past 
decade. E-Verify is required by law in various degrees in 
Arizona, Colorado, Georgia, Idaho, Minnesota, Utah, 
Mississippi, Oklahoma, and my home State of North Carolina.
    Prior to each State making this effort, several interest 
groups warned of the impacts or disaster that E-Verify would 
have if it became law. Yet, the spokeswoman from the Arizona 
Chamber of Commerce, a group who opposed the E-Verify in its 
State legislation last year, said: Fewer problems have been 
reported than originally feared; companies have not left the 
State in reaction to E-Verify; and employers have not reported 
major problems with the database.
    Madam Chair, thank you for the opportunity to speak on E-
Verify and the SAVE Act today. It is a pleasure just to testify 
today with my friend Ken Calvert, Gabbie Giffords, and a true 
American hero, Sam Johnson.
    Mr. Calvert and I agree that mandatory employment 
verification is a solution to this problem.
    I am happy to answer any questions you may have on the SAVE 
Act today.
    [The prepared statement of Mr. Shuler follows:]

 Prepared Statement of the Honorable Heath Shuler, a Representative in 
               Congress from the State of North Carolina





    Ms. Lofgren. Thank you very much, Congressman Shuler.
    Now we will turn to Congressman Johnson.

  TESTIMONY OF THE HONORABLE SAM JOHNSON, A REPRESENTATIVE IN 
                CONGRESS FROM THE STATE OF TEXAS

    Mr. Johnson. Thank you, ma'am.
    I appreciate Chairman Lofgren and the Chairman, Mr. 
Conyers, and Ranking Member King, Members of the Subcommittee. 
I appreciate you holding this hearing.
    You know, protecting the privacy of American citizens is 
vitally important to me and America. As the Ranking Member of 
the Social Security Subcommittee, we've spent years studying 
that issue. There are certain guiding principles we must 
respect in order to craft a truly effective, secure, reliable, 
Electronic Employment Verification System.
    These are: one, prohibit unlawful employment; two, protect 
workers; three, partner with employers; four, reduce the risk 
of identity theft; and, finally, protect Social Security.
    I have a bipartisan bill, H.R. 5515, the New Employment 
Verification Act, or NEVA, with Congresswoman Giffords. First, 
NEVA prohibits unlawful employment by eliminating the paper-
based and error-prone I-9 process. The employee's name, Social 
Security number, and date of birth instantly would be checked 
against the Social Security database.
    Second, NEVA protects workers. In my bill, Social Security 
verifies American citizens, and DHS verifies legal immigrants. 
The Social Security Administration, not DHS, has the 
responsibility to track the earnings history of every worker to 
ensure they receive the correct amount of disability or 
retirement benefits. Americans trust the Social Security 
Administration, and they believe the agency does a good job. I 
do, too.
    An agency responsible for tracking terrorists and securing 
our border should not be keeping tabs on when and where 
Americans work. Yet, according to their own privacy documents 
from February 2008, the Department of Homeland Security is 
building databases and maintaining data on the work history of 
American citizens and American employers.
    Over 2 weeks ago, Social Security Subcommittee Chairman 
Mike McNulty and I sent a letter to Secretary Chertoff asking 
about privacy protections provided by Homeland Security in its 
E-Verify system.
    I ask that a copy of this be inserted in the record.
    Ms. Lofgren. Without objection, it will be entered.
    [The information referred to follows:]

    
    
    
    
    
    
    Mr. Johnson. Thank you.
    This letter resulted from an incident that occurred during 
a May Subcommittee hearing where the Customs and Immigration 
Service provided information to Representative Shuler, who then 
shared with each Member of our Subcommittee through our staff, 
a copy of employers in our congressional districts that are 
registered to participate in E-Verify. The questions we posed 
to Secretary Chertoff are important and must be answered before 
E-Verify is extended. We have got a privacy problem here, and 
we ought to do something about it, in my view.
    Third, NEVA makes employers part of the solution. The 
critical difference between E-Verify and NEVA is that employers 
would transmit their newly hired employee's information through 
a system 90 percent of them already use to help States track 
down deadbeat dads. Only 1 percent of employers today use E-
Verify.
    NEVA also provides liability protection to employers who 
unknowingly hire illegal workers through a subcontractor and 
provides an exemption for penalties for initial good-faith 
violation.
    Fourth, NEVA will reduce identity theft. As the highly 
publicized raids in the meat-packing industry have illustrated, 
we know a simple check of names, Social Security number, and 
date of birth will still be subject to document fraud and 
identity theft. To address this problem, NEVA allows employers 
to voluntarily take the additional step of using Government-
certified private-sector experts to authenticate the identity 
of a new employee and harden the identity with a biometric.
    Finally, NEVA would protect Social Security by requiring 
the Congress to provide the Social Security Administration with 
advanced funding to get the job done.
    Social Security is integral to employment verification, and 
I will be working to ensure it is not relegated to the status 
of an afterthought. After years of inaction by the Congress, 
the American people are fed up with broken laws and broken 
promises, and I think it is time for a new direction.
    Thank you. I look forward to your questions.
    [The prepared statement of Mr. Johnson follows:]

 Prepared Statement of the Honorable Sam Johnson, a Representative in 
                    Congress from the State of Texas

    Chairman Lofgren, Ranking Member King, and Members of the 
Subcommittee, thank you for holding this hearing on the crucial 
employee verification component of the immigration reform debate. 
Protecting the privacy of American citizens is a great concern to me.
    Over the last several years, the Committee on Ways and Means and 
the Ways and Means Subcommittee on Social Security, on which I serve as 
Ranking Member, have held a number of hearings on employment 
verification and its impact on citizens and workers. After years of 
studying this issue, I believe there are certain guiding principles 
that we must respect in order to craft a truly effective, secure, 
reliable, electronic employment verification system. These are: 1) 
prohibit unlawful employment, 2) protect workers, 3) partner with 
employers, 4) reduce the risk of identity theft, and 5) protect Social 
Security.
    This past February I, along with several of my Republican Social 
Security Subcommittee colleagues, introduced H.R. 5515, the New 
Employee Verification Act, or NEVA which now has bipartisan support, 
including my distinguished colleague Congresswoman Giffords from 
Arizona. NEVA represents an innovative and comprehensive approach to 
worksite enforcement and I would like to take a few minutes to explain 
how NEVA represents those key principles.
    First, NEVA prohibits unlawful employment by eliminating the paper-
based and error-prone I-9 process with an electronic verification 
system that builds upon the lessons learned from E-Verify. The 
employee's name, Social Security number and date of birth would be 
instantaneously checked against the Social Security database in much 
the same way that E-Verify does currently. The critical difference is 
the entry of data using a platform already used by employers which I 
will discuss shortly.
    Second, NEVA protects workers by ensuring that no U.S. citizen 
seeks permission to work from a federal law enforcement agency. The 
Social Security Administration (SSA) has always had the responsibility 
to track the earnings history of every worker to ensure they receive 
the correct amount of disability or retirement benefits. Americans 
trust the Social Security Administration and they believe the agency 
does a good job--I do too. I believe that these earnings should be 
accurate and a mandatory electronic employee verification system would 
help increase accuracy sooner and maintain accuracy through workers' 
lifetimes.
    An agency responsible for tracking terrorists and securing our 
borders should not be keeping tabs on when and where U.S. citizens 
work. Yet the Department of Homeland Security (DHS) is building 
databases and maintaining data \1\ on the work history of American 
citizens and American employers.
---------------------------------------------------------------------------
    \1\ U.S. Department of Homeland Security, ``Privacy Impact 
Assessment for the Verification Information System Supporting 
Verification Programs.'' February 22, 2008. Pages 2, 3.
---------------------------------------------------------------------------
    Over two weeks ago, Social Security Subcommittee Chairman Mike 
McNulty and I sent a letter to Secretary Chertoff asking about privacy 
protections provided by Homeland Security in its E-Verify system. I ask 
that a copy of that letter be inserted in the record. This letter 
resulted from an incident that occurred during a May Subcommittee 
hearing where the Customs and Immigration Service provided to 
Representative Heath Shuler (D-NC), who then shared with each member of 
our Subcommittee, the employers in our Congressional Districts that are 
registered to participate in E-Verify. The questions we posed to 
Secretary Chertoff are important and must be answered before this E-
Verify program is extended when it expires in November.
    NEVA puts the Social Security Administration in charge of employee 
verification because it is their fundamental job to track earnings and 
because the vast majority of those who work in this country are 
American citizens who should not be tracked by DHS. Under NEVA, Social 
Security verifies U.S. citizens and the DHS verifies non-citizens. 
Also, DHS maintains its essential role in worksite enforcement, 
bolstered by increased penalties for those employers who do not comply.
    To further protect workers, NEVA also provides extensive 
administration and judicial reviews so workers can challenge any 
decision they believe is in error, creates penalties for unauthorized 
use of information, and establishes an advisory panel of public and 
private experts to ensure the highest degree of efficiency, accuracy, 
and privacy.
    Third, NEVA makes employers part of the solution. NEVA partners 
with employers and creates an easy-to-use system. Employers would 
transmit their newly hired employee's information through a system 90 
percent of employers already use to help states track down dead beat 
dads, each State's new hire reporting system. The information would be 
routed to the SSA and would provide nearly instantaneous work 
authorization. NEVA also provides liability protection to employers who 
unknowingly hire illegal workers through a subcontractor and provides 
an exemption from penalties for an initial good faith violation.
    Fourth, NEVA will reduce identity theft. As the highly publicized 
raids in the meat packing industry have illustrated, we know that a 
simple check of name, number of date of birth would still be subject to 
document fraud and identity theft.
    NEVA allows employers to voluntarily take the additional step of 
using government certified private sector experts to authenticate the 
identity of the new employee and to then harden the identity to a 
biometric, such as a finger print. After the employer verifies that the 
same person who went through the screening is the same person who shows 
up to work, the employee may then ask that their personal information 
be erased.
    Finally, NEVA would protect Social Security by requiring that 
employers use the system for newly hired employees only. From what we 
know about the illegal immigrant population, where they work, and the 
annual rate of new hires in key industries, this will minimize the 
additional burden placed upon an already strained agency, while 
preventing unlawful employment. Also, NEVA would require the Congress 
to provide the SSA with the financial resources needed before the 
agency can perform employment verification.
    Proponents of a mandatory E-Verify system rarely acknowledge the 
need to properly fund this expanded mission of the Social Security 
Administration. In fact, the DHS has not even paid the SSA for their 
cost of E-Verify for two recent years of their efforts for that pilot 
program. The SSA is integral to employment verification and I will be 
working to ensure that it is not relegated to the status of an 
afterthought.
    Today, thousands of immigrants enter the country seeking the life a 
job in the country has to offer, but too many do so by breaking the 
law. And we cannot enforce the law with the broken enforcement system 
we currently have. After years of inaction by the Congress, the 
American people are fed up with broken laws and broken promises. It is 
time for a new direction.
    I am confident, after looking at this issue a great deal during my 
time in Congress, I and my bipartisan cosponsors, have created a 
workable solution to a critical component of immigration reform. The 
large and diverse group of employers who agree with us include: the 
National Association of Manufacturers; the Society for Human Resource 
Management; the National Association of Home Builders; and the National 
Federation of Independent Business.
    Thank you and I look forward to answering any questions you may 
have.

    Ms. Lofgren. Thank you very much, Congressman Johnson, for 
your testimony and your leadership.
    Now we will turn to our final panelist, Congresswoman 
Giffords.
    It is a pleasure to have you here.

TESTIMONY OF THE HONORABLE GABRIELLE GIFFORDS, A REPRESENTATIVE 
             IN CONGRESS FROM THE STATE OF ARIZONA

    Ms. Giffords. Good morning, Chairwoman Lofgren.
    Good morning, Ranking Member King, and Chairman Conyers. It 
is an honor to be here testifying before your Committee today.
    I believe the reason why I was selected is that I come from 
Tucson, Arizona, the Eighth Congressional District, where we 
have about a 114-mile part of the 2,000 U.S.-Mexico border.
    To give you some context about how difficult illegal 
immigration is in my district, last year, the Tucson Sector of 
the Border Patrol apprehended 387,000 illegal immigrants in 
just 1 year. So, clearly, when you look at approximately 1,000 
immigrants a day, we are shouldering the burden of this illegal 
immigration crisis.
    And in addition to knowing a lot about border security, my 
constituents have a broad understanding of the immigration 
crisis as a whole. They know, and I agree, that an enforcement-
only approach to immigration will not fix our problem. This 
Congress has to improve our visa programs; upgrade and expand 
the Federal Government's capacity to verify documents; give 
employers the tools they need to check the citizenship of 
employees; and take a thoughtful look at our economy and the 
real workforce need that our businesses have.
    As you know, the Arizona legislature in January chose to 
take action in response to the Federal Government's inaction to 
fix our system, and we became the first State to mandate that 
all Arizonans use the E-Verify system.
    As the first State, I believe that the Arizona experience 
is of great interest here in Washington. I believe that the 
Arizona experience should inform the ongoing debate about 
employment verification and whether the current E-Verify 
program administered through DHS should be extended and/or 
mandated Nationwide.
    Some of the businesses that have signed up have reported a 
variety of challenges and problems using E-Verify. They are 
finding it complicated, unreliable, and burdensome. They are 
having great difficulty getting answers from DHS to their 
problems about the system.
    I have heard from employers, employees, and privacy rights 
advocates who are very vocal that nationally mandating E-Verify 
as it is would be potentially disastrous for our Nation. They 
are all experiencing the downfalls of using an inaccurate 
database with inadequate privacy protections.
    Between October of 2006 and March 2007, roughly 3,000 
foreign-born U.S. citizens were initially flagged as not work-
authorized. These errors have specifically impacted Arizona 
workers who have their ability to work wrongfully impacted. The 
experience of Arizona employers and employees makes it clear 
that we can do better and that action is needed.
    And Madam Chairman, I would like to enter into the record a 
document of the Immigration Policy Center about E-Verify for 
Arizona, because I think it would be important for Members to 
look at.
    Ms. Lofgren. Without objection, that will be made a part of 
the record.
    [The information referred to follows:]

    
    
    
    
    
    
    Ms. Giffords. Thank you.
    Having reflected on what is happening in my State of 
Arizona and the challenges that we have seen, I think that we 
need a system that incorporates three primary elements: one, 
explicit preemption of State laws such as the one in Arizona so 
that the business community has an even playing field across 
the country; two, real privacy protections for U.S. citizens 
and for legal workers; and, three, liability protections for 
employers who play by the rules.
    That is the reason why I have joined with Ranking Member 
Johnson with H.R. 5515, the New Employee Verification Act, or 
NEVA, because it provides a simplified, effective, and balanced 
alternative to the E-Verify system. NEVA is carefully crafted 
to ensure a legal workforce, safeguard workers' identities, and 
protect Social Security.
    It is also realistic, Madam Chair.
    Under NEVA, U.S. Citizens would be verified through the 
Social Security database and not funneled through DHS, as 
currently occurs under E-Verify. Only noncitizens would be 
verified through DHS.
    This bill protects the Social Security Administration's 
privacy mission and trust funds by authorizing employment 
verification only through funds appropriated in advance. And as 
we testified before in the Social Security Subcommittee, that 
is critical. By making Social Security the agency with primary 
responsibility, it acknowledges that the Social Security 
database is crucial to a functioning system. We do not take the 
risk that funds intended for Social Security get bottlenecked 
in another agency.
    NEVA fights identity theft by allowing the use of private-
sector contractors certified by the Federal Government to 
authenticate the identity of employees. And this is a defining 
characteristic of the legislation that makes it functional and 
unique when compared to other employment verification 
legislation.
    NEVA has been widely well received in Arizona. The Chamber 
and CEO/president of the Tucson Metropolitan Chamber, the 
Sierra Vista Area Chamber of Commerce, the Marana Chamber of 
Commerce, all the business chambers that actually have to deal 
currently with the E-verify system are turning to NEVA as a 
very good alternative.
    As this Subcommittee considers the current employee 
verification proposals, please take the Arizona experience to 
heart. Southern Arizonans, just like all Americans, expect 
their elected officials to find solid sensible solutions to the 
greatest challenges of our day, and we know that is our broken 
immigration system. The fact that this system has become 
polarized, radioactive, divisive, and ugly is evidence that our 
Congress has to act responsibility.
    Only by developing a realistic long-term solution for 
undocumented populations living in our United States with a 
targeted, effective enforcement of the realistic laws will we 
restore legality and legitimacy to our immigration system.
    Madam Chair, just in closing, if Congress does nothing or 
simply extends the E-Verify system without much needed reform, 
such as State preemption or employee protections, we will have 
failed.
    Thank you for this opportunity, allowing me to testify 
before all of you today.
    [The prepared statement of Ms. Giffords follows:]
       Prepared Statement of the Honorable Gabrielle Giffords, a 
          Representative in Congress from the State of Arizona
    Chairwoman Lofgren, Ranking Member King, and members of this 
Subcommittee, thank you for allowing me to testify today. It is an 
honor to be given this opportunity to talk an issue of deep concern to 
Southern Arizona--employee verification.
    I am from Tucson, a community that is directly impacted by the 
effects of illegal immigration. My district includes about a 114 mile 
section of the 2,000 mile U.S.-Mexico border. It includes the ``Tucson 
Sector,'' which is the most heavily trafficked sector of the border in 
the country. To give you some context, last year, 387 thousand illegal 
immigrants were apprehended in Arizona. That's approximately 1,000 
illegal immigrants every single day.
    In addition to knowing a lot about border security, my constituents 
have a broad understanding of the immigration crisis as a whole. They 
know, and I agree, that an enforcement-only approach will not fix the 
problem. We must improve our visa programs, upgrade and expand the 
federal government's capacity to verify documents, give employers the 
tools they need to check the citizenship of employees, and take a 
thoughtful look at our economy and workforce needs.
    As you know, the Arizona legislature has chosen to take action in 
response to the federal government's failure to fix the system. As the 
members of this Committee know, Arizona was the first state to mandate 
that all Arizonan employers use of E-Verify.
    As the first state, our experience in Arizona is of great interest 
here in Washington, D.C. I believe the Arizona experience should inform 
the on-going debate about employment verification and whether the 
current E-Verify program administered through the Department of 
Homeland Security should be extended and/or mandated nationwide.
    Some of the businesses that have signed up have reported a variety 
of challenges with using E-Verify. They are finding it complicated, 
unreliable, and burdensome. They are also having difficulty getting 
answers from DHS to their questions about the system.
    I have heard from employers, employees and civil rights advocates 
who are very vocal that nationally mandating E-Verify AS-IS for ALL 
employees would be disastrous.
    They are all experiencing the downfalls of using an inaccurate 
database with inadequate privacy protections. Between October 2006 and 
March 2007, roughly 3,000 foreign-born U.S. citizens were initially 
flagged as not-work-authorized. These errors have specifically impacted 
Arizona workers who have had their ability to work wrongly impacted.
    The experience of Arizona employers and employees makes it clear 
that we can do better and that action is needed.
    Having reflected on what is happening in Arizona and the challenges 
we have seen, I think we need a system that includes these three key 
elements:

        1.  Explicitly pre-emption of state laws such as the one in 
        Arizona;

        2.  Privacy protections for U.S. citizens and legal workers;

        3.  Liability protections for employers who play by the rules; 
        and

    That is why I am a cosponsor of legislation introduced by Ranking 
Member Sam Johnson. H.R. 5515, the New Employee Verification Act, or 
NEVA provides a simplified, effective and balanced alternative to E-
Verify.
    NEVA is carefully crafted to ensure a legal workforce, safeguard 
workers' identities, and protect social security. It is also realistic.
    Under NEVA, U.S. citizens would be verified through the Social 
Security database and not funneled through DHS as currently occurs 
under E-Verify. Only non-citizens would be verified through DHS.
    This bill protects the Social Security Administration's primary 
mission and trust funds by authorizing employment verification only 
through funds appropriated in advance. By making SSA the agency with 
primary responsibility, it acknowledges that the social security 
database is crucial to a functioning system. We do not take the risk 
that funds intended for SSA get bottle-necked in another agency.
    NEVA also fights identity theft by allowing the use of private 
sector contractors, certified by the federal government, to 
authenticate the identity of employees. This is a defining 
characteristic of this legislation that makes it functional and unique 
compared to other employment verification legislation.
    NEVA has been received well-received in Arizona, largely because it 
takes a responsible approach. For example, the following local business 
organizations and CEO's have endorsed NEVA: the Tucson Metropolitan 
Chamber of Commerce, the Greater Sierra Vista Area Chamber of Commerce, 
the Marana Chamber of Commerce, Stanley P. Abrams, President of The 
Stanley Group, Mark Clark, President & CEO of CODAC Behavioral Health 
Services, Inc., and Dr. Peter Likins, Chair of the Southern Arizona 
Town Hall, and Retired President of the University of Arizona.
    As this Subcommittee considers the current employee verification 
proposals, please take the Arizona experience and lessons to heart.
    Southern Arizonans, like most Americans, expect their elected 
officials to tackle not just the easy issues--but the tough ones. The 
fact that immigration has become polarized, radioactive, divisive, and 
ugly is evidence, in fact, that Congress must responsibly confront it.
    Our broken immigration system is simply not an insurmountable 
problem. However, if Congress does nothing or simply extends E-Verify 
without much-needed reform, we will have failed.
    Only through a realistic, long-term solution for the undocumented 
population living in the U.S., and targeted, effective enforcement of 
realistic laws will we restore legality and legitimacy to our 
immigration system.
    Thank you for the opportunity to testify today and for considering 
NEVA as an important alternative to the current and burdensome employee 
verification system.

    Ms. Lofgren. Thank you very much, Congresswoman Giffords.
    And thanks to all of you for your testimony.
    At this time, we will move to questions, if there are any, 
for the Members.
    I would turn first to Chairman Conyers for his questions.
    Chairman Conyers. Thank you, Madam Chairman.
    Well, Mr. Shuler, when the gentle lady takes a shot at your 
bill, I ought to let you say something in your own defense 
before the firing squad opens up on you. What would your last 
words be? We'll remember them in your memoriam.
    Mr. Shuler. Absolutely.
    It is a proven system that has been in place for quite some 
time. And to put a new system into place that hasn't been 
vetted and gone through the process--and as we have all stated, 
over the last 14, 16 years, the system has continued to upgrade 
its system. And saying that, why recreate, why spend millions 
and millions of dollars to create something that is already 
working effectively? And if you look at some of the people who 
have problems with it, it's the people who have been exploiting 
illegal immigrants for quite some time.
    Chairman Conyers. And we are not going to let him get away 
with the notion that they have got an effective Social Security 
system. They have got a 4 percent error rate that translates 
into 17 million errors. What about that?
    Mr. Shuler. Every week in my office I have people who 
become eligible for Social Security, and we have the problems. 
And so fixing it earlier in life is the solution. And we have 
to make sure that we do have the funding in Social Security in 
order to fix some of those problems. And using E-Verify will 
help fix some of those problems before they come of age for 
Social Security.
    Chairman Conyers. Have you ever tried to call a Social 
Security office in your life?
    Mr. Shuler. Yes, we have a back line now that we can 
actually get through that is working pretty well.
    Chairman Conyers. You do?
    Mr. Shuler. I'll let you know what that is, yeah.
    Chairman Conyers. Please. I will see you immediately after 
the hearing. Lawyers can't even get through, much less poor 
citizen constituents.
    Mr. Shuler. The error rate on E-Verify is actually 0.5 
percent.
    Chairman Conyers. Well, Sam Johnson, we've been waiting to 
get you before this Committee for many years. What do you have 
to say?
    Mr. Johnson. Well, I think the error rate is misstated.
    But you know, the thing is, Social Security errors are 
caused by, in most cases, ladies getting married and forgetting 
to change their names. And, really, it is important that they 
fix that in the Social Security system for retirement purposes, 
and notwithstanding immigration. But I think that can happen 
regardless of what kind of system you have in place as soon as 
the people become aware of it.
    Addressing the Social Security office problem, you know, 
the problem exists in a lot of veins, not just immigration. We 
are working that problem and trying to get more law judges in 
place so we can address that part of the problem, and it seems 
to be working. And you know, I spoke with you earlier about a 
hearing on those administrative law judges so we could get to 
the bottom of it maybe a little quicker. It is a real problem, 
and that is stuffing up the Social Security offices.
    I'll bet we could get you a private number, too.
    Ms. Lofgren. I think all Members want one.
    Chairman Conyers. How can we protect Americans from--what 
happens when there is a wrongful denial of work authorization? 
You know, it averages out to 24,000 workers in my, in every 
district being denied because of false negatives.
    And then we come to our friendly Department of Justice, the 
Civil Rights Division. They have got maybe 24 lawyers trying to 
check a workforce of 163 million people. Why doesn't your 
Judiciary Committee get on the ball and get a lot more lawyers 
here to handle this? They can't police that kind of 
discrimination.
    And, finally, this is it for me. What about those 
exploitative employers that are going to misuse this system, 
submitting the names of union organizers, for example, or 
people who look foreign, whatever that might mean, which would 
be a tempting way to mess up what would otherwise be a good 
system?
    Mr. Johnson. Well, there is an appeals process in Social 
Security that works far better than the one that you are 
talking about in Justice. And I feel like that we need to 
address the Social Security part of the equation so that it is 
safe and secure for eternity.
    You know, we do have a problem with that fund. And, right 
now, the agreement with Homeland Security was to pay Social 
Security for the first 2 years, and they haven't yet done that. 
I think funding is terribly important, and it needs to be 
focused on getting Social Security funds so they can make it 
work right.
    Ms. Giffords. Mr. Chairman, the database issues have the 
greatest problem with naturalized U.S. citizens, and there is a 
problem of about 10 percent that is being reported; people that 
are being told that they are not authorized to work, but they 
are legally authorized to work. According to the Census Bureau, 
in Arizona, there is about 274,000 naturalized citizens in my 
State, which of course means that's about 27,000 U.S. citizens 
that are initially flagged just, again, in the home State of 
Arizona that are not allowed to work.
    What we are seeing in Arizona is that this law, although it 
is framed as a purely employment-driven verification system, is 
now carrying into all virtually other aspects of life. Our 
media outlets are reporting increased racial profiling, 
discrimination against lawfully present immigrants. So this E-
Verify system has taken on a life of its own, and that is why I 
have joined with Congressman Johnson for an alternative that 
goes with a database that we currently have that currently 
works, that would not subject U.S. citizens to the Department 
of Homeland Security. It would be faster. It would be more 
reliable, and it would be financially accountable as well.
    Mr. Johnson. And the I-9 system which we now use would be 
junked. And you know, people forget to check boxes, so they are 
stalled out at the start.
    Ms. Giffords. And one other thing, too, Mr. Chairman.
    The E-Verify system requires everyone apply through the 
Internet. Well, in my district, rural Arizona, there are a lot 
of people that don't have Internet access, that don't have the 
ability to do that, so I really believe----
    Ms. Lofgren. We hope to change that.
    Ms. Giffords. Yes, and we are getting there. But currently, 
I mean, this is the reality of the employment climate in our 
State.
    Ms. Lofgren. Mr. Conyers' time has expired, but I see Mr. 
Shuler wants to add something, and then we'll turn to the 
Ranking Member.
    Mr. Shuler. I just want to add that the error rate in the 
database is much different than the error rate on E-Verify. It 
is 0.5 percent on E-Verify, not 5 percent or 4 percent or some 
other number. It is 0.5 percent.
    Ms. Lofgren. We turn now to the Ranking Member, Mr. King, 
for his questions.
    Mr. King. Thank you, Madam Chairman.
    And I do want to thank the witnesses here.
    First, I would just go down through a list of things that 
came across my mind. The question of new hires versus current 
employees, and I do believe that it is inappropriate to ask an 
employer to comply with a law and discourage the hiring of 
illegals if you don't allow them to use E-Verify on current 
employees.
    The only question back then was, did we have the ability 
with the database to process that many job applicants or that 
many workers? I think today it is clear that database will 
handle, as the testimony from Mr. Shuler said, 240,000 within 
that period of time, multiple times our workforce. So that I 
think is answered here today in the testimony, and I want to 
point that out.
    The second thing, the question the Chairman of the full 
Committee asked at the beginning, would it cost $17 billion in 
lost tax revenue? I would submit that there are $60 billion in 
wages that are transferred into places outside the United 
States from workers in the United States, and that $60 billion 
that goes out of the country, a significant portion of it and 
no one really knows how much, is wages from illegal workers. So 
if it is only half, then we've got $30 billion to work with 
there. If they are right on the $17 billion, we are going to 
have a net savings regardless that will hold this money in the 
United States, and it will go to legal workers. So I want to 
make that point.
    Another point is that we have seem to have two choices 
here. One of them is to use E-Verify to verify new hires; and 
the other one is to make it mandatory under Mr. Johnson's bill 
to use new hires. I'd submit we ought to let it be voluntary, 
and then let the IRS decide whether you get to deduct your 
wages and benefits or not if you are hiring illegals and give a 
safe harbor for the utilization of E-Verify. That is other the 
alternative. Let it be voluntary, and then let the incentive be 
in place when the IRS steps in.
    That's a number of things that come across my mind, but it 
seems to me, as I listen to this testimony, that a lot of us 
are talking about the same thing. And I am looking at a pie 
chart here that shows 84 percent of E-Verify goes off to the 
Social Security database and another 9 percent goes to USCIS's 
database and DHS within that.
    I would just ask the question of Representative Giffords, 
what is the distinction between an E-Verify query of Social 
Security Administration and, under the NEVA bill, a query that 
would go to the same database? Why do we care? If we are 
cleaning up the Social Security database by using E-Verify, as 
Mr. Shuler testified, why wouldn't that be a good way to get 
that done early?
    Ms. Giffords. Ranking Member King, we have the bill's 
sponsor here to answer any more detailed questions. But, there 
is a fundamental difference for U.S. citizens being driven 
through a security-type database, Department of Homeland 
Security.
    Our system, the new Employee Verification Act, would 
require U.S. citizens to go through the current existing 
database that 95 percent of all employers use, which are the 
States' deadbeat dad database. The system is already in effect. 
It works. I think it is preferable to use that database for 
U.S. citizens rather than requiring all U.S. Citizens to go 
through the Department of Homeland Security.
    Mr. King. Yeah, but I understand we are going through the 
Social Security database regardless of whether it is E-Verify 
or whether it is under NEVA.
    Is that correct, Mr. Johnson?
    Mr. Johnson. Right.
    Mr. King. And I thank you for that.
    And I will make another quick point. And that is that, 
Social Security, I have had some frustration with them. There 
is no match. Letters don't seem to come for people who are 
sending off, hiring people that have Social Security numbers 
that aren't valid. When they do, they seem to be in the most 
egregious cases. We have at least 11,000 people in America that 
are working for Government using no-match Social Security 
numbers.
    I want to get the Department of Homeland Security working 
together with the IRS, working together with the Social 
Security Administration. Can we get our agencies to work 
together, to team up like a company would instead of the right 
hand doesn't know what the left hand is doing, Mr. Johnson.
    Mr. Johnson. I would hope so, yes.
    Could I ask to be excused for another meeting that I 
really----
    Ms. Lofgren. Of course, Mr. Johnson.
    Mr. King. It might just be the note that my time has 
expired, Madam Chairman.
    And I especially thank all the witnesses here today, and my 
good friends on the panel----
    Mr. Johnson. I have an able representative right here.
    Ms. Lofgren. We understand, and we appreciate the time you 
were able to spend with us this morning.
    The gentleman's time has expired.
    Mr. King. Thank you, Madam Chair, I yield back----
    Ms. Lofgren. We will turn now to----
    Ms. Giffords. Madam Chair, can I clarify something for the 
record?
    Ms. Lofgren. Yes.
    Ms. Giffords. The NEVA legislation would have U.S. Citizens 
go through the Social Security database first. Now, if they are 
flagged, at that point, they would kick to DHS. It wouldn't be 
that everyone would start with the DHS database.
    Ms. Lofgren. Thank you for that clarification.
    We will turn now to our colleague Luis Gutierrez for his 
questions.
    Mr. Gutierrez. Thank you very much.
    Well, let me say, so we are going to use the Social 
Security database. And the Social Security database, as 
referenced by Chairman Conyers, has a 4.1 percent error rate. 
Now, DHS--and only DHS says this about themselves, that they 
have virtually none.
    So if I understand this right--and since our bill is very 
similar, the STRIVE Act is very similar, in that we want verify 
people through Social Security, one says they don't have any 
error rate. I don't know of a governmental institution that 
doesn't have an error rate. But we are soon to hear from 
Homeland Security that they virtually have no error rate in all 
of their files.
    Now, it takes them forever to verify a name to help someone 
become a permanent resident or citizen, including years to 
verify a simple name check with the FBI, but they have no error 
rate, and they can quickly tell us who all these employees are.
    I am just amazed to hear somebody that we know who is 
lawfully in the United States, paying and petitioning the 
Government, cannot get their name checked for years, and yet 
they can get an employment check as quickly as 5 seconds. I 
just find that a little incongruent, one thing with the other.
    But having said that, let's just suppose it's a 1 percent 
error rate--and a 4 percent. I just did some numbers here. I 
didn't have a calculator, so I could be a little wrong. If 
there are 63 million queries a year, and 4 percent of that, 
right--and currently we have 66,000 under the E-Verify. That is 
how many employers. And we are going to go to 7 million 
employers. So we are going to jump from one thing to the other 
in 4 years. Then they want us to look at this and to say that 
each of us, if I did this right--I missed a piece of paper 
here--so 4 million, 2.8, so that is 6.8 million people.
    If you took the total number, there are about 165 million 
employees in the United States, and at 4 percent, 4.1--and I am 
adding another percent for the people who don't make mistakes, 
only going to give them a 1 percent error rate--that means, as 
we go through the next 4 years, nearly 7 million people will 
have to visit, call, visit their Congressman to fix the 4 
percent error rate, which Social Security--we asked Social 
Security, what is your error rate? They said 4.1.
    I mean, think about that one moment. Wouldn't it be wiser 
to phase this in and take infrastructure 1 year and then verify 
it, come back, meet with Chairwoman Lofgren, and come back and 
have the Chairwoman have the information. Don't you think it 
would be better to phase it in?
    Mr. Shuler. And the SAVE Act actually does that. And let me 
repeat my opening statement. In the first 2 months of this 
year, 7.8 million people were newly hired at a new location, 
new job. One million of those went through E-Verify. And they 
went through a testing overload, and they were able to handle 
240 million queries per year.
    So it is a phased-in program over 4 years, the first year 
being Government employees, which all of our staffers, all of 
us on the Hill, all of our Government employees----
    Mr. Gutierrez. I understand that. But just so that we 
understand, I know you do it in 4 years, but shouldn't we have 
accuracy? Shouldn't we come back and make sure that--I am just 
trying to share with you. Couldn't we have accuracy?
    And that is, we roll it out to certain industries. We all 
know we are going to get to everybody, so we take on new hires, 
we bring them into the system. We come back and we verify that 
these industries and these employers have an accuracy level 
of--and then we roll it out to another piece of industry.
    I am with you, Shuler, on much of this. It is just that if 
you roll it out and you jam it, there is going to be a lot of 
people. It is now, in my office alone, after immigration, you 
know what we have got? Social Security. People are waiting 
years, American citizens are waiting years, for when they apply 
for Social Security benefits and disability benefits, for 
someone to make the adjustment, years. And now we are going to 
throw on the Social Security system 165 million people who are 
going to be queried over the next 4 years. That is a mammoth 
undertaking.
    And, secondly, let me just share, because we can work--if 
you look at the STRIVE Act, we talk about a biometric, readable 
Social Security card that is tamper-proof. So we are into 
making sure that our system is safe. It is just how we do it 
and how we roll it out and whether or not we shouldn't do it a 
la Sensenbrenner, which you do, which is enforcement only, or 
do we do it in a comprehensive manner. That is really the 
debate we are going to have.
    And I look forward to working with my friend, Mr. Shuler, 
and my good friend, Congresswoman Giffords.
    Ms. Lofgren. The gentleman's time has expired. I think 
Representative Giffords wants to say just a quick thing before 
we go to Mr. Gallegly.
    Ms. Giffords. Thank you, Madam Chair.
    I just wanted to let you know that our legislation, the 
NEVA bill, requires that Social Security and DHS certifies the 
accuracy of the system in advance of the full implementation. 
It also requires that the GAO evaluate the accuracy, the 
efficiency, and the impact of electronic verification before it 
is rolled out.
    So that is incorporated into our bill, because we are 
concerned as well. I mean, we don't talk a lot about it, but in 
Arizona we don't have even the fuller number of employers that 
are on the system yet. So rolling this out on a large scale 
could be devastating
    Ms. Lofgren. Thank you.
    We turn now to Mr. Gallegly for his questions.
    Mr. Gallegly. Thank you, Madam Chairman.
    I would like to take a step back just for a second, if we 
can. I know we are here on E-Verify, but I think we need to 
take a step back and really look at the magnitude of what the 
problem really is.
    Currently, we have all been reading the statistics in the 
last few days about what the unemployment rate is in the United 
States. We are really concerned. It is up to 5.5 percent. That 
translates, according to my math, somewhere around plus or 
minus 8 million people that are unemployed in the United 
States. Are we pretty much in agreement on that?
    Ms. Giffords, are you aware of how many people are working 
in the United States today with an invalid Social Security 
number?
    Ms. Giffords. Mr. Gallegly, I am not. I am not sure, no.
    Mr. Gallegly. Well, I am not either, but I know that 3 
years ago it probably wasn't as bad then as it is today. That 
is a pretty safe guess, I think. Three years ago, it was 10.5 
million people.
    Now, if we figure, from a simple math situation, if there 
is a 5 percent error in the way Social Security deals with 
their numbers, if you take 5 percent off of the 10.5 million, 
we could say probably safely that there are 10 million people 
working in this country with an invalid Social Security number.
    And that is what we are dealing with here, is people--the 
purpose of E-Verify or your program is to see that the people 
that are working in this country have a legal right to be 
working in this country.
    So, I mean, with simple math, I would say with the people 
that are illegally working in this country, we have 2 million 
people working in this country above what it would take to wipe 
out all of the unemployment. Maybe that is not a perfect 
analogy, but it is a very serious issue when you have over 10 
million people working in a country that have no right to work 
here.
    I would like to hear your response to that.
    Ms. Giffords. Mr. Gallegly, you weren't here for my opening 
comments----
    Mr. Gallegly. I apologize for that.
    Ms. Giffords [continuing]. When I talked about southern 
Arizona being the most heavily impacted district. The Board 
Patrol Tucson sector apprehended 388,000 people last year.
    Mr. Gallegly. Wasn't enough.
    Ms. Giffords. My district is the most heavily trafficked 
area along the 2,000 miles. So we understand that in southern 
Arizona. We deal directly with the impacts, through crime, 
through violence, through homicides. We are the most heavily 
trafficked corridor in terms of marijuana. So we understand it 
in southern Arizona.
    But southern Arizona is also a microcosm for the country in 
terms our economy. My district has a very heavy agricultural 
component, over 9,000 square miles. Willcox, Benson, parts of 
that State have a real demand when it comes to finding people 
that are willing to go and work in the fields and pull in 
crops. Then we have a construction industry that is a little 
depressed right now, but Arizona is the second fastest growing 
in the State--booming construction industry. I used to run my 
family's tire and automotive company. I know how difficult it 
is to find a tire tech that wants to work for $7 or $8 in 115-
degree heat.
    So we have some real employment challenges of getting our 
folks to want to work. Kids these days don't have that desire 
to get out there, like we used to do, frankly.
    We have a microcosm of a lot of things going on----
    Mr. Gallegly. Reclaiming my time, I really respect and 
appreciate what the gentlelady is saying, but I might remind 
her that I have one of the largest agricultural districts in 
the United States. I have probably, on a dollar basis, 
certainly in the top four or five in the United States, as far 
as dollar volume. We rotate three crops a year in California, 
row crops. Strawberry capital of the world--Calavo, Sunkist. I 
can go on and on. So I am pretty familiar with how the 
agricultural business works.
    But I am also very familiar with how the rule of law should 
work, and that is what we are dealing with here. If we are 
going to talk about needs, unmet domestic needs for labor, that 
is a separate issue, and that should be addressed accordingly. 
If we have an unmet domestic need, that is what our immigration 
policies have been about since the beginning of time, certainly 
since the turn of the previous century. So let's not mix apples 
and oranges.
    Mr. Shuler, I appreciate all the hard work that you have 
put into this issue. It is my understanding that we have 
currently over 64,000 employers participating in E-Verify. Do 
you believe the system can handle the additional capacity now, 
the way we are set up?
    Mr. Shuler. Well, the Secretary obviously has come out to 
say that the system is prepared for a national rollout. We are 
seeing that from several States, Arizona being one, Mississippi 
actually implementing that. Legislation that just went into the 
State of North Carolina was just dropped. I think we are going 
to continue to see more and more States taking a front-line 
approach, and we have to make sure that the system is prepared.
    We are seeing that it is prepared, and we will hear 
testimony later in this hearing that talks about how prepared 
that they are. This has been a system that has been vetted well 
over a decade. And the error rate has certainly decreased. 
Being able to query the data quicker is obviously being 
invented. And the number of visits that will have to go to the 
Social Security Administration because of other databases that 
they are actually going to be pulling the information from is 
going to be less.
    So I feel very strong about it. I have spent a lot of time, 
as you and others have, of looking at how E-Verify has really, 
from its conception to now, how strong and accurate the system 
really is.
    Mr. Gallegly. Thank you for your leadership.
    I yield back.
    Ms. Lofgren. Thank you. The gentleman yields back.
    I recognize now the gentlelady from Texas, Ms. Jackson Lee, 
for 5 minutes.
    Ms. Jackson Lee. Thank you, Madam Chair.
    Let me say to the witnesses, first, I appreciate your 
presence here today. And knowing the mindset of at least the 
two remaining Members on the panel, I agree that we have to do 
something as it relates to immigration reform, and I know that 
enforcement is very important.
    I have spoken to the distinguished gentleman from North 
Carolina. He knows of my interest in ensuring that those who 
are here undocumented have the ability, who are now working, 
paying taxes, to pay more money, either by way of fines, to 
legalize their status or to access legalization--that is a 
better terminology--but also to pay for benefits, whether it 
the utilization of the public hospital system, the utilization 
of an education system, the utilization of the highways and 
byways that we use.
    And I can assure you my constituents in Texas want to do 
that. They want to be in a system of legalization that allows 
them to become additionally contributing members of this 
society.
    So they always say, expose your cards. And my cards are 
that I believe in the comprehensive approach--albeit I would 
like to call upon another name, maybe the ``Americanization'' 
approach--for people who are here, who want to be part.
    And I must say to the Chairwoman, let me thank her for her 
consistent journey toward that, and the Chairman of the full 
Committee, as we worked together in the minority reaching the 
same point.
    But I do want to applaud you for finding some aspect that 
needs to be addressed, and I would like to approach it in that 
context.
    Before I do so, let me just quickly say, in the 
verification effort, the Westat report of 2007 made a number of 
points that I think is important to put on the record: that, in 
this E-verification, we have had employers who are not trained 
employees. We have had employers who have used the process for 
pre-assessing or pre-consideration of employees, so they have 
this used this for the--they have used this, if you will, for 
the idea of screening their employees.
    We have 22 percent of employees reported that they 
restricted work assignments while employers were contesting 
their particular predicament. And then there are employers 
didn't fire these employees, and there were also those who 
didn't explain to the employees.
    So we know we have some weaknesses in this process.
    Congresswoman Giffords, what I like about what you are 
proposing is the idea of separating U.S. citizens from those 
who are immigrants. They go under DHS, is that correct?
    Ms. Giffords. That is correct.
    Ms. Jackson Lee. And citizens have another process.
    I heard my colleagues' questions. So let me ask you, what 
are the privacy protections that we would have in the system 
that you are purporting in your legislation?
    Ms. Giffords. Well, there are quite a few privacy 
protections, and the legislation is quite a bit different, of 
course, from the E-Verify system.
    First of all, it creates an alternate voluntary secure 
electronic verification system to identify employees' identity 
and eligibility through a lock, basically, once it is verified.
    It also establishes a network of private-sector, 
Government-certified companies to authenticate new employees' 
identities utilizing existing background check and document-
screening tools.
    Ms. Jackson Lee. So this is out sourcing, if I might? What 
protections in terms of those outsourced companies, what kind 
of vetting would they go through? And let me recall, of course, 
the loss of records by the Veterans Administration and others.
    Ms. Giffords. They would be certified through a process, as 
well, so that these firms, if the employer chooses to go 
through them, would go through a certification.
    Now, in follow-up to Congressman Gutierrez's, comments, 
there also would be an ability of a use of a biometric 
identifier if employers chose to present that information and 
go that route. But there is more protection under Social 
Security. There is a better ensurement under the workforce. 
Plus, it fundamentally shifts where U.S. citizens, where our 
databases should be held.
    Ms. Jackson Lee. And would you support, if I might, with 
this system, working a comprehensive approach or an 
Americanization approach, however we want to address it, to 
have those who are here find a vehicle, a pathway into 
legalization status?
    Ms. Giffords. I am not sure I understand your question. 
Could you repeat it?
    Ms. Jackson Lee. If this was to go forward, would you also 
see a complement to that a comprehensive approach to 
immigration?
    Ms. Giffords. Congresswoman Jackson Lee, I was a cosponsor 
of the STRIVE Act because I believe that the enforcement 
portion of illegal immigration is critical. I talked about the 
impacts illegal immigration has to southern Arizona. But we 
need to fix the system as a whole.
    And I am not happy that our Senate and this Congress has 
not moved forward faster. I know it is complicated. And I want 
to congratulate and compliment Chairwoman Lofgren for moving as 
much as we possibly can. But, yes, we need to have an overall 
fix, which requires a lot of different aspects.
    The illegal immigration system that we have, our system for 
immigration is broken in this country. But I believe that this 
portion, this small portion for employee verification is much 
better than we currently have in Arizona.
    Ms. Jackson Lee. Well, let me congratulate both of you. And 
certainly I want to congratulate Mr. Shuler, who I think has 
done a very hard task. And we have had some legislation like 
that, Mr. Shuler, in the past, that even Democrats have 
supported. So let's find our way to a compromise, and we can 
work through these issues of enforcement and work with some of 
the issues that you have raised. And let me thank you very 
much.
    And I yield back.
    Ms. Lofgren. The gentlelady's time is expired.
    I recognize now Mr. Goodlatte for his 5 minutes.
    Mr. Goodlatte. Thank you, Madam Chairman.
    I would like to thank both of our colleagues for their 
contribution today and ask them both if they would tell me if 
they think that--while I think we can acknowledge that the 
current system is not perfect, Mr. Shuler, do you believe that, 
in general, verification or E-Verify provides a useful tool for 
willing employers to identify whether employees are legal or 
illegal?
    Mr. Shuler. Yes, it does. It goes through the screening 
process. And also, to kind of follow up on Ms. Jackson Lee, it 
is not to be used for a prescreening process. You hire the 
person, and then you fill out the appropriate forms, whether it 
be online or call in and go through the E-Verify process. So, 
in doing that, it will actually--it is you are qualifying the 
person based on their skills, and then you follow that up with 
the E-Verify portion of it.
    And, in saying that, we are actually making sure everyone 
is actually on a level playing ground
    Mr. Goodlatte. Thank you.
    Ms. Giffords?
    Ms. Giffords. Congressman Goodlatte, Arizona--and I don't 
think you were here for my initial testimony--became the first 
State to roll out a mandatory requirement for employers to use 
E-Verify. We have heard from our business community in not just 
southern Arizona but around the State--I had over a dozen 
Chambers of Commerce from the State of Arizona here last month 
to come and present their information--that it has been 
burdensome and unreliable and very difficult to maneuver 
through with their employees. A lot of documentation to talk 
about that.
    So I am urging Congress, before we move forward with a 
national requirement to use the E-Verify system, that we look 
at Arizona's example. And there are some real issues.
    I have cosponsored legislation with Congressman Sam Johnson 
as an alternative to the E-Verify system, which would instead 
require U.S. citizens to use the Social Security database, the 
deadbeat database that 95 percent of all employers are 
currently using. Now, foreign-born workers would be required to 
go through the Department of Homeland Security, but--you know, 
there are significant differences with the bill. I think this 
approach is better
    Mr. Goodlatte. In that regard--because I certainly favor 
verification technologies. Whether we agree on a particular one 
to use or not, I think it is worthy of further exploration. 
But, in general, do you believe that the use of these 
verification technologies has resulted in more or less hiring 
of illegal aliens by those employers that use them?
    Ms. Giffords. Congressman Goodlatte, I support verification 
technology as well. I believe that all employers should be 
required to verify the status of the workforce. I think that is 
critical.
    Mr. Goodlatte. Do you think what has been done thus far has 
resulted in hiring fewer illegal aliens?
    Ms. Giffords. Congressman, it is difficult to say, because 
in Arizona, for example, we have about 15 percent of our 
employers that are using the E-Verify system. We really don't 
know yet, because we don't have everyone currently using the 
same system. For those employers that are choosing to use it, I 
believe that they are complying with the law.
    Now, whether or not the documentation that is being 
provided to them is legal documentation, the I-9 form, I am not 
sure. Again, NEVA takes away the I-9 form and uses better forms 
of documentation, more solid, three forms, instead of what the 
E-Verify system allows. I think, again, that is a better 
system.
    Mr. Goodlatte. Let me ask Mr. Shuler. Obviously, our effort 
here is to protect U.S. workers and to make sure that employers 
have the workforce they need, but that they are workers that 
are legally in the United States.
    Do you believe that if we made it mandatory, the net result 
would be fewer illegal aliens getting hired in violation of the 
law?
    Mr. Shuler. Yes. I think so many companies now are using E-
Verify. They are actually seeing that they are not having to be 
document experts. The I-9 form is a perfect example. When they 
look at the information, if a potential employee comes in, they 
don't have to be able to say, is this documentation that they 
are giving me, is this correct or is it false documentation?
    So utilizing this, the people who are abiding by the laws, 
the rule of the law, if they are abiding by it, they are seeing 
that in a thousand employees, 942 get instantaneous 
verification; 53 of them are nonconfirmation mismatch; and 5 
percent, only 5 of those thousand are actually contesting it.
    So we are seeing that 53 out of a thousand are actually 
walking away because they are here illegally. So I think the 
proof is there with the companies who are abiding by the laws 
we presently have on the books.
    Mr. Goodlatte. Madam Chair, if I might just ask one more 
follow-up.
    Ms. Lofgren. Yes.
    Mr. Goodlatte. So, in other words, when we utilize some 
form of a verification system--and I appreciate both of your 
efforts to come up with one. But even the E-Verify system, 
which clearly has some error rate, there----
    Mr. Shuler. --0.5.
    Mr. Goodlatte [continuing]. Is no doubt that some people 
are going to experience something there, that nonetheless gives 
the employer and our Government, our citizens, if you will, 
with regard to our policy of not hiring illegal aliens, a much 
more sophisticated additional check to the documents that are 
presented to the employer, which we know are often fraudulent 
and cannot be by themselves often verified on their face by the 
employer, who is not an expert in these documents.
    So, taking it to the next step, even if it does raise 
question with a certain percentage of those who are checked, 
the remainder of the people are either cleared through or are 
found to be illegally in the country, and those that are in the 
question-mark area, well, we need to take further steps beyond 
that to figure that out. But at least we have significantly 
improved upon the process of simply relying upon the paper that 
is in front of the employer.
    Mr. Shuler. Absolutely. And it takes the liability off of 
the employer once they verify and they download, they print out 
the copy of the E-Verify form. It will take the liability off 
the employer if there were to happen to be an error rate.
    Mr. Goodlatte. Thank you.
    Ms. Lofgren. The gentleman's time is expired.
    We do have two panels after this panel, so I am going to 
recognize my colleague from California for 5 minutes.
    Ms. Waters. Thank you very much, Madam Chairman, again. Let 
me thank you for the tremendous work you are doing trying to 
deal with the serious problem that confronts this Congress, 
that we are having difficulty dealing with the comprehensive 
immigration reform. But you certainly are getting into all 
aspects of it through this Committee.
    I am just wondering, there are several articles in today's 
newspapers about the FBI's inability to do the screening and 
that you have a lot of legal immigrants who are waiting for 
years to get their citizenship.
    Now, as I understand it, if these legal immigrants are in 
the system and they cannot get, I guess, their visas and their 
citizenship, how are they treated in the E-Verify system? Mr. 
Shuler, do you know?
    Mr. Shuler. Through DHS. If they are here legally, they are 
confirmed through DHS.
    Ms. Waters. What does that mean?
    Mr. Shuler. When we go through E-Verify and put the 
information in, you either come back confirmed, basically, they 
have the right to work in the United States, or a mismatch, 
nonconfirmation. And in those processes, DHS, obviously, you 
will have the confirmation that they have the right to work in 
the United States.
    Ms. Waters. Well, I question all of these systems. I 
question the fact that the FBI cannot do the verifications. 
They are backed up. You don't have enough employees. The 
technology is outdated.
    I question whether or not we really know whether or not 
there is a .5 percent error or a 4 percent error in the E-
Verify system. How can you be so sure that it is only a .5 
percent error in the E-Verify system? What makes you so 
confident?
    Mr. Shuler. Well, first and foremost, it has been proven. 
It has been since 1996 when, actually, E-Verify was in place. 
It is not a system that we are having to rethink or revamp. It 
is actually a system that has been in process for quite some 
time. The statistics show--Westat, an independent audit of E-
Verify, said it was a .5 percent error rate that would happen.
    DHS also says there is not one person to have ever been 
denied employment, of their knowledge, based upon an error, to 
their knowledge, not one. And every one of our staffers, 
everyone that works on the Hill goes through E-Verify. That is 
all of the employees here. I don't know if they E-verified us 
as Members, but certainly the staff who works with us.
    Ms. Waters. I think that the inspector general would 
disagree with you because of the audit that it did. They are 
the ones who came up with the 4 percent error.
    Mr. Shuler. Well, that is just on the Social Security 
database. You have to separate the Social Security database and 
the E-Verify system, because it goes through two systems, and 
it is in the process of going through multiple systems.
    And, remember, E-Verify is similar to, like, Googling. When 
you type in the information, you get the verification back. 
Actually, in my office, I did myself, and it came back 
confirmed for eligibility of employment. And it was less than 5 
seconds. You know, it was very similar to Googling. You type in 
a search word or something, and it comes back in less than 1 
second. That is how the confirmation came back in our office.
    Ms. Waters. Well, Congresswoman, if it is that good, what 
are you complaining about?
    Ms. Giffords. Congresswoman, we have numerous examples, 
including the GAO, including the inspector general, that said 
that the basic pilot of the E-Verify system has significant 
weaknesses, which includes reliance on these Government 
databases that have an unacceptably high rate of error.
    My colleague, who I applaud for his hard work, continues to 
talk about how every Member here in the Congress is able to 
just fly through the system. Yet, we have one of our important 
staff members, Traci Hong, who is with us, who herself had an 
issue when she went to go apply through the system. There is an 
article here in the USA Today that talks specifically about the 
problem that Traci had.
    Ms. Lofgren. It is a good picture of her, too.
    Mr. Shuler. But I think it was fixed. I think it was--
obviously it was fixed, a couple of times, because of the name 
change.
    Ms. Giffords. And, Congresswoman, as well, if the E-Verify 
system relies on the Social Security database, you can't talk 
about one and not the other. You can't pull out part of the 
database. It's fuzzy math to say that the E-Verify only has a 
.5 percent reliability rate if it requires the use of a Social 
Security database.
    I think what we all want is the same system. Again, what I 
am saying is that, you know, I have a case model in my State 
where the system is not working as well as it needs to be. And 
there are some philosophical differences with the system as 
well, as far as protections for U.S. citizens.
    Ms. Lofgren. The gentlelady's time has expired.
    Ms. Waters. If I may----
    Ms. Lofgren. Yes?
    Ms. Waters [continuing]. Thirty more seconds?
    Ms. Lofgren. Okay.
    Ms. Waters. Let me just say this, that there has been a lot 
of talk about the Social Security system here. And, of course, 
in our office we do get Social Security complaints, and we work 
on them. But I am a big supporter of the Social Security 
system, and I think it does a good job for the millions of 
Americans here. And I would just disagree with those who think 
that somehow the Social Security system is so flawed that it 
could not do a good job with this. So I just want to speak up 
for Social Security here today.
    Ms. Lofgren. All right. Well-noted.
    We will turn now to Congressman Lungren for his 5 minutes.
    Mr. Lungren. Thank you very much, Madam Chair.
    As one of the key authors of the Simpson-Mazzoli bill in 
1986, I am one of those responsible for making it illegal for 
employers to hire illegal aliens. We put that in as a balance 
to the other side of the bill, which was the legalization 
program, the most successful and largest-scale legalization 
program in the history of the country. The legalization part 
worked; the enforcement part never did.
    I hope my friend, Mr. Shuler, understands what the term 
``slow-walking'' means. We can postpone this, and we can find 
every problem, and we can understand that every pebble is a 
boulder, and we can make sure that we don't put something in 
until the system is perfect, and we will be right in the 
situation 20 years from now that we are in right now. We never 
enforced it. We never enforced it. If we wait until the Social 
Security system is perfect, we will never put this in.
    There are imperfections involved, but, as the gentleman 
from Virginia suggested, the purpose of this is to make sure 
that American workers who are here legally, whether they are 
native-born or whether they have been legalized or whether they 
have a permanent resident alien card, have the right to get a 
job and the people here illegally do not have the right to get 
a job. I mean, that is what we are talking about. And we are 
talking about millions of jobs that are taken by those who are 
here illegally. So I hear, well, we might have a couple 
thousand people that will be, on initial check, turned down. 
But, as you suggest, on secondary check, almost all of those 
are taken care of. So I hope we put it in the proper context.
    As I sit here, I am reminded this is the week of D-Day and 
the follow-on that my dad was involved in. And had Eisenhower 
faced D-Day the way we seem to be looking at this problem, we 
never would have left England, because we would have waited for 
absolutely perfect weather, we would have made sure everybody 
had their assignment, we would have made sure no one was 
dropped in the wrong place, we would have made sure that the 
Germans absolutely were asleep in every single situation, and 
we never would have succeeded.
    Sometimes Government has to rise to the challenge. And it 
seems to me, Mr. Shuler, you suggested to us that the time is 
now for us to rise to the challenge. Would you have any problem 
in your proposal to have one element of the other bill put on--
that is, that we move toward biometric as we move along with 
this system, biometric identification in the Social Security 
system?
    Mr. Shuler. I couldn't agree more with you about moving 
along. One of the things that we have to do, it can't be a 
voluntary basis like the other piece of legislation. It has to 
be a mandatory. If not, no one is going to use the system, and 
we are going to be just like we are today 20 years from now.
    Mr. Lungren. It has kind of been a voluntary system for the 
last 20 years.
    Mr. Shuler. Yes, it has been that way, so why go through a 
voluntary system like the other piece of legislation? It has to 
be mandatory.
    But we have that process. It is complete. The Secretary 
says it is ready for a national rollout. So I feel very 
comfortable, very confident in the system proceeding forward.
    Mr. Lungren. And, Congresswoman Giffords, you suggested 
that there was an error rate or a decline of 3,000 per 100,000 
or whatever it was. Is that correct? But that was on initial 
check, was it not?
    Ms. Giffords. Congressman, I am talking specifically about 
the problems we have with non-U.S. workers.
    Mr. Lungren. No, no, but I am asking, you gave a figure of 
3,000, but that was on the initial review, right?
    Ms. Giffords. Ten percent. But not authorized----
    Mr. Lungren. I am just trying to ask you whether that is 
the initial check.
    Ms. Giffords. Yes, sir.
    Mr. Lungren. So then what is the decline rate after the 
secondary check? If you are starting with 3,000, what do we go 
down to?
    Ms. Giffords. We don't know. It is actually closer to 
30,000 for the State of Arizona. And we don't know because----
    Mr. Lungren. Well, then what is it on the secondary?
    Ms. Giffords [continuing]. There are 8 days then to be able 
to follow up and clear up your paperwork. And if you don't 
resolve the error within 8 days, you may be fired. So whether 
or not that resolution happens, we don't know, because----
    Mr. Lungren. So we don't know what that number is.
    Ms. Giffords. We don't know.
    Mr. Lungren. Now, I was also interested in your comment 
about agriculture. I happen to believe that the case for 
agriculture is proven. I mean, we have had it in your State, in 
my State of California for well over 100 years. We rely heavily 
on foreign workers. We ought to have a program that allows them 
to come in legally when we establish that.
    But then you went on to talk about it is tough to get 
people making $7, $8 an hour working in 115-degree temperature, 
working--I forget in what situation it was. Do you really think 
we can't get American workers to work in construction and these 
other areas?
    Ms. Giffords. Congressman, I was making a point about how 
challenging it is in southern Arizona for our----
    Mr. Lungren. No, I understand, but my question is: Do you 
think we can't get American workers in construction or these 
other areas where you say it is difficult to get someone making 
$7 an hour working in 100-and-whatever-it-is-degree 
temperature?
    Ms. Giffords. Congressman, we have a lot of U.S. citizens 
that are not working that should be working, and the 
construction industry is a good place for them to be.
    Mr. Lungren. I absolutely agree----
    Ms. Lofgren. The gentleman's time has expired, unless he 
wants an additional few minutes?
    Mr. Lungren. Well, I would like the same indulgence others 
have had, if you don't mind.
    Ms. Lofgren. We will give you an additional minute. 
    Mr. Lungren. I mean, I have been here back and forth over a 
30-year period of time, and one of things that has absolutely 
bedeviled me is how we don't do something affirmatively to 
increase job opportunities for our inner-city youth, for 
African American males between 18 and 30. And it just seems to 
me that the construction trade is a tremendous opportunity for 
them. And I have seen over the last 20 years the presence of 
illegal aliens in the construction industry grow and grow and 
grow and grow. And now I hear arguments that somehow we need to 
legalize people who came here illegally for the construction 
trade.
    And while I am very sympathetic to the fact that American 
employers need to have an available workforce, and that ought 
to be proven, I just look at what has happened over the last 25 
years and I have to throw up my hands and say, ``Don't we have 
an obligation to take care of Americans first?''
    Ms. Giffords. Absolutely.
    Mr. Lungren. As generous as we are to the rest of the 
world, and when we have high unemployment rates, particularly 
among African American males age 18 to 35, don't we have some 
obligation to think about them first before we start thinking 
about others?
    And maybe that is an unconventional thought, but I think 
that ought to be wrapped into the process of why we want to 
have E-verification, and then move on perhaps to a biometric 
which allows us to bring those mistakes down. But we have to 
get started somewhere.
    I thank both of you for testifying, and I thank the 
Chairwoman for her indulgence.
    Ms. Lofgren. The gentleman's time has expired.
    I will just make a couple of statements, and I have just 
one question for Ms. Giffords.
    I think this has been a useful morning. We do appreciate 
the time you have spent with us. I know how busy everyone's 
schedule is.
    I think that, to some extent, really in defense of what we 
are doing, there was no examination of this subject by my 
predecessor as Chair. I think we had more hearings in the first 
month of my Chairmanship than we had in the prior Congress. But 
we do need to examine where we are going before we leap, it 
seems to me.
    And I think there are some things that need to be pointed 
out. I mean, the fact that someone walks away from a mismatch 
doesn't mean that they are illegal. Right now this is a 
voluntary system, and if you are going to be a bus boy at one 
restaurant that is using E-Verify, and it is a problem, instead 
of going to the Social Security system five times, you can just 
be a bus boy at the restaurant next door that doesn't use E-
Verify. So we can't make assumptions based on that. We need 
data. It is hard to get.
    I would note also that we don't know exactly what the 
percentage of mistakes are in the database at Social Security. 
But if we have 5 percent unemployment and we have got, let's 
say, 4 percent of the U.S. citizens get wrong information, we 
could have unemployment go to 9 percent of American citizens, 
if some of the information we are being told is correct. So we 
want to make sure that we know what we are doing before we move 
forward.
    And I will just mention, Ms. Giffords, as you did, that we 
have a Texas lawyer here sitting to my right, Traci Hong. She 
is a naturalized American citizen, has been an American citizen 
for several decades. And the House of Representatives uses E-
Verify, and so when I hired Ms. Hong, she went down and she got 
a report that she wasn't authorized, which came as quite a 
surprise to her. I mean, she gets, like all of us do, her 
Social Security sent to her once a year, how much you can 
expect in your benefits and the like, but Social Security 
Administration just had it wrong. I mean, it took her six 
separate trips to try and straighten this out. And she is an 
immigration lawyer working for the Chair of the Immigration 
Subcommittee.
    So we need to make sure that the rights of Americans are 
protected in whatever system we do. I give both of you loads of 
credit for the time and effort that you have put into this 
subject. It is an important one. I think we all agree that we 
need to have a system in place, and your contribution is going 
to be very material as we move forward in this effort.
    So I said I just had one question, and it is for you, 
Congresswoman Giffords. As you described the outsourcing, for 
lack of a better word, I was reminded--I am a Clear Pass 
member. I have a little biometric card. Whenever I go to the 
airport, I put it in, and I put my index finger--are you 
thinking something along those lines?
    Ms. Giffords. Madam Chair, yes, a biometric identifier is 
an option that employers can choose to take, if they go that 
route. We have a lot of flexibility. It is a mandatory 
requirement that you go through the verification system, but 
that would be an additional step of protection that employers 
could have.
    Ms. Lofgren. So the Government wouldn't necessarily have 
all of that, and there would be that level of protection, is 
what you are proposing.
    We have two panels following. I am going to thank you both 
for coming, for your hard work on this, and for the information 
you have given us here today.
    Mr. Shuler. Thank you, Madam Chair.
    Ms. Giffords. Thank you.
    Ms. Lofgren. Thank you very much.
    We will now ask our next witness to come forward.
    I am pleased to welcome Jonathan Scharfen, who is the 
acting director of the U.S. Citizenship and Immigration 
Service.
    Mr. Scharfen retired from the United States Marine Corps in 
August 2003, after 25 years of active-duty service. He then 
served as chief counsel and deputy staff director of the House 
International Relations Committee until July 2006.
    Mr. Scharfen received his bachelor's degree from the 
University of Virginia, his juris doctorate degree from the 
University of Notre Dame, and his LLM from the University of 
San Diego. He also attended the U.S. Army War College in 
Carlisle, Pennsylvania, where he studied national security 
strategy.
    He is married and has three children.
    As you know, Mr. Scharfen, your full statement will be made 
part of the official record of this hearing. We would ask that 
you give your testimony in about 5 minutes, if you would, 
please.

   TESTIMONY OF JONATHAN ``JOCK'' SCHARFEN, ACTING DIRECTOR, 
       UNITED STATES CITIZENSHIP AND IMMIGRATION SERVICE

    Mr. Scharfen. Thank you very much, Chairwoman Lofgren, 
Ranking Member King, Members of the Subcommittee. I am grateful 
for the opportunity to be here before Congress to discuss our 
shared goal of effective employment eligibility verification.
    At DHS, USCIS is responsible for administering the E-Verify 
program in partnership with the Social Security Administration. 
Any participating company can access E-Verify through a user-
friendly Government Web site that verifies information 
submitted by employees with more than 449 million records in 
the Social Security Administration database and more than 60 
million records in DHS immigration databases.
    E-Verify is the only available tool for employers to gain 
quick and easy verification information for their new hires. 
Over 69,000 employers, representing over 269,000 work sites, 
use the E-Verify program. And the number of registered 
employers is growing, on average, over 1,000 per week. The 
number of employers enrolled this fiscal year has already more 
than doubled since November. Since 2004, E-Verify has been 
available to employers in all 50 States and in most U.S. 
territories.
    Last August, the Administration pledged to commence a 
rulemaking process to require all Federal contractors and 
vendors to use E-Verify. And this proposed rule has been 
submitted to the Federal Register for imminent publication. 
Yesterday, Secretary Chertoff designated E-Verify as the system 
Federal contractors shall use.
    In partnership with the Social Security Administration, we 
have made significant improvements to decrease mismatch rates 
and ensure data accuracy, ensure that the program is user-
friendly, and protect employees' rights.
    Over the past year, E-Verify automated its registration 
process, instituted a system change to reduce the incidence of 
typographical errors, incorporated a photo screening tool for 
DHS documents to combat document fraud, established monitoring 
and compliance units and privacy functions to maintain system 
integrity, added new databases that are automatically checked 
by the system, and established a new process for employees to 
call USCIS's toll-free number to address citizenship mismatches 
as an alternative to visiting the Social Security 
Administration, all in an effort to establish efficient and 
effective verification.
    The most recent statistics appear to show that the share of 
legal workers who are not automatically confirmed by E-Verify 
as work-authorized is decreasing. Furthermore, USCIS plans to 
add the ability to query by passport number to E-Verify this 
fall, which will further reduce error rates, and is also 
working to add visa and passport photos to the photo tool 
function. Additional improvements seek to ensure that the data 
relied upon by E-Verify is as up-to-date as possible.
    Independent studies show that E-Verify is an accurate and 
effective tool. Currently, 99.5 percent of all work-authorized 
employees queried through E-Verify were verified without 
complication or having to take any type of corrective action. 
Overall, the Westat evaluation found that over 94 percent of 
all cases are automatically found to be employment-authorized.
    The E-Verify program has substantially increased its 
customer service and program staff over the past 2 years in an 
effort to work with employers and ensure that every question or 
difficulty that arises is addressed. The E-Verify program 
outreach staff has conducted numerous training programs and 
workshops across the country to inform employers about the 
system and the benefits of using E-Verify to verify the work 
authorization of their employees.
    An effective electronic work authorization verification 
program is critical to reducing the jobs magnet that encourages 
illegal immigration, but the program also must include robust 
tools to detect and deter employer and employee fraud and 
misuse. We are aware that some aliens without work 
authorization use identity fraud to obtain employment in this 
country. To help prevent this problem, the E-Verify program 
introduced the photo screening capability into the verification 
process last September. This tool allows employers to determine 
if the DHS document presented by the employee has been photo-
substituted. Through use of the photo tool, several cases of 
document and identity fraud have been identified, and 
unauthorized workers have been prevented from illegally 
obtaining employment.
    When Congress created what is now the E-Verify program in 
1996, it initially set a 5-year time limit on the program. 
Recognizing the importance of electronic worker eligibility 
verification, Congress has twice chosen to continue the program 
since its initial authorization. The current language of the 
statute directs DHS to terminate the program at the end of 
November of this year. I respectfully urge the Committee to act 
immediately to extend E-Verify permanently.
    Efforts to improve agency systems and policies related to 
E-Verify that have been on going since 2003 continue to show 
positive and tangible results. DHS will continue to work with 
the Social Security Administration to operate and enhance the 
E-Verify program.
    Thank you for the opportunity to testimony today. I am 
grateful for the support of the Members of this Subcommittee, 
and ask for your continued commitment to the program. Thank 
you.
    [The prepared statement of Mr. Scharfen follows:]

           Prepared Statement of Johnathan ``Jock'' Scharfen

                              INTRODUCTION

    The E-Verify program (formerly known as Basic Pilot) is a Web-based 
system that electronically verifies the employment eligibility of newly 
hired employees. This initiative is a partnership between the 
Department of Homeland Security (DHS) and the Social Security 
Administration (SSA). U.S. Citizenship and Immigration Services 
(USCIS), the agency in DHS responsible for immigration services, 
administers the program.
    E-Verify is an essential tool for employers committed to 
maintaining a legal workforce. Any participating company in the United 
States can access E-Verify through a user-friendly government Web site 
that compares employee information taken from the Form I-9 with more 
than 449 million records in the SSA database, and more than 60 million 
records in DHS immigration databases. Currently, 99.5 percent of all 
work-authorized employees verified through E-Verify are verified 
without receiving a Tentative Non-confirmation (TNC) or having to take 
any type of corrective action. Those employees whose work authorization 
cannot be instantly verified are given the opportunity to work with SSA 
or USCIS, as appropriate, to confirm their work authorization. USCIS 
estimates one percent of all queried employees choose to contest an 
initial, tentative result from E-Verify showing that their work 
authorization could not be verified, and only half of those who contest 
that result are ultimately found to be authorized. The most recent 
statistics appear to show that the share of legal workers who are not 
instantly confirmed by E-Verify as work authorized is decreasing 
further, but those numbers need more study. Furthermore, USCIS plans to 
add the ability to query using passport information this fall, which 
will reduce the rate of TNCs for U.S. citizens further, and is also 
working to add visa and passport photos to the photo tool function.
    Over 69,000 employers, representing over 269,000 worksites, 
currently are signed up to use the E-Verify program, and the number of 
registered employers is growing on average over 1,000 per week. E-
Verify is the best available tool for employers to gain quick and easy 
verification information for their new hires, and we are committed to 
working with your Committee and other members of Congress to achieve 
our shared goal of effective employment eligibility verification.

                    HISTORY OF THE E-VERIFY PROGRAM

    Congress established the Basic Pilot, now E-Verify, as part of the 
Illegal Immigration Reform and Immigrant Responsibility Act (IIRIRA) of 
1996 to verify the employment eligibility of both U.S. citizens and 
noncitizens at no charge to the employer. The program was first made 
available on a voluntary basis in 1997 to employers in the five states 
with the largest immigrant populations: California, Florida, Illinois, 
New York and Texas. Originally set to expire in 2001, E-Verify has been 
extended twice, and is due for reauthorization by Congress by November 
2008. Since 2004, it has been available to employers in all 50 states 
and in the U.S. territories where U.S. immigration laws apply.
    Since 2006, the number of employers registered has doubled in size 
each year. We have seen a substantial increase in the number of states 
with legislation or Executive Orders that require E-Verify use for some 
or all employers under their jurisdiction. Arizona and Mississippi have 
laws requiring all employers in the state to use E-Verify; and 
Colorado, Georgia, Minnesota, Oklahoma, North Carolina, Rhode Island, 
South Carolina and Utah require some employers to use E-Verify. A 
directive issued last year from the U.S. Office of Management and 
Budget (OMB) required all Federal government agencies to sign up to use 
E-Verify by October 1, 2007. Last August, the Administration pledged to 
commence a rulemaking process to require all Federal contractors and 
vendors to use E-Verify and OMB recently concluded its review on this 
proposed rule. On June 6, the President signed Executive Order 12989 
directing the Secretary of Homeland Security to designate an electronic 
employment eligibility verification system for Federal contractors to 
use. Yesterday, the Secretary designated E-Verify as the system Federal 
contractors shall use.
    Additionally, in the past few months a number of DHS regulations 
were published that require employers to register with E-Verify before 
obtaining certain benefits. These include (1) a regulation enabling 
certain F-1 students in Optional Practical Training to apply for a 17-
month extension of their employment authorization if they are employed 
by an E-Verify registered employer and (2) the proposed rule reforming 
the H-2A agricultural worker program, would allow H-2A workers who are 
changing employers to begin work with the new employer before the 
change is approved only if the new employer participates in E-Verify. 
Participation and usage of E-Verify is expected to grow significantly 
over the next few years.

                           HOW E-VERIFY WORKS

    Within three days of hiring an employee, the participating employer 
is required to enter information from the Form I-9 (Employment 
Eligibility Verification form), including the employee's name, date of 
birth, Social Security number (SSN) and citizenship status, into E-
Verify and submit a query. Within seconds, the employer receives a 
response.
SSA Verification
    For all workers, the system transmits, in a secure manner, the new 
hire's SSN, name, and date of birth to SSA to verify that data against 
the information recorded in its NUMIDENT database. For those employees 
whose work authorization status can be verified automatically (i.e. 
whose SSA record matched and confirms U.S. citizenship), the process 
ends here with a confirmation response returned to the employer through 
the system within seconds. In the remaining small minority of cases 
where the SSA record does not match what the employer has put into the 
system, the system issues an SSA TNC to the employer. The form is 
available in English or Spanish.
    When a TNC is issued, the employer must notify the employee and 
give the employee the opportunity to contest that finding. If the 
employee chooses to contest the SSA TNC, he or she has eight business 
days to visit an SSA office with the required documents to initiate the 
process to prove identity and support the correction of the SSA record. 
Until the TNC is resolved, the employee must be allowed to keep working 
and cannot be fired or have any other employment-related action taken 
against him or her because of the TNC. If the employee fails to contact 
SSA within the eight-day period, the employee is considered a no-show 
and a final non-confirmation is issued by E-Verify. At this point, the 
employer should terminate employment. A recent electronic business 
process enhancement, EV-STAR, allows SSA to use the E-Verify system to 
automatically inform the employer of the case resolution once the 
employee visits SSA and resolves the issue.
    Correcting SSA records is a useful byproduct of the E-Verify 
process since it helps individuals identify and resolve problems with 
their Social Security records. The work done to update records in order 
to resolve an E-Verify mismatch may need to be done at a later time 
when the individual applies for Social Security benefits.
DHS Verification
    If the query involves a noncitizen worker, the employee's name, 
date of birth and SSN are matched with SSA records as they are in U.S. 
citizen cases. If the information matches SSA records, then the DHS 
identification number and work authorization information are also 
matched against DHS databases. If the information cannot be verified 
electronically, the case is forwarded to a USCIS Immigration Status 
Verifier (ISV), who researches the case and provides an electronic 
response within one business day, either verifying work authorization 
or issuing a DHS TNC.
    As with the SSA process described above, if the employer receives a 
TNC, the employer must notify the employee and provide him or her with 
an opportunity to contest that finding. An employee has eight business 
days to call a toll-free number (which provides support in ten 
different languages) to initiate the process to contest the finding. 
Until the TNC is resolved, the employee must be allowed to keep working 
and cannot be fired or have any other employment-related action taken 
against them because of the TNC. Once the necessary information from 
the employee has been received by phone or fax, a USCIS Immigration 
Status Verifier resolves the case, typically within three business 
days, by issuing either a verification of the employee's work 
authorization status or a DHS final non-confirmation. If the employee 
fails to contact DHS or SSA within the eight-day period, the employee 
is considered a no-show and a final non-confirmation is issued by E-
Verify. At this point, the employer should terminate employment.

                      THE CURRENT E-VERIFY SYSTEM

    Under USCIS management and in cooperation with SSA, the program is 
continuously improving its processes to decrease mismatch rates and 
ensure that E-Verify is fast, easy to use, and protects employees' 
rights. Over the past year, E-Verify has automated its registration 
process, instituted a system change to reduce the incidence of 
typographical errors, incorporated a photo screening tool for DHS 
documents to combat more sophisticated forms of document and identity 
fraud, established Monitoring and Compliance staff to maintain system 
integrity, and added new databases that are automatically checked by 
the system. In addition, it has established a new process for employees 
to call USCIS' toll-free number to address citizenship mismatches as an 
alternative to visiting SSA, all in an effort to establish efficient 
and effective verification.
E-Verify is the most accurate and efficient way to verify employment 
        authorization.
    E-Verify generates ``mismatches'' (or TNCs) when the information 
supplied by the employee or employer does not match the information 
that either SSA or DHS has on file. In almost every case, a mismatch 
will occur either because the employee is actually not authorized to 
work (five percent of all queries based on the September 2007 Westat 
Evaluation); because the employee has not yet updated his or her 
records with SSA (for example, to reflect name or citizenship status 
changes); or because the employer made an error inputting information 
into the system. Where there is a TNC, E-Verify gives the employee the 
opportunity to take further action and correct his/her record with the 
appropriate agency if they believe the mismatch is an error. Once a 
record is corrected, it remains corrected. That employee will likely 
not face another TNC if he or she takes a different job with another 
employer unless the employee has a subsequent change in his or her 
information. As noted above, correcting these records is important for 
individuals to receive credit for their full work history when they 
file for Social Security benefits. Moreover, correcting these records 
reduces the chance that they or their employers will receive no-match 
letter from the SSA pointing out a discrepancy between the employees' 
personal information and the social security number reported for them.
    The opportunity to contest an E-Verify finding is an important step 
that seeks to ensure that no employee who is in fact work authorized is 
prevented from working. All employers are required to ensure that 
employees who receive a TNC are given the opportunity to contest that 
finding and correct their records. Legal workers who contest will be 
found employment authorized after resolution of the initial mismatch 
and suffer no permanent adverse consequences.
    Recent studies show that E-Verify is an accurate and effective tool 
for verifying the work authorization status of employees. For the past 
few years, E-Verify has been independently evaluated by Westat, a 
social science research firm, which has monitored the effect of various 
changes made to the E-Verify system. Currently, 99.5 percent of all 
work-authorized employees verified through E-Verify were verified 
without receiving a TNC or having to take any type of corrective 
action. Though the 0.5 percent of all work-authorized employees who 
receive TNC is very small, our goal is to reduce it even further. 
Overall, Westat most recently found that over 94 percent of all cases 
queried through E-Verify are automatically found to be employment 
authorized
    A large portion of the employees who successfully contest an SSA 
TNC are those who have recently naturalized. As of May 5, 2008, some of 
these mismatches no longer occur, as the system now automatically 
checks USCIS naturalization records before issuing a citizenship status 
mismatch. In addition, naturalized citizens who receive a mismatch are 
now able to contact DHS by phone to address the discrepancy. USCIS and 
SSA are also exploring enhancements, including a direct data share 
initiative that would update SSA's database with naturalized citizen 
information.
    E-Verify also added the Integrated Border Inspection System (IBIS) 
real time arrival information for non-citizens to its databases as of 
May 5, 2008, which reduced E-Verify mismatches that resulted from 
noncitizen arrival information that had not yet been entered into the 
databases E-Verify previously verified against. The addition of this 
data to the E-Verify system is expected to reduce the number of 
mismatches that occur for newly arriving workers who entered the 
country legally and sought work immediately after having entered the 
country.
    E-Verify plans to incorporate U.S. passport information into the 
employment verification process. The use of U.S. passport information 
will help instantly verify those employees who present U.S. passports 
as proof of employment authorization and identity and may have 
previously received TNCs since they derived citizenship as children 
when their parents naturalized or they were born abroad to U.S. citizen 
parents; both populations which currently receive a disproportionate 
numbers of TNC. We are grateful for the hard work of the Department of 
State in working towards this important data sharing initiative.
    These improvements all seek to ensure that the data relied upon by 
E-Verify is as up-to-date as possible. In some cases, however, the only 
way for a person's records to be kept accurate is for that person to 
report name changes and the like to SSA. Because not everyone in the 
U.S. workforce is unfailingly diligent in this area, there will always 
be a small number of legal workers who will have to go through the TNC 
process. Nevertheless, we continue to work on the system to ensure that 
every error that can be prevented through government data processes 
will be avoided.
E-Verify is an efficient and easy system for employers to use.
    Participating employers are largely satisfied with the E-Verify 
program. Last year, the Westat evaluation reported that ``[m]ost 
employers found the Web Basic Pilot (E-Verify) to be an effective and 
reliable tool for employment verification'' and 96 percent did not 
believe that it overburdened their staffs.
    The E-Verify program has substantially increased its customer 
service and program staff over the past two years in an effort to work 
with employers and ensure that every question or difficulty that arises 
is addressed. The E-Verify program outreach staff has conducted 
numerous training programs and workshops across the country to inform 
employers about the system and the benefits of using E-Verify to verify 
the work-authorization of their employees.
E-Verify program staff is committed to maintaining the integrity of the 

        SYSTEM AND EFFECTIVELY PREVENTING DISCRIMINATION AND MISUSE.

    An effective electronic work authorization verification program is 
critical to reducing the job magnets that encourages illegal 
immigration, but the program also must include robust tools to detect 
and deter employer and employee fraud and misuse. A recent independent 
evaluation of the E-Verify program found that employer compliance with 
program procedures is improving, but identified the methods by which 
some E-Verify employers may be using the program incorrectly. Failure 
to follow E-Verify procedures can result in discrimination and reduce 
the effectiveness of the program in decreasing unauthorized employment. 
We are dedicated to reducing E-Verify misuse through employer training, 
educational outreach, print and electronic resources, and our 
monitoring and compliance program.
    USCIS has been conducting extensive outreach across the country to 
inform both employees and employers of their rights and 
responsibilities within E-Verify. The goal is to reinforce 
understanding of how to use the program correctly. Materials about 
employer and employee rights and responsibilities are currently 
available in both English and Spanish, and will be available later this 
year in additional languages. Outreach efforts have included radio, 
print and billboard public awareness campaigns in Arizona, Georgia, DC, 
Maryland, Virginia, and soon Mississippi, as well as nationally 
available internet advertisements.
    USCIS has also been working to further inform employers and 
employees on the proper E-Verify procedures through system materials. 
Information on employee rights and responsibilities is now included in 
the referral letters given to employees during the TNC process. We are 
also working to refine the training materials and online resources for 
users of the program to more clearly outline the methods for proper 
system use.
    USCIS has begun preliminary monitoring and compliance of employer 
program usage to detect and deter potential misuse and abuse of the 
program. Among the behaviors we are looking out for are SSNs or alien 
numbers fraudulently being used, whether the employer is properly 
referring workers who receive TNCs, and or taking adverse actions 
against such workers, and whether an employer is improperly attempting 
to verify all existing employees. USCIS works closely with the 
Department of Justice Office of Special Counsel for Immigration-related 
Unfair Employment Practices (OSC) for Unfair Immigration Related 
Employment Practices to help ensure that employment authorized 
employees are not adversely impacted by the program.
    The Monitoring and Compliance unit also works to safeguard personal 
privacy information; prevent the fraudulent use of counterfeit 
documents; and refer instances of fraud, discrimination, and illegal or 
unauthorized use of the system to enforcement authorities. Once fully 
staffed, the E-Verify Monitoring and Compliance unit will carry out its 
mission by educating employers on compliance procedures and guidelines 
and providing assistance through compliance assistance calls. The unit 
will also conduct follow-up with desk audits and/or site visits to 
unresponsive employers if necessary, and refer cases of fraud, 
discrimination and illegal use to OSC or U.S. Immigration and Customs 
Enforcement (ICE), as appropriate.
E-Verify prevents certain types of document fraud.
    We are aware that some aliens without work-authorization use 
identity fraud to obtain employment in this country. To help prevent 
this problem, the E-Verify program introduced a photo screening 
capability into the verification process last September. This tool 
allows employers to determine if the DHS document presented by the 
employee has been photo-substituted. Through use of the photo-tool, 
several cases of document and identity fraud have been identified, and 
unauthorized workers have been prevented from illegally obtaining 
employment. The tool allows a participating employer to check the 
photos on Employment Authorization Documents (EAD) or Permanent 
Resident Cards (green card) against images stored in USCIS databases. 
The goal of the photo tool is to help employers determine whether the 
document presented reasonably relates to the individual and contains a 
valid photo. All employers registered to use E-Verify, with the 
exception of those who use designated agents or a web services 
application, are now using the photo screening process when the worker 
presents one of the documents currently available in the photo tool 
database. USCIS is currently working to change the business processes 
for designated agents and web services users of E-Verify to enable them 
to use this photo screening capability
    We are also working to expand the types of documents for which the 
E-Verify system will allow photo confirmation. Currently, only DHS-
issued identity documents are displayed in the photo tool. To this end, 
USCIS is working with the Department of State to add visa and passport 
photos to the photo tool database. The strength of this tool is 
directly dependent on the range of documents for which it can be used, 
and our long-term goal is for the E-Verify photo screening process be 
able to verify the photos on all identity documents that an employee 
may present as acceptable Form I-9 documentation.
    USCIS is aware of the prevalence of identity fraud in this country, 
and is especially concerned with how this practice affects E-Verify. 
While we do not currently have any way to identify, upon initial 
verification, identity fraud by an employee who has stolen a valid SSN 
and identity information or has been supplied the information by their 
employer, we are examining ways to do so. What we are able to do with 
our Monitoring and Compliance unit is to identify indications that SSN 
fraud has taken place, and work with ICE, in cooperation with the SSA 
Inspector General, to deal with these cases. USCIS and ICE are 
currently finalizing a memorandum of understanding to identify 
instances where data sharing would be appropriate and we are currently 
identifying ways to assist each others' work.
The E-Verify program infrastructure is capable of handling the volume 
        of queries that would be necessary for a nationwide mandatory 
        employment verification system.
    In September of 2007, DHS and SSA conducted cooperative end-to-end 
load testing between SSA's NUMIDENT database and the Verification 
Information System (VIS), which is the database that supports E-Verify. 
The results of the testing showed that E-Verify has the capacity to 
handle up to 60 million queries per year. This capacity is in line with 
the projected 60 million new hire queries per year that would result 
from mandatory E-Verify legislation applicable to all U.S. employers. 
DHS will continue to work with SSA to update the current pilot 
architecture to ensure that DHS and SSA can provide the most stable 
environment possible to the employer community and to create an 
independent environment for E-Verify queries, separate from SSA's other 
processing needs.

                   CONCLUSION--THE FUTURE OF E-VERIFY

    We will continue to work with SSA to operate and enhance the E-
Verify program. Thank you for the opportunity to testify before this 
Subcommittee and we appreciate this subcommittee's continued support of 
the E-Verify program as it goes through the reauthorization process in 
the fall.

    Ms. Lofgren. Thank you very much, Mr. Scharfen.
    Now is the time when we can pose some questions. I will 
begin.
    One of the things that I had really not thought about 
before the Westat report is this question: We have thought a 
lot about the employees being screened, but if they are 
correct, there is not really any screening of the employers. We 
have an agreement. And the issue of whether a miscreant could 
pose as an employer, sign a contract with DHS, and obtain 
personal information about Americans that then would be used 
for identity theft or crime, can you address that issue?
    Mr. Scharfen. Yes, ma'am. First of all, the employer who 
would want to do such a scam would have to have an employment 
identification number that they have to first get from the 
Social Security Administration.
    Ms. Lofgren. That is not too hard to get.
    Mr. Scharfen. I agree, it probably would not be that hard 
to get. But the system itself is designed in such a way that 
the employer isn't reaching up and grabbing personal 
information from the system and pulling into his possession. 
What he is doing is he is uploading names, Social Security 
numbers, date of birth, and that information that he has 
collected off of the I-9 program, which is already collected--
--
    Ms. Lofgren. So he is getting a yes-no. He isn't getting 
your data.
    Mr. Scharfen. Yes, ma'am.
    Ms. Lofgren. I appreciate that answer.
    Let me ask you about data security. It seems like every day 
we open the paper and there is some story about--you know, I 
never had the idea that Government employees would have entire 
databases of, you know, VA and everything on laptops that then 
go missing.
    What steps are you taking to secure the integrity of the 
data that you have?
    Mr. Scharfen. I am going to make two points on that, ma'am.
    First of all, the E-Verify system is using an enterprise 
system service bus, which is a more modern approach to managing 
computer systems. And that enterprise service bus has more 
robust security features, computer security features, than 
earlier versions of the computer systems. And so the enterprise 
service bus has more firewalls and other protections that a 
modern computer system has. That is number one.
    Number two is that we have been doing routine privacy 
impact assessment studies. We have also been complying with the 
DHS computer security requirements and have been having reviews 
of the system consistently and periodically.
    And then, finally, we have a management--clearly, this is 
of concern to DHS and CIS, and we have made it a focus of 
management to ensure that the E-Verify data that has been 
provided by different employers during their queries is given 
all the protections and safeguards it deserves, both under the 
law and as a prudential matter of what we can do as managers.
    Ms. Lofgren. Let me ask you this. It is sort of a 
philosophical question. I think the point made by Congressman 
Johnson and Congresswoman Giffords is that USCIS's job is to 
deal with immigrants; you don't have jurisdiction over 
Americans. I mean, and that there may be an issue here of 
whether we really want to turn over to the immigration part of 
our Government the whole function of clearing hundreds of 
millions of American citizens.
    Do you have a thought on that?
    Mr. Scharfen. I do, ma'am. The E-Verify, as I said in my 
oral statement, ma'am, the E-Verify system is a partnership 
between the Social Security Administration and DHS, and so we 
are not doing this alone. We already are working with the 
Social Security Administration in partnership.
    And the system that we have now, if we were to redo that 
and somehow put the focus over to another agency, you would end 
up having to just reinvent that partnership again between the 
two agencies.
    And I think that the answer to those concerns, your 
previous question, is how we work with the Social Security 
Administration and what safeguards we have in place to ensure 
that that information is given the protections it deserves and 
must have under the law.
    Ms. Lofgren. Thank you very much.
    And my time is about to expire, so I will turn to Mr. King.
    Mr. King. Thank you, Madam Chair.
    In response to the remark that actually, Madam Chair, you 
made with regard to we don't know whether they are legal or not 
if they walk away from following up on clarifying their 
records, for myself I reflect back to when I was 16 years old 
and just started paying taxes and there was a mistake by Social 
Security in transposing two numbers in my Social Security 
number. I was livid and determined, and I cleaned up those 
records, and it took me several years. But it is a lot easier 
today, I would think, than it was then, because at least we 
have some electronics record and we can get some more immediate 
response rather than waiting for long answers from letter. But 
I would think that it is a duty and a responsibility of someone 
who is lawfully present in the United States and can legally 
work here to clean up their records.
    Is it true that either E-Verify is identifying people who 
are unlawfully seeking work in the United States, or, if there 
is a rejection, it identifies a record that needs to be 
corrected?
    Mr. Scharfen. I think, as a basic proposition, that is 
generally accurate, yes, sir.
    Mr. King. And I thank you for that.
    And then, as I look at these records, I know that we have 
had a conversation about linking your query to the database of 
naturalized citizens. And that brings another level of 
efficiency here that I don't think is reflected in this 
accuracy data that has been testified to today.
    And I don't want to ask you to go on record for the results 
of that, but I would just ask you, what do you anticipate will 
be--what do you think is going to happen once that data is 
brought into this, the efficiencies that you will give back to 
us when that is credible?
    Mr. Scharfen. Yes, sir, I think the two improvements that 
you are talking about are the ones that we made May 5th of this 
year. One is that we are including in the system a check of the 
CIS naturalization databases, as well as the real-time arrivals 
information from the port of entries. And so, the combination 
of those two new data sources that are now being included in 
the E-Verify system, we believe that that is going to reduce 
the .5 percent mismatch rate for eligible or authorized 
employees, that it will reduce it by half. So you will be going 
from one-half of 1 percent to one-quarter of 1 percent.
    Mr. King. If I might interject----
    Mr. Scharfen. If I could just add one--those are just all 
kind of percentages, but if I could just give you a real number 
there. Our data shows that, since May 5th, we have identified 
3,500 employees who were naturalized, in other words, are 
naturalized citizens. And they were identified through this new 
check.
    Mr. King. I thank you, Mr. Scharfen.
    And then with the discussion about Social Security being, 
by some opinions, more efficient than USCIS with regard to 
this--and I asked the question of Ms. Giffords, and I don't 
know that--I just want to ask you this.
    What is the distinction between E-Verify's database setting 
up a query--I mean, you don't house Social Security 
Administration data. That is not your database. So you send a 
query out to SSA, and it comes back and says verified or not. 
Then you send a query out to your records, and it says verified 
or not.
    Mr. Scharfen. Yes, sir.
    Mr. King. So what would be the distinction between the 
proposal made by Mr. Johnson and Ms. Giffords about setting up 
a Social Security system, that under the Social Security, to 
send a query to their database and then a query to your 
database, how would that function differently than it does 
today?
    Mr. Scharfen. I think that is a point, obviously, I agree 
with, is that if you are going to do away with E-Verify and 
come up with a new system, you are just going to have to 
reinvent E-Verify. You are going to have to have a partnership 
between the Social Security Administration and DHS/CIS to run 
this program. And I really think that the Congress was correct 
in initially authorizing this program. It was correct in its 
two instances of reauthorizing it. And it is the best available 
tool today to do employment eligibility verification, and it is 
one that we are dedicated and committed to making it better as 
we go forward.
    Mr. King. Mr. Scharfen, I think, in Mr. Shuler's testimony, 
he stated that DHS knows of not one case where a U.S. citizen 
was denied employment because of an error with the Basic Pilot 
Program. I want to know if you can verify that or if you can 
comment on that particular statement.
    Mr. Scharfen. Right. I think what Mr. Shuler was saying was 
that those individuals who have gone through to clarify, 
perhaps, a tentative nonconfirmation as a citizen, we have no 
reports that none of them were able to resolve that and be able 
to establish their eligibility.
    One point that I think you know well, sir, is that while 
that is ongoing, that person gets to continue in employment and 
that they are employed, and there is no right to fire that 
person until it has been resolved.
    Mr. King. And just briefly, just to conclude, the statement 
that there has been no one denied employment who was a U.S. 
citizen, doesn't it come back to the basis that, actually, in 
the final analysis, you are the measure itself against whether 
this--against which everything else is weighed, in that you 
make that verification and you run that out against Social 
Security Administration, your own database, and then you clean 
up the records? So if there is going to be a measure in this, 
you would have corrected that in the process of cleaning up the 
records. So, by definition then, zero would be the number. Is 
that correct?
    Mr. Scharfen. That is correct. We are dedicated to getting 
the right answer. And in fact, as you know, we've created a new 
call line where people can call directly to CIS to resolve 
these issues. And we are increasing that staff, and we are 
dedicated to doing this as quickly and as easily as we can.
    Ms. Lofgren. The gentleman's time has expired.
    Mr. King. Thank you, Madam Chair. And I yield back.
    Ms. Lofgren. I turn now to Mr. Conyers.
    Chairman Conyers. Thank you.
    You have been on the job a couple years.
    Mr. Scharfen. Yes, sir, I have.
    Chairman Conyers. And you have got 21 people trying to 
cover how many? What is this 250,000 or 66,000--66,000 
employers who have 250,000 work sites but maybe millions of 
employees. Am I missing something here?
    Mr. Scharfen. If I could just run through the numbers.
    Chairman Conyers. No, I am running through the numbers. Am 
I missing something here?
    Mr. Scharfen. In all respect, yes, sir, I believe you are. 
If I could run through the numbers really quickly.
    Chairman Conyers. No, that is not going to be necessary.
    How can you with a staff of 21 people even get to the front 
door of your own office, much less handle the challenge that 
you have been in for less than 2 years?
    Mr. Scharfen. The numbers that we have that are working on 
this program, for the program staff, sir, this is E-Verify and 
SAVE, there is 360 employees. For just the outreach staff 
alone, we have 16 employees. For the privacy staff alone, we 
have eight employees; five full time employees, three 
contractors. For the monitoring and compliance unit, sir, we 
have 28 located at headquarters alone. In the field, we have 30 
monitoring compliance in the regional office. That is going to 
grow in the next year to 135.
    So if you add all that up, it ends up being close to 500, 
sir.
    Chairman Conyers. Well, that takes care of everything. Then 
we can sleep more comfortably in our beds at night, now that I 
know that some day soon under a new Administration, there is 
going to be 500.
    Some employers use E-Verify to screen job applicants 
reported by 16 percent of long-term users, and then presumably 
either deny applicants an opportunity to work or postpone their 
starting date. In other words, they pre-screen them. And what 
about other employers who get prohibited adverse action--look, 
this is all set up to get the employers off the hook, and we 
are not getting them off the hook. We keep looking at some poor 
desperate guy that wants a job here, and we are worried about 
him and where he came from, but the employers have got the 
upper hand in here. And, guess what? Do you know how many 
people you ever refer over to the Department of Justice for 
prosecution, employers?
    Mr. Scharfen. We were just discussing that before the 
hearing, sir. And in fiscal year 2008, the cases referred to 
DOJ so far has been one case. In previous----
    Chairman Conyers. One case.
    Mr. Scharfen. Yes, sir. Excuse me. Then you have to also 
include though cases referred to ICE. There have been over 40 
cases referred to ICE at their request. Two cases have been 
identified by our new monitoring compliance team. The others 
were requested by ICE. And so if you add those up----
    Chairman Conyers. I can add. Those are single digits. I can 
add them up. You don't have to add them up for me.
    In other words, the employers are walking away from this 
huge system, and anybody that they consider an organizer or 
troublemaker or finds there's a title 7 violation or anything 
else, they are dead meat under this system.
    Mr. Scharfen. The system is based on automating an INI 
program that was already in existence. And I think that if you 
are going to have abusive employers who are going to violate 
the law, I think that they can probably do that even without E-
Verify.
    In fact, I think that the E-Verify adds us--gives us 
additional enforcement tools to deter and also to prosecute, in 
some cases, examples of unlawful conduct by employers, because 
you now have a database that you can analyze for employer 
misconduct. In fact, the monitoring and compliance----
    Chairman Conyers. You know what, if this wasn't so serious, 
I would think you are kidding me. You give me those puny 
numbers and tell me that this is strengthening you, that it 
would be--there would be even fewer employers prosecuted if you 
didn't have this system, and I am supposed to feel better about 
that. And then, next year, we are going to get--we may get up 
to 500.
    Mr. Scharfen. I think that the monitoring compliance units 
that we are creating, sir, we are looking forward to creating 
an analysis system that would end up looking for patterns that 
would indicate discrimination. And I think that is going to be 
a tool that is going to be useful to fight discrimination by 
employers.
    Chairman Conyers. Have you ever worked in a foreign affairs 
field?
    Mr. Scharfen. I used to be the chief counsel of the House 
International Relations Committee.
    Chairman Conyers. I know. And I think you ought to begin 
looking at that position again.
    Mr. Scharfen. Yes, sir. Thank you.
    Chairman Conyers. You are more than welcome.
    Ms. Lofgren. The Chairman's time has expired.
    And all time has expired for this witness.
    And we do thank you for your appearance here today, Mr. 
Scharfen. If we have additional questions, we will forward them 
to you and ask that you respond promptly.
    Mr. Scharfen. Thank you, ma'am.
    Thank you for the opportunity to testify. I appreciate it.
    Ms. Lofgren. We will now ask our third panel and final 
panel of distinguished witnesses to come forward.
    First, I am pleased to welcome Dr. Carolyn Shettle, who is 
the senior study director at Westat, with over 30 years of 
experience in research design, survey methodology, data 
analysis, report writing, sampling, and research management. 
During the past 10 years, she has led evaluations of the E-
Verify program and its precursor programs. Prior to her work at 
Westat, she worked at Temple University, the National Science 
Foundation, and the U.S. Department of Health and Human 
Services. She has a Ph.D. In sociology with a major in research 
methods and statistics from the University of Wisconsin, 
Madison.
    Our next witness is Tim Sparapani--if I mispronounced your 
name, pardon me--senior legislative counsel for the Washington 
Legislative Office of the American Civil Liberties Union. Mr. 
Sparapani focuses on protecting the right to privacy, defending 
the rights of immigrants, and shielding civil liberties in 
national security matters. His effort focuses on preventing 
violations and unnecessary intrusions into Americans' privacy 
by both Government and private organizations and individuals. 
Mr. Sparapani also monitors the effect of Federal, State, and 
local national security policy on civil liberties to ensure 
that Americans remain both safe and free.
    Next, I am pleased to welcome, Chris Williams, a Chicago 
attorney who is currently the executive director of the Working 
Hands Legal Clinic and has extensive experience in the areas of 
labor and employment law. Prior to practicing law, he worked 
for over a decade as director of organizing for Chicago area 
labor unions. He also served as director of the Chicago Workers 
Collaborative. Mr. Williams has worked extensively with worker 
centers on issues related to the abuse of Employment 
Eligibility Verification Systems and no-match letters.
    And, finally, our the last witness is Glenda Wooten-Ingram, 
who has worked in the hospitality field for over 20 years, the 
vast majority of which she has spent as a human resources 
director in the Washington, D.C., area. Ms. Ingram has been 
with Embassy Suites for the last 4 years as its director of 
human resources. She has been certified by the Society of Human 
Resource Management for over 9 years.
    As with our other panel, your full written statements will 
be made part of our record. We would ask that your testimony be 
about 5 minutes, so that we will have an opportunity to ask 
questions.
    And, Dr. Shettle, we will begin with you.

            TESTIMONY OF CAROLYN F. SHETTLE, Ph.D., 
                 SENIOR STUDY DIRECTOR, WESTAT

    Ms. Shettle. Madam Chairman and Members of the 
Subcommittee, I want to thank you for inviting me here today to 
talk about Westat's September 2007 evaluation report of E-
Verify that we've conducted under contract to USCIS, though I 
have heard so much today about our report. I am not sure I have 
a lot to add.
    Anyway, the focus of my remarks today are on the particular 
emphasis that this panel has, and I am going to talk about 
noncompliance, discrimination, and privacy. I will talk first 
about what we found at the time of this evaluation, which is 
some time ago, and then I will talk about observed and future 
trends.
    As far as employer noncompliance goes, we did find 
substantial noncompliance, and the findings for the most part 
were based on employer self-reports which we have evidence to 
believe are underreported noncompliance. There is substantial 
noncompliance. In terms of a particular example, I think you 
already mentioned, 22 percent of the employees suffer some kind 
of adverse action to job restriction, and we have other 
examples of pre-screening and reduction in pay, and so on.
    As far as discrimination goes, that is a complex issue that 
has been hotly debated since the beginning of employment 
verification. We did find evidence on both sides, and I think 
some of this has been quoted today.
    As far as the good news in terms of reducing 
discrimination, we found that 19 percent of the employers we 
asked said they were more willing now than they were prior to 
the program and 4 percent said that they were less willing to 
hire immigrants. And this leads to the conclusion that there is 
a net decrease in discrimination at the hiring stage because of 
the program.
    The bad news, though, which I think we've also been 
hearing, is that foreign born workers that are more likely to 
receive a tentative nonconfirmation prior to being work 
authorized. And this particular error rate has been quoted a 
lot today.
    For those who were work-authorized, and only for them, what 
percentage go through a tentative nonconfirmation process 
before receiving a final confirmation as work-authorized; the 
error rates for all work-authorized employees would be higher. 
We know it spirals downward.
    It is very difficult to estimate that, though, because for 
the ones that don't finish up the system, we don't know what 
percent are work-authorized and what percent are not. As you 
have heard, the rate is particularly high among naturalized 
citizens at around 10 percent compared to U.S. born folks where 
it is one-tenth of a percent, or one out of 1,000, and 
noncitizens are in between.
    Even if employers were completely compliant, these 
discrepancies and error rates would be, de facto 
discrimination, maybe not by employer intent, but because 
employees have to go through additional hurdles to get their 
authorization verified.
    We have seen over time a number of improvements in 
noncompliance and in terms of the error rate.
    I skipped over the privacy issue, which we don't have so 
much of in terms of results. We did question the lack of 
security in the registration process, as you noted. And we also 
mentioned that employers do not consistently convey information 
in a private setting. And one example of that was employees who 
noted that their employer just posted a list of people who they 
said were not work-authorized.
    As I said, there have been improvements. Some of the 
improvements can be attributable to changes in worker and 
employer characteristics as we go from a small program in five 
States with high immigration populations to the full volunteer 
program we have today. But there are also improvements that we 
believe are attributable to program changes, and we just heard 
from DHS about those.
    In the future, we expect that there will be some more 
changes due to programmatic improvements. What we don't know is 
what will be the impact if we go to a mandatory program on the 
whole system, in particular employer compliance, since it is 
reasonable to believe that pulling in people involuntarily will 
create a worse problem than we have now.
    Ms. Lofgren. If you could wrap up, please.
    Ms. Shettle. Yes, in sum, we do see problems that U.S. 
citizens and noncitizens with work authorizations are affected 
negatively. We've seen improvements over time, in part because 
of program changes that are ongoing. And the biggest question 
is the question of mandatory. Things may change. We can't 
predict what is going to happen there.
    And, Madam Chair, I would like to thank you and the 
Subcommittee for listening to me. And if people want more 
information about this report or prior reports, I refer you to 
the USCIS Web site that has the report.
    Thank you.
    [The prepared statement of Ms. Shettle follows:]

                Prepared Statement of Carolyn F. Shettle

















    Ms. Lofgren. Thank you very much.
    Mr. Sparapani.

  TESTIMONY OF TIMOTHY SPARAPANI, SENIOR LEGISLATIVE COUNSEL, 
 WASHINGTON LEGISLATIVE OFFICE, AMERICAN CIVIL LIBERTIES UNION

    Mr. Sparapani. Imagine the horror of a constituent who is 
unable to start any new job due to Government bungling and 
bureaucracy. This horror show would surely confront thousands 
of workers upon implementation of an E-Verify type system. 
Denied their right to work lawfully, these workers would 
quickly fall into economic distress.
    Chairwoman Lofgren, Chairman Conyers, and Ranking Member 
King, the ACLU urges Congress to refuse to mandate a system 
that would create a new ``no work list'' like the infamous ``no 
fly list'' populated by thousands of Americans wrongly blocked 
from working by their own Government. The costs associated with 
mandatory electronic screening cannot be overstated, and any 
benefits are speculative at best.
    Proponents tout electronic screening as a technological 
cure all for beleaguered American workers who fear for their 
jobs and wages. However, mandatory electronic screening would 
impose unacceptable burdens on America's workers and businesses 
without resolving the immigration dilemma, because it cannot 
prevent the hiring of undocumented workers.
    I will focus on two reasons to oppose electronic screening. 
One, mandatory screening will invade American workers' privacy, 
vastly increasing, not decreasing, the incidents of identity 
theft and document fraud by turning identities into black 
market commodities. And, two, mandatory screening will entangle 
American workers in a massive knot of Government red tape, both 
to get hired and resolve data errors. And that is all because 
of the poor data quality we've heard so much about this morning 
and the problems with administrative judicial redress, which we 
haven't yet talked about.
    Mandating electronic screening will endanger law-abiding 
Americans' privacy because it makes a work-eligible identity a 
highly valuable commodity and creates a black market for those 
identities. Requiring Government permission to work will leave 
some desperate undocumented immigrants and those smuggling and 
illegally employing them to steal work-eligible American 
identities. In short, E-Verify will increase, not decrease, 
identity theft.
    Similarly, Government databases will be targeted by 
identity thieves because they contain workers' identity data. 
No database can be entirely secure from hackers. And the 
Government's information security track record is poor at best. 
This privacy threat is wholly unnecessary, because E-Verify and 
similar systems are so easily evaded by ineligible workers 
presenting fake documents. Neither employers nor Government 
databases would detect this fraud.
    Congress should ask, why endanger Americans' privacy if it 
will not prevent the hiring of undocumented immigrants?
    The ACLU also opposes electronic screening unless the 
Government is forced to rapidly correct data errors and 
compensate workers its errors injure. The ACLU again foresees a 
new ``no work list'' consisting of those eligible employees who 
cannot work because of data errors and Government bureaucracy.
    Congress should not mandate pre-screening, but it should 
require SSA and DHS to systematically review files to eliminate 
errors. Only after systematically improving data should 
Congress consider mandating pre-screening eligibility.
    Workers injured by data errors will need quick, permanent 
resolutions so they do not become presumptively unemployable.
    Any legislation must allow workers to easily access and 
correct erroneous Government data. SSA and DHS must hire 
sufficient staff to handle the millions of additional worker 
inquiries they will surely receive.
    Congress must also provide fair administrative and judicial 
procedures to resolve errors promptly to get workers back to 
work. None of the pending proposals, unfortunately, promise 
real relief.
    Any worker challenging erroneous Government data deserves a 
presumption of work eligibility. The Government should bear the 
legal burden to demonstrate a worker's ineligibility rather 
than forcing the worker to prove his or her eligibility. After 
all, no undocumented worker would fight two Federal agencies 
through administrative and judicial procedures for fear of 
being caught and deported. It is just simply illogical to 
imagine that kind of scenario. Therefore, administrative law 
judges should be empowered to order records correction and 
reimbursement of workers costs plus lost wages and interests. 
The Government should bear costs to minimize workers' injury. 
We recommend a strict liability standard for Government errors 
to encourage the Government to improve its data quality.
    Finally, if the administrative process fails, then workers 
need court access. Because suing is expensive, the Government 
must bear costs for any judicial process, and workers should be 
reimbursed for lost wages and opportunities plus interest.
    In conclusion, failure to mandate real administrative and 
judicial redress will surely result in a list of employees who 
are lawfully eligible to work but whom employers are unable 
lawfully to employ. This black list will truly be a ``no work 
list'' that will endanger American workers' privacy and their 
right to work. Thank you.
    [The prepared statement of Mr. Sparapani follows:]

                Prepared Statement of Timothy Sparapani























    Ms. Lofgren. Thank you very much.
    Mr. Williams.

   TESTIMONY OF CHRISTOPHER J. WILLIAMS, ESQUIRE, DIRECTOR, 
                   WORKING HANDS LEGAL CLINIC

    Mr. Williams. Good morning. I want to thank you, Madam 
Chairwoman, and the Subcommittee for the opportunity to speak 
today.
    As mentioned, I am an attorney in Chicago. I work with a 
nonprofit organization that assists low-wage workers 
predominantly in the temporary staffing industry. And I think 
the perspective I can bring today is how the E-Verify program 
and other employment eligibility verification systems are 
affecting people on the ground. And I submitted written 
testimony, so I won't repeat that here.
    But we've heard a lot of numbers thrown around about 
accuracy rates and so forth, but I think there is something 
that has been given a little bit short shrift, which is the 
role of employers in this system. Because employers are a very 
important part of the verification system. They play a role, 
and then those numbers have to be counted in. You heard a claim 
that there was a 0.5 percent error rate. You heard a claim that 
not one person has been denied employment because of the E-
Verify system, and that is just not accurate.
    First of all, the system is based on the Social Security 
Administration database which, by all accounts, has 17 million 
or more errors. And I personally have a little history with 
that. I just received my newborn daughter's Social Security 
card, and my last name is her middle name, and it was spelled 
with three Ls, and my name is spelled Williams with two Ls. So 
it is very common to have an error in the Social Security 
database.
    You couple that with employers not--being resistant to 
participating in these employment verification system programs. 
Right now it is voluntary. With all of the errors and problems 
we've heard about, these are employers who are voluntarily 
participating in this program. You mix that--you roll this out 
to be mandatory, you mix that with employers, small employers 
who do not want to participate, small employers who do not want 
to play this role, who do not have the resources to access the 
proper legal advice, you are going to have a disaster.
    And I do know somebody who has been denied employment. His 
name was Fernando Tinoco. He was a client of mine. He went, and 
he applied for a job at a Chicago poultry plant. And he came 
back a tentative nonconfirmation. He was given the information. 
He went to Social Security Administration. He got the necessary 
documents to show he was eligible to work. The company didn't 
want to take him; it was too risky.
    Then I know another person, Abel Pacheco. He lost his job, 
went out and applied at eight different locations. Finally, he 
applied at the eighth location, was told he got a tentative 
nonconfirmation. He never heard back from the first seven. Now, 
did they all check his status? Did they all check E-Verify, and 
did they determine that he was not eligible to work? Did they 
pre-screen him? This is a problem that is not to be reported. 
With all the problems we heard about in the Westat report, this 
is a problem we are not going to hear about in any report. This 
is a serious problem where employers have the ability to check 
and pre-screen. We know this is happening, even from self-
reporting, that the rate is high. Without self-reporting, we 
don't know how high the rate is. But employers who are 
resistant to participating in a mandatory program anyway and 
who are risk-averse are just going to make the decision, why 
bother? Just don't hire the person. And that is a problem.
    Somebody mentioned earlier the Social Security no-match 
letters. And I realize that is a different thing. E-Verify is 
something done at the time of hire. Social Security no-match 
letters come out and when somebody is employed and working. But 
they both depend on the same flawed database. And I have dealt 
with literally thousands of workers who have been wrongfully 
terminated by employers, sometimes quite honestly innocently by 
employers who receive a no-match letter. And there are 
safeguards in place with the no-match letter. The no-match 
letter itself says, ``this is not an indication of someone's 
immigration status.'' The employer just makes a determination. 
They see on the news. They read in the paper, employers are 
getting arrested. It is easier just to get rid of the employees 
than to deal with the mess.
    Some of them find their way to me or other organizations 
like ours, and they get assistance, but most of them do not. 
Some employers, I have sat with them, and one employer fired 30 
workers, all Hispanic. He told me, well, I got one of those no-
match letters. So under Illinois law, we requested a copy of 
the no-match letter. Well, you know, we don't really have them. 
But there are other ways to check people's Social Security 
numbers.
    Well, what are those other ways of checking those Social 
Security numbers? Did he use the E-Verify program? What is 
USCIS doing to make sure that he did not pre-screen, he did not 
check current employees? What are they doing to make sure that 
these employees are not being victimized by employers who are 
abusing the system? Do they even know? Is there a way to know? 
And I think the answer to that question is, no, there is really 
not a way to know.
    The system should not be rolled out. It should not be made 
mandatory until the databases that it depends on are accurate. 
Thank you very much.
    [The prepared statement of Mr. Williams follows:]

             Prepared Statement of Christopher J. Williams

    Good morning. My name is Chris Williams. I am the Executive 
Director of the Working Hands Legal Clinic in Chicago. Our Legal Clinic 
assists vulnerable, low wage workers confronting the most abusive and 
exploitative practices in the workplace, everything from stolen wages 
to discrimination. First, let me thank you for your invitation to speak 
before this distinguished committee.
    I am here today to express our organizations concern about 
proposals to expand the use of Electronic Employment Verification 
Systems (EEVS), such as the E-Verify program. The E-Verify program, 
currently a voluntary program, requires participating employers to 
verify whether newly-hired employees are eligible to work in the United 
States through the use of an internet-based program. When a 
participating employer enters a worker's basic identifying data into 
the E-Verify system, the data is checked against databases maintained 
by the Social Security Administration (``SSA'') and the Department of 
Homeland Security (``DHS''). The SSA database is supposed to tell 
whether a particular worker is a U.S. citizen or work-authorized 
immigrant. If a worker is not a citizen and does not appear on the SSA 
database, the DHS database is supposed to tell whether the worker is 
authorized to work in the United States. The E-Verify program is being 
touted as an effective means of eliminating employment by undocumented 
immigrants but too little attention is being paid to the negative 
impact the program is having on U.S. citizens and work-authorized non-
citizens, a problem that will only be exacerbated by expansion of this 
or other EEVS programs.
    The E-Verify program, formerly called ``Basic Pilot'', has been 
plagued by serious problems since it was first introduced in 1997. 
First, this EEVS program relies on government databases that have 
unacceptably high error rates, misidentifying work-authorized workers 
as not employment-eligible. Specifically, a December 2006 report by the 
Office of the Inspector General for the SSA estimated that 17.8 million 
of records contained in the SSA database, the primary source of 
information for the E-Verify program, contain discrepancies related to 
name, date of birth, or citizenship status.\1\ Such discrepancies 
result in a ``tentative non-confirmation'' of eligibility for 
employment under the E-Verify program. According to testimony from the 
GAO to a 2008 subcommittee of the House Ways & Means Committee, the E-
Verify program was not able to automatically verify the work 
authorization of approximately 8 percent of workers whose information 
is submitted to E-Verify. This is the same error rate that was found in 
the Westat report commissioned by the Department of Homeland Security 
and released in September 2007.\2\ The worker then becomes responsible 
for resolving the issue with Social Security or with DHS. If the worker 
does not resolve the problem quickly, he or she faces termination. When 
the E-Verify program's databases fail, U.S. citizens and work-eligible 
immigrants pay the price as they are put on what essentially amounts to 
a ``no-work list.''
---------------------------------------------------------------------------
    \1\ CONGRESSIONAL RESPONSE REPORT: ACCURACY OF THE SOCIAL SECURITY 
ADMINISTRATION'S NUMIDENT FILE (Office of the Inspector General, Social 
Security Administration, Dec. 2006).
    \2\ FINDINGS OF THE WEB-BASED BASIC PILOT EVALUATION (Westat, Sept. 
2007).
---------------------------------------------------------------------------
    Employer misuse or non-compliance with the E-Verify program rules 
is a second and, in my view, more insidious problem. The 2007 Westat 
evaluation of Basic Pilot/E-Verify found that the rate of employer 
noncompliance with the program rules is ``substantial'' and 
``diminishes the effectiveness of safeguards designed to protect the 
rights of work-authorized employees who obtain erroneous tentative non-
confirmations.'' \3\ The report found that ``the rate of employer 
noncompliance [with the program rules] is still substantial.'' 
Specifically, employers engaged in prohibited employment practices, 
including: (1) pre-employment screening; (2) adverse employment action 
based on tentative non-confirmation notices; and (3) failure to inform 
workers of their rights under the program. And the effect is particular 
hard on work-authorized foreign-born workers, since, as the Westat 
report points out, these workers are 30 times more likely than U.S.-
born to receive erroneous tentative non-confirmations (nearly 1 in 10) 
initially receive tentative non-confirmations).\4\
---------------------------------------------------------------------------
    \3\ Id. at note 3, at xxi.
    \4\ Id. at 71-77.
---------------------------------------------------------------------------
    I believe the case of Mr. Fernando Tinoco, one of my clients, is 
illustrative of this problem. Mr. Tinoco is an immigrant from Mexico 
and became a citizen of the United States in 1989. He applied for a job 
with an employer in Chicago that used the E-Verify program. After 
submitting his information through the EEVS program, the employer 
received a tentative non-confirmation notice. Mr. Tinoco challenged the 
tentative non-confirmation and was required to go to the SSA himself to 
clear the matter up. But even after SSA acknowledged the error and 
provided Mr. Tinoco with the necessary documentation, the employer 
refused to employ Mr. Tinoco.
    In Mr. Tinoco's case, we were eventually able to resolve the issue 
because his employer had informed him of the tentative non-confirmation 
from the E-Verify program and he was able to successfully challenge the 
determination. But, according to the Westat report, 47 percent of 
employers, nearly half, had pre-screened workers through E-Verify 
system and, unfortunately, there is no way to account for how many 
employers, when faced with a tentative non-confirmation, simply choose 
not to hire the person.\5\ There is simply no way for a potential 
employee to know this and no effective safeguards to prevent this 
practice.
---------------------------------------------------------------------------
    \5\ Id. at 71.
---------------------------------------------------------------------------
    My experience with employers' reaction to ``No-Match'' letters from 
the SSA tells me that this type of problem is already underreported and 
will only be exacerbated by expansion of the E-Verify or other EEVS 
program. While SSA No-Match letters are different than the E-Verify 
program, both rely on the same flawed SSA database. (A No-Match letter 
is generated by SSA when a worker's identifying information remitted to 
the Social Security Administration does not match the information 
contained in the SSA database and, if not deliverable to the 
individual, is sent to the employer.)
    Our legal clinic has had to respond to firings of literally 
thousands of workers in and around Chicago over the past two years 
based on misapplication or misunderstanding of the E-Verify program 
and/or SSA No-Match letters. One employer who fired 30 Hispanic 
employees initially told me that the terminations were based on receipt 
of a SSA No-Match letter, but later, after the employees had requested 
copies of the letters under Illinois law, admitted there were no such 
letters, stating instead that there were other ways to check the social 
security numbers of his employees. None of the affected employees was 
told the basis of the termination, much less given the opportunity to 
challenge any tentative non-confirmation. Another small employer of 50 
homecare health workers fired fully half of her employees. When 
challenged on the basis of the terminations, she told me ``Well, I've 
been reading the newspaper and I thought that is what I was supposed to 
do. I thought I had to get rid of anybody who might be working 
illegally.''
    There are over six million employers in the U.S., many of which are 
small, have no human resource staff and limited resources to get access 
to legally accurate information and even less time to become compliant 
with a mandatory EEV system. Many employers will be ill-equipped to be 
the frontline of immigration enforcement and by expanding the use of an 
EEVS system, the law will be applied in an uneven and, too often, 
unfair way. Coupled with the inaccuracies in the databases underlying 
the EEV system, the inevitable result will be that an unacceptably high 
number of legally authorized workers will lose their livelihoods. 
Simply put, employers should not be charged with the responsibility of 
enforcing immigration law through these EEV systems. Most do not want 
to expend the time and resources to do so, and have neither the 
expertise nor tools to do so correctly or legally.

    Ms. Lofgren. Thank you.
    And now we turn to our final witness.
    Ms. Ingram, we would like to hear from you.

TESTIMONY OF GLENDA WOOTEN-INGRAM, DIRECTOR OF HUMAN RESOURCES, 
                EMBASSY SUITES CONVENTION CENTER

    Ms. Ingram. Well, it is afternoon.
    I have been in the human resources department for almost 20 
years, and I have also been using this system since it first 
came out. And for me, as an employer, it helped me because I am 
not an expert in looking at the documents. And we all look at 
the documents, and we can say they are legal or whether they 
are not, and this system it does help.
    But the one thing that, from the employer and for the 
company that I have worked for, we have a system in place that 
you can't pre-screen. You can't tell someone, show me your 
documents before you interview them; show me your documents 
before I make an offer to you. That process is not done until 
after we sit down, we've interviewed the candidate, we verified 
their employment, they have gone through our background drug 
test, et cetera, and we make an offer.
    And once they come in, they get their new hire paper, and 
that is part of their new hire paperwork. The new hire 
paperwork has the I-9 form attached, and it asks them--we don't 
tell them what document to choose, they have their choice from 
A, B, C, whichever document they choose. And then, once they 
fill the form out, then we put it into our Basic Pilot, or now 
known as E-Verify, system, and we wait for whether there is 
going to be a confirmation or a nonconfirmation. Those 
documents are kept in a file, confidentially, where no one can 
get access to them unless they are in the human resource 
department.
    If we get a nonconfirmation for a--we call them team 
members instead of employees--we basically bring that 
individual into the office, into the privacy of our office, and 
we sit down with them, and we explain it to them: This is what 
we received. Here's what you need to do. You have a choice, you 
can make a phone call, or you can go down. We read it to them. 
We tell them they have 8 days. They can still continue to work. 
This does not affect--they don't have to be suspended pending 
further investigation or anything. They continue to work. Once 
they get the document, we go back into the system and confirm, 
and then that is fine.
    We have had some team members that have chose not to 
contest it, and so they leave. But we still encourage them, you 
know, if you feel that your documents are correct, please make 
the phone call. If it comes back that we still can't get a 
confirmation and we have to do a termination, we don't say, you 
can't come back here. We say, once you get your files together, 
your documents together, you are more than welcome to come back 
and reapply for the job. And that happens to every single 
person that comes in, after they fill out--they go through that 
process with us.
    . So I am confident for the company that I work for and my 
colleagues that we do follow those procedures. And every year, 
we are audited by our own company to go into our I-9 files to 
make sure. And when you are printing that data off, it has a 
date. So you are going to look at the date to say that you 
couldn't have pre-screened because you have the date that the 
person actually hired; you have your PAF that shows the date 
that you hired the person; and you have the date the 
confirmation was done. But we are audited by our company as 
well to make sure that we are in compliance.
    I think it is a great system to work with. And it is great, 
and I think that that is another tool to help you to ensure 
that you are in compliance.
    Thank you.
    [The prepared statement of Ms. Ingram follows:]

               Prepared Statement of Glenda Wooten-Ingram

    Dear Distinguished Members of Congress, I am Glenda Ingram, 
Director of Human Resources for the Embassy Suites Convention Center. 
Thank you for this opportunity to come before you today to speak of my 
experiences with the E-Verify program. As a Hotel Director of Human 
Resources in the Washington, DC area for more than twenty years with 
the last four years at the Embassy Suites Convention Center I have seen 
the benefits and the need for this program.
    Since the late 1990's I have been working with E-Verify, then a 
pilot program, it is very easy to use and relieves many Human Resources 
Departments and Companies of the burden of proving a potential new 
hire's eligibility to work in the United States. In fact, during the 
interview process we can not ask for proof of eligibility to work in 
the United States. Using E-Verify helps the employer to verify that a 
new hire's documents are in order and keeps the employer in compliance 
with the laws.
    E-Verify provides documents to the employer to be used when an 
employer receives a non-confirmation notice regarding a new hire. The 
new hires document is stored in the system ready for the employer to 
print and present to the Social Security Administration and Department 
of Homeland Security upon request. We review this document with the new 
hire for them to make a decision to contest or not to contest the 
validity of the information.
    In August 2005 when we were opening the Embassy Suites we hired 175 
new employees using the E-Verify program. During the hiring process we 
posted notice and verbally told each potential new hire that we 
utilized the E-Verify program. I firmly believe that this helped us to 
eliminate hiring applicants who did not have the legal paperwork 
required to work for the hotel.
    Currently this notice is posted in the Human Resources Department 
for all employees and applicants to read and ask questions. This 
deteriorates applicants from applying for positions knowing their 
paperwork is not legal. Using this procedure has saved our company a 
lot of money in time verifying information on the application, 
verifying past employment (which can sometimes take days), on drug 
tests, training and when found out, re-advertising the position.
    Illegal paperwork is usually not found out until after they have 
been hired and completed the I-9 form. The E-Verify process takes less 
than 5 minutes to input and receive a confirmation or non-confirmation. 
If a non-confirmation is returned we bring the new employee into the 
private office, inform them of the results, explain the procedures, 
give them the opportunity to contact the authorities and rectify the 
paperwork. We ensure them that they are not being terminated and they 
can continue to work while working on the solution.
    Once they return with the proper paperwork, we re-enter it into the 
system and in most cases they are confirmed. Many of the problems we 
encounter are data entry errors such as misspelled names, incorrect 
date of birth or social security numbers. This system does not 
discriminate against anyone since every new hire must provide proof 
they can work in the United States, complete an I-9 form and entered 
into E-Verifying.
    In closing, I believe that in my 10 or more years of using E-Verify 
that it is an invaluable business tool; the cost is free; is easy to 
teach (including President Bush); is very user friendly and the support 
system is very helpful.
    Beyond the most obvious reasons mentioned above I firmly believe 
that E-Verify has prevented us from hiring illegal's and staying in 
compliance with the law. This is a program all Companies should use.
    Thank you for your time and this opportunity.

    Ms. Lofgren. Thank you very much.
    Now is the time we will have a chance to ask a few 
questions before we conclude, and I will begin.
    One of the things that struck me, we are all trying to get 
our heads around this subject and making sure it is right. But 
if you are an immigrant or a naturalized citizen, there's going 
to be records with pictures in DHS. But if you come in and you 
say you are Jane Smith and an American citizen, and you have 
got the Social Security number, and you stole that I D from the 
real Jane Smith, I don't see how the bills before us really 
uncover that fact.
    Can you comment on it?
    Mr. Sparapani. They don't, and they can't. And that is part 
of the problem with not only E-Verify but all the other pending 
legislative proposals. Despite the fact that this program 
concept has been around for 30 years, really since 1978, we 
really haven't been able to resolve this underlying problem of 
document fraud. And it is going to bedevil this program.
    Ms. Lofgren. There is no database of every American with a 
picture or biometrics.
    Mr. Sparapani. And I say thank God for that.
    Ms. Lofgren. I am not arguing yea or nay. I am just noting 
that fact.
    Mr. Sparapani. And that is exactly right.
    Ms. Lofgren. Let me ask, in terms of the one suggestion I 
think that Mr. Johnson and Gifford's bill is suggesting as a 
potential remedy for that is to use something like the Clear 
Path System that does collect biometrics but also has an ID 
fraud component to it. Do you think that would advance that 
effort? Whoever wants to answer.
    Mr. Sparapani. I don't. And there are lots of reasons for 
that. One, every time we put private information into even 
private hands in this case, we run the risk that that data is 
going to be compromised. And, again, there is no database which 
has been proven to be secure. The hackers are always at least 
one step, usually many steps, ahead of the best information-
security protocols, and that is because they have an economic 
incentive to breach them. Therefore, we can always expect that 
data is going to be compromised, that people's identities are 
going to be stolen. So we think that this is sort of a 
misdirection to go down, to try to focus on identity as the key 
to doing immigration enforcement. I think it leads you down a 
series of paths which sound promising but when they actually 
get to implementation are very difficult to actually pull off, 
and actually provide a weakness that has never been overcome 
conceptually.
    Ms. Lofgren. Ms. Shettle, do you want to comment?
    Ms. Shettle. I don't really have a lot to comment on.
    Ms. Lofgren. Okay, that is fine.
    It seems to me that we want to have a system that is 
enforceable, that works, where only those who are legally 
permitted to work are working. But we don't want to have the 
adverse consequences. We don't want Americans to be denied jobs 
or other people who are legally permitted to work to be denied 
jobs. We certainly don't want whatever system that we create to 
be used for improper purposes such as discriminatory purposes 
or the like.
    I just was remembering, if the stakes are very high for an 
employer, they are going to fire people to protect themselves. 
I remember, we had Swift in here last year, and they sort of 
had the worst of both worlds. They were first charged with 
discrimination because they were looking at Latino employees, 
which they shouldn't have done. So they stopped doing that. And 
then they had employees that weren't lawfully permitted to 
work, and they lost $40 million after the enforcement action. 
So which way do you do?
    We want to have a system that works well. Do you see any of 
these bills before us--I don't know if you have had a chance to 
study all of them--that might avoid the adverse consequences of 
either use for labor or discrimination, but also allow 
employers to have confidence that they are doing the right 
thing?
    Mr. Williams. The one thing I would say, and this point was 
made earlier, is I think that there is a flaw in the idea that 
you can just deal with one aspect. There has to be 
comprehensive reform.
    Ms. Lofgren. I agree with that.
    Mr. Williams. And so you are going to end up in these 
problems, because there is a lot of pressure on employers and 
employees in terms of getting work.
    What I see, one of the things we see in Illinois is the 
increasing use of temporary staffing agencies as a way of kind 
of laundering people through.
    Ms. Lofgren. So the liability isn't to the employer.
    Mr. Williams. Moving liability away, along with all other 
sorts of labor rights and standards that go along with it.
    Just as my colleague said, the hackers are always one step 
ahead. There is always going to be a way to get around the 
system, and they are going to move around the system.
    And so I think what we are trying to do is we are trying to 
fix one aspect of this without fixing the overall problem. You 
know, employers need the workers, and they are going to find a 
way to find them.
    Ms. Lofgren. Before turning to Mr. King, I will just note 
that I think, Mr. Sparapani, the burden-of-proof idea I find 
intriguing because I think you are right, Americans should have 
a right--I mean, we have a right to go support our families. 
And I think your observation is probably correct. If there is a 
contested thing, I mean, people who are here without their 
documents tend to want to go underground. They don't want to be 
found. It is unlikely, I would guess, that they are going to 
walk into court and contest the finding. Instead, they are 
going to high tail it and try to find some other job. So that 
is an intriguing idea.
    I turn now to Mr. King.
    Mr. King. Thank you, Madam Chairman.
    You know, as I sit here and listen, a few thoughts cross my 
mind. And one of them is that for every single illegal person 
working in the United States of America, there is a 
corresponding disenfranchised American somewhere either looking 
for a job or earning less wages and benefits than they would 
otherwise, because the law of supply and demand certainly 
directs the value of labor and benefits.
    And so we are here wallowing around and looking for some 
kind of guilt about maybe disenfranchising a single person when 
we know that for every illegal that slips through the system, 
there is at least one corresponding disenfranchised America or 
legal worker in the United States who is here lawfully and can 
work here lawfully.
    Another point that I would give is that this self-imposed 
guilt about profiling is national idiocy. It has always been an 
important part of law enforcement. And if you put out the 
identification of a person who has committed a crime in the 
neighborhood and you can't use those characteristics to 
identify that person, we've opened ourselves up for those 
crimes to be committed over and over again.
    No, I don't think we should go out and discriminate against 
people based upon their race or their ethnicity or those 
outward appearances. I think you ought to have a right to work 
in this country if you are legal. But we can't say to the 
American people, you can't be prudent. You cannot profile, you 
cannot stereotype someone. That is something that has been--
that message gets sent constantly, and I think we need to be 
smart about what we do.
    And with regard to the concern about the previous 
testimony, the Chairman's remarks about, well, the 40 
prosecutions referred through ICE last year of employers that 
abuse E-Verify, one so far this year, that is 41. I think I can 
fix just about all of those, and I would say this: Let's 
legalize the use of E-Verify for employers so that if a job 
applicant presents their INI and information, it is implicit 
that they are asking you and giving you consent to go out and 
use E-Verify. If they are willing to give you the data on I-9, 
why aren't they willing to accept the data that comes back on 
E-Verify? We can solve a lot of these problems that way. It 
would be face to face up front. When I hire employees, I look 
them in their eye. I look at their drivers license. I look at 
their data, and I ask them questions, because they are the 
people that I am going to entrust the profitability of my 
company in.
    And so I think that is the responsible thing. I presume the 
employer is responsible, not unethical, and I think we can 
operate with that presumption.
    So then, Dr. Shettle, I wanted to ask this question to you. 
What percent of illegals are erroneously approved by E-Verify? 
That is a subject that I don't think has been addressed today. 
Do we know the answer to that?
    Ms. Shettle. We don't have a good estimate of that. The 
problem is that there is no way for us easily to say who is and 
who isn't work-authorized beyond what the system comes out 
with, which is why we are using this error rate based just on 
those found work-authorized. We are hoping to look a little 
more closely at this in our next evaluation where we are doing 
many more interviews with employees who received tentative 
nonconfirmations regardless of whether or not they were 
resolved.
    Mr. King. Let me ask, Would they fit in two categories, 
those approved erroneously by E-Verify? And one category we 
know about would be those who presented false documents that 
belonged to a person who was legally working in the United 
States. We know that that exists out there. We don't know that 
number, but it could be huge, and we think it is. And then 
another category perhaps we haven't talked about, could that be 
those who have--who would not be lawful to work in the United 
States who have somehow created a database that identifies 
them? Do we know anything about that particular category?
    Ms. Shettle. That----
    Mr. King. Let's just say, are you aware of any creation of 
data that would support someone's employment who was illegal 
that might be unique to them? For example, a digital photograph 
on a green card of someone who has circumvented the system and 
gotten into the database that could then 1 day become a 
citizen, get a passport, because they have created the 
foundation for their false identity.
    Ms. Shettle. I don't have an estimate of how frequently 
that happens. But we definitely know that some people not in 
the country legally do go get a drivers license using false 
breeder documents, which are documents that are much less 
reliable, like a birth certificate where you don't have a 
picture and so on. So, yes, definitely that can happen. How 
often it happens, I couldn't tell you.
    Mr. King. Thank you.
    Ms. Ingram, I want to especially thank you for your 
testimony. I know when you took this job on, you surely didn't 
expect to be sitting before Congress testifying, and I 
understand that, and I appreciate that.
    But the question that I have to ask you is, you mentioned 
that your company audits your attempts to use E-Verify. And is 
there a corresponding verification that records each of your 
attempts on the database of E-Verify that can be used to 
validate your company's audit to make sure that you are not 
using E-Verify until there is a legitimate job offer?
    Ms. Ingram. Yes, we have our own forms, and then the form 
that is printed from E-Verify to confirm or nonconfirm. We keep 
all the documents that we have attached to the I-9 form with 
any notes that we may have that we contacted this person, we 
talked to them, they came back, or whatever information we've 
had with the team member.
    Mr. King. And E-Verify has that data, too?
    Ms. Ingram. Yes.
    Mr. King. Thank you very much.
    I yield back.
    Ms. Lofgren. The gentleman's time has expired.
    We have been called to the floor for votes, but before we 
do, we want to turn to Chairman Conyers for any questions.
    And also, I don't know if, Mr. Conyers, you weren't here 
when we did opening statements. If you wanted to do an opening 
statement, you are welcome to do that as well.
    Chairman Conyers. Well, thank you very much. I think this 
has been a very important hearing.
    Let me ask you about verification. Should we make it 
mandatory, do you think, Ms. Ingram? Or are you ready to leave 
it optional?
    Ms. Ingram. I think it is a good option for me. In our 
company, everyone uses, all our properties use E-Verify. So, 
yeah, I do. That is my belief. I am not speaking on behalf of 
my company, but I believe that it is a good system to use.
    Chairman Conyers. Mr. Williams, what do you think?
    Mr. Williams. Well, I applaud Ms. Ingram's company for 
having so many safety checks in place. I know that is not the 
standard, and I know if you roll it out past the voluntary use 
right now, you will have employers even more resistant.
    And one little side note. I apologize if I wasn't clear. 
The people I was talking about, Mr. Tinoco, Mr. Pacheco, are 
legally authorized to work, are as American as Ms. Hong and my 
daughter is.
    Chairman Conyers. Dr. Shettle, where do you come down on 
the mandatory part of this discussion?
    Ms. Shettle. As an evaluator, I feel that this is not 
something that I should be giving an opinion. As documented in 
our report, there are advantages and disadvantages. And I think 
that the trade-off decision is yours.
    Chairman Conyers. Mr. ACLU.
    Mr. Sparapani. The consequences of doing mandatory 
screening are going to be extraordinary. And when we design big 
Government databases and systems that are going to apply to 
every worker in America, we have to write the law in such a way 
as to think about that odd case. We have to think about those 
extraordinary individuals whose data doesn't work, because 
those are the weaknesses that will be exposed.
    When you take a system like this nationwide for every 
worker, it's going to be a huge set of problems, and Congress 
has to have that squarely in mind before it does anything at 
all.
    Chairman Conyers. Especially if you include everybody that 
works in America. I don't need a calculator to add 163 million 
and 12 million.
    And so I am working on the Steve King theory. Well, he has 
got two theories here that he has left us to concern ourselves 
with. One is that every one of the 12 million people who have 
taken somebody else's job, or one for one, now, that presumes 
that there are a lot of people looking for stoop labor, that 
want to be seasonal employees, that want to work below minimum 
wage, without a union. And I am going to be learning more about 
that as the immigration theories continue.
    Then he has the most challenging theory of all, the 
presumption of employers' good intentions in terms of hiring 
these people that are the 12 million. I presume that most of 
these employers are trying to do what people in a capitalist 
system always like to accomplish. But we have found that where 
there are immigration circumstances involving employment, there 
are a lot of rascals that are employers. I hate to say this on 
the record, but these are--some of these folks, the things that 
they are pulling are shocking. And I used up all my shock 
quotients; my shock allotments for the month have all long 
gone. But we cannot--I don't know if we are ready to presume 
this theory of the presumption of good intentions of employers. 
That is going to have to be scrutinized by the Immigration 
Committee very carefully.
    I yield back, Madam Chair.
    Ms. Lofgren. At this time, all of our time has expired, and 
we are required to go to the floor to vote.
    Let me just thank each of the witnesses here for sticking 
with us. I know it has been a long day, but your information is 
very helpful. And a lot of people watching don't realize, you 
are volunteers. You are just here to help the Congress get this 
right, and we do appreciate your contribution.
    If we have additional questions, we will forward them to 
you. And if that happens, we would request that you answer 
those questions as promptly as you can.
    Chairman Conyers. Madam Chair, and none of them required 
any subpoenas, either.
    Ms. Lofgren. That is correct.
    And the record of the hearing will be opened for 5 
legislative days for Members to submit additional questions, 
and that is without objection.
    Now we will adjourn this hearing with thanks to all of the 
witnesses.
    [Whereupon, at 12:57 p.m., the Subcommittee was adjourned.]

                            A P P E N D I X

                              ----------                              


               Material Submitted for the Hearing Record

 Prepared Statement of the Honorable Zoe Lofgren, a Representative in 
Congress from the State of California, and Chairwoman, Subcommittee on 
Immigration, Citizenship, Refugees, Border Security, and International 
                                  Law

    I would like to welcome the Subcommittee Members, our witnesses, 
and members of the public to the Subcommittee's hearing on electronic 
employment verification systems, otherwise known as EEVS, systems which 
if made mandatory as some have proposed, would affect all 163 million 
U.S. workers and 7 million employers in the United States.
    In this hearing, I look forward to examining how U.S. workers may 
be impacted by a mandatory EEVS and explore ways to protect U.S. 
workers from unintended consequences of EEVS errors and/or misuse.
    Last year, the Immigration Subcommittee held two hearings on 
employment eligibility verification systems in the context of 
comprehensive immigration reform. The first hearing on April 24, 2007, 
examined the problems with the current paper-based and electronic 
employment verification systems. The second hearing, on April 26, 2007, 
explored proposals to improve employment eligibility verification, with 
emphasis on EEVS. At the time, four bills mandating the use of an EEVS 
had been introduced in the House of Representatives in the 110th 
Congress. There are now eleven bills pending before this Congress that 
would mandate the use of EEVS.
    Currently, the only functioning EEVS is known as Basic Pilot or E-
Verify, and it is a voluntary program. Only less than 1 percent of all 
the employers in the United States are currently enrolled to use E-
Verify. In addition, the Government Accountability Office (GAO) says 
that only half the registered employers are ``active'' users who have 
used the system at least once.
    At the current level of use, according to DHS in August last year, 
E-Verify received approximately 2 million queries a year. In contrast, 
if E-Verify is made mandatory for all employers, there would 63 million 
queries a year just for new employees. There are many proposals that 
would go beyond verification of new employees to also include existing 
employees despite the fact that there are 163 million workers in the 
U.S. at this time.
    Therefore, before we move forward on any mandatory EEVS to include 
all employers, we must be careful to ensure all the problems in the 
existing EEVS are addressed before we end up with the same problems, 
but on a much larger scale.
    Some of the problems we hope to consider today stem from reports 
produced by our own government, a non-governmental research 
corporation, and universities. These reports raise serious concerns of 
U.S. workers being wrongfully denied work authorization under E-Verify.
    In April 2007, the Service Employees International Union (SEIU) 
testified before this Subcommittee that ``[u]nless database errors are 
cured, 24,000 of the 300,000 estimated workers in each congressional 
district'' would be erroneously denied the eligibility to work by E-
Verify.
    The reports have also documented employer abuse and misuse of E-
Verify. A 2007 Westat report states that sixteen percent of employers 
reported that they had failed to train all of their relevant staff on 
the system.
    In addition, Although the E-Verify prohibits registered employers 
from using E-Verify for pre-employment screening of job applicants, 
this practice is common among employers. Almost one-third, 31 percent, 
reported using E-Verify to verify employment eligibility before the 
employee's first day of paid work, including many who used pre-
screening at the time of the employee's application.
    Employers also reported significant difficulty meeting the 
requirement of verifying new employees' information within three days 
of the employee's first day of work.
    According to Westat, GAO, and other outside experts, anyone who 
claims to be an employer can sign up to use E-Verify by signing an MOU 
with DHS and SSA, thereby obtaining the ability to access very private 
information.
    These are just some of the concerns raised about the existing E-
Verify employment verification system. Before this Congress moves 
forward on any effort to expand this system, we must ensure that these 
problems are appropriately addressed. I hope this hearing will provide 
us with a thorough understanding of these problems and the opportunity 
to identify ways to tackle the concerns.

                                

Prepared Statement of the Honorable John Conyers, Jr., a Representative 
in Congress from the State of Michigan, and Chairman, Committee on the 
                               Judiciary

    A nationwide Electronic Employment Verification System seems so 
simple.
    In fact, it sounds like an elegant solution to the problem of 
illegal immigration: all new hires must be checked against the Social 
Security and Homeland Security databases to see if they are legally 
entitled to work in the United States.

          But what does this System really do? Let me just cite 
        a few issues:

          It will essentially become a giant government 
        database on all Americans.

          It will require American workers--not foreign 
        workers--to be registered and checked for hiring.

          It will impose a burden on small businesses, whether 
        their workforce is 100% American or includes immigrants.

          And, it will constitute a significant step toward a 
        national identification card.

    There are several legislative proposals that mandate a national 
electronic verification system. These bills are well-intentioned, and 
represent a good-faith effort to address the problem of our 
dysfunctional immigration system.
    But as we consider proposals to expand the verification program 
from 66,000 employers to 7 million, we must keep several important 
goals in mind.
    First, American workers must be protected from wrongful denial of 
work authorization. The Social Security database is so error-prone that 
it results in the wrongful denial of more than 20,000 claims by Social 
Security claimants each year.
    Second, all workers must be protected from discrimination. We are 
concerned that for many employers, it will be easier to just not hire 
employees with ``unusual'' names or who appear foreign.
    There is a risk that discrimination on the basis of race or 
national origin will be covered up through claims that the employer was 
simply doing electronic verification screening, and there was a 
``problem.''
    Third, the system must not be misused. Even though pre-screening 
applicants is illegal under the current pilot program, nearly one-third 
of employers reported using the system in this manner.
    And the temptation will be great to submit the names of workers who 
try to speak out about labor exploitation or abuse, so as to let the 
immigration service inadvertently do the unscrupulous employer's dirty 
work.
    While I am skeptical of stand-alone EEVS bills, I am not opposed to 
an employment verification system that is part of a comprehensive 
solution to reforming our immigration system. But we are not going to 
enforce our way out of the current problem, no matter how well-designed 
an electronic monitoring system may be.
    Forcing Americans to drive to the Social Security office and spend 
days trying to clear their name will not fix the policy or political 
pressures that immigration creates. Those pressures will only be 
resolved by ensuring legal and sustainable migrant flows that address 
the needs of workers, employers, and families.
    Accordingly, I very much look forward to today's hearing, and I 
thank the witnesses for being with us.

                                

       Prepared Statement of the Honorable Sheila Jackson Lee, a 
    Representative in Congress from the State of Texas, and Member, 
 Subcommittee on Immigration, Citizenship, Refugees, Border Security, 
                         and International Law

    Thank you, Chairwoman Lofgren, and ranking member King, for 
convening today's very important oversight hearing on electronic 
employment verification systems (EEVS) and the necessary safeguards to 
protect privacy and to prevent misuse. With so many bills before this 
Congress, this hearing could not be more timely. I welcome the 
testimony of today's witnesses.
    The subject of today's hearing is how U.S. workers may become 
impacted by a mandatory EEVS and explore ways to protect U.S. workers 
from the unintended consequences of EEVS errors or misuse. The 
Subcommittee will also hear from Members who have introduced EEVS bills 
and will hear how their bills would protect U.S. workers from such 
misuse or errors.
    Last year, the Immigration Subcommittee held two hearings on 
employment eligibility verification systems in the context of 
comprehensive immigration reform. The first hearing was held on April 
24, 2007. It examined the problems with the current paper-based and 
electronic employment verification systems. The second hearing was held 
on April 26, 2007, and explored the proposals to improve employment 
eligibility verification. Last year, there were four bills mandating 
the use of an EEVS had been introduced in the 110th Congress. Now, 
there are eleven bills pending before Congress.
    Before 1986, the law allowed employers to hire undocumented 
workers. Employers were not required to verify the immigration or 
citizenship status of workers who they hired. However, in 1986, the 
Immigration Reform and Control Act (IRCA) made it illegal for employers 
to knowingly hire, recruit, or continue to employ undocumented workers. 
IRCA required employers to examine documents to verify their employees' 
identity and citizen or immigration status and to attest to the 
verification on Form I-9.
    In 1996, the Illegal Immigration Reform and Immigrant 
Responsibility Act created a voluntary EEVS called the Basic Pilot 
Program, which operated in five states in November 1997. The program 
was extended to the fifty states in 2003. The reauthorization was 
extended until November 2008. The Department of Homeland Security 
renamed the expanded program ``E-Verify'' in 2007. In the same year, 
the Office of Management and Budget instructed federal agencies to use 
E-Verify for all new employees and encouraged all federal contractors 
and vendors to enroll in the program. States have now extended the 
program to private employers.
    An employer wishing to use E-Verify must enter a Memorandum of 
Understanding with DHS and Social Security Administration. The MOU 
prevents an employer from pre-screening or using the E-Verify to check 
the citizenship or immigration status of workers before they are hired, 
selective screening of certain workers, or re-verifying the citizenship 
or immigration status of existing workers.
    Under current law, all employers must complete a Form I-9 for each 
new employee within three business days of the start of employment. The 
employer must enter the new worker's name, social security number, date 
of birth, immigration status, and the type of documents that worker 
used to demonstrate the status. This information is then checked 
against the SSA and DHS databases. If the information does not match, 
the employers inform the worker of the mismatch and issue a ``Notice to 
Employee of Tentative Nonconfirmation.'' If the worker chooses to 
contest the document, the worker has eight federal workdays to contact 
SSA or DHS to resolve the mismatch. SSA or DHS has ten federal workdays 
to address the notice. If it takes longer, the government will issue a 
``case in continuance'' notice. Unless the employer receives a ``case 
in continuance'' notice, it must run the employee's information through 
E-Verify after ten federal days to receive a confirmation of the 
worker's authorization to work or a final nonconfirmation.
    If the worker chooses not to contest the Notice to Employee of 
Tentative Nonconfirmation, the TNC will become final and the employer 
will be required to fire the worker. This system is fraught with 
problems. EEVS currently only affects a small portion of the 163 
million workers and 7 million employers in the U.S. Approximately 
66,000 employers or less than 1 percent of all employers in the U.S. 
are enrolled to use E-Verify. And, registered users do not use it.
    The focus of this hearing is the abuse and use of the E-Verify 
system on U.S. workers who have been erroneously denied work 
authorization because of E-Verify or EEVS--12.7 million errors were 
found in the records of U.S. Citizens. Moreover, there is evidence as 
cited in a recent GAO report that employers have abused or misused 
EEVS. Misuse has included failure to train staff on the use of the 
system, prescreening, reduction in work and pay for employees that 
received tentative nonconfirmations, failure to fire an employee that 
received a final nonconfirmation which resulted in discriminatory 
treatment, failure to explain the EEVS system to employees, 
reverification of existing employees, and failure to comply with 
paperwork requirements.
    The problems with E-Verify is that anyone can sign up to use it. In 
addition, employers have failed to maintain employee confidences, and 
there's a threat of increased identity theft.
    Today's hearing will discuss the use, misuse, and abuse of the E-
Verify and EEVS systems. I welcome the witnesses' insightful testimony.
    Thank you, I yield the balance of my time.

                                



















                                
















































                                



























                                 
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