Immigration Enforcement: Preliminary Observations on Employment  
Verification and Worksite Enforcement Efforts (21-JUN-05,	 
GAO-05-822T).							 
                                                                 
The opportunity for employment is one of the most important	 
magnets attracting illegal aliens to the United States. The	 
Immigration Reform and Control Act (IRCA) of 1986 established an 
employment eligibility verification process and a sanctions	 
program for fining employers for noncompliance. Few modifications
have been made to the verification process and sanctions program 
since 1986, and immigration experts state that a more reliable	 
verification process and a strengthened worksite enforcement	 
capacity are needed to help deter illegal immigration. In this	 
testimony, GAO provides preliminary observations from its ongoing
assessment of (1) the current employment verification process and
(2) U.S. Immigration and Customs Enforcement's (ICE) priorities  
and resources for the worksite enforcement program and the	 
challenges it faces in implementing that program.		 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-05-822T					        
    ACCNO:   A27337						        
  TITLE:     Immigration Enforcement: Preliminary Observations on     
Employment Verification and Worksite Enforcement Efforts	 
     DATE:   06/21/2005 
  SUBJECT:   Eligibility criteria				 
	     Eligibility determinations 			 
	     Employment 					 
	     Employment opportunities				 
	     Federal law					 
	     Forms (documents)					 
	     Fraud						 
	     Identity verification				 
	     Illegal aliens					 
	     Immigrants 					 
	     Immigration and naturalization law 		 
	     Labor force					 
	     Noncompliance					 
	     Program evaluation 				 
	     Program management 				 
	     Pilot programs					 
	     Basic Pilot Program				 
	     INS Worksite Enforcement Program			 

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GAO-05-822T

United States Government Accountability Office

GAO	Testimony Before the Subcommittee on Immigration, Border Security, and
Claims,

Committee on the Judiciary, House of Representatives

For Release on Delivery

Expected at 2:00 p.m. EDT IMMIGRATION

Tuesday, June 21, 2005

ENFORCEMENT

  Preliminary Observations on Employment Verification and Worksite Enforcement
                                    Efforts

Statement of Richard M. Stana, Director, Homeland Security and Justice

GAO-05-822T

[IMG]

June 21, 2005

IMMIGRATION ENFORCEMENT

Preliminary Observations on Employment Verification and Worksite Enforcement
Efforts

What GAO Found

The current employment verification (Form I-9) process is based on
employers' review of documents presented by new employees to prove their
identity and work eligibility. On the Form I-9, employers certify that
they have reviewed documents presented by their employees and that the
documents appear genuine and relate to the individual presenting the
documents. However, document fraud (use of counterfeit documents) and
identity fraud (fraudulent use of valid documents or information belonging
to others) have undermined the employment verification process by making
it difficult for employers who want to comply with the process to ensure
they hire only authorized workers and easier for unscrupulous employers to
knowingly hire unauthorized workers. In addition, the number and variety
of documents acceptable for proving work eligibility has hindered employer
verifications efforts. In 1998, the former Immigration and Naturalization
Service (INS), now part of the Department of Homeland Security (DHS),
proposed revising the Form I-9 process, particularly to reduce the number
of acceptable work eligibility documents, but DHS has not yet finalized
the proposal. The Basic Pilot Program, a voluntary program through which
participating employers electronically verify employees' work eligibility,
shows promise to enhance the current employment verification process, help
reduce document fraud, and assist ICE in better targeting its worksite
enforcement efforts. Yet, several current weaknesses in the pilot
program's implementation, such as its inability to detect identity fraud
and DHS delays in entering data into its databases, could adversely affect
increased use of the pilot program, if not addressed.

The worksite enforcement program has been a low priority under both INS
and ICE. For example, in fiscal year 1999 INS devoted about 9 percent of
its total investigative agents' time to worksite enforcement, while in
fiscal year 2003 it allocated about 4 percent. ICE officials told us that
the agency has experienced difficulties in proving employer violations and
setting and collecting fine amounts that meaningfully deter employers from
knowingly hiring unauthorized workers. In addition, INS and then ICE
shifted its worksite enforcement focus to critical infrastructure
protection after September 11, 2001.

                 United States Government Accountability Office

Mr. Chairman and Members of the Subcommittee:

I appreciate the opportunity to be here today to participate in this
hearing on worksite enforcement and employer sanctions efforts. As we and
others have reported in the past, the opportunity for employment is one of
the most important magnets attracting illegal aliens to the United States.
To help address this magnet, in 1986 Congress passed the Immigration
Reform and Control Act (IRCA),1 which made it illegal for individuals and
entities to knowingly hire, continue to employ, or recruit or refer for a
fee unauthorized workers. The act established a two-pronged approach for
helping to limit the employment of unauthorized workers: (1) an employment
verification process through which employers verify all newly hired
employees' work eligibility and (2) a sanctions program for fining
employers who do not comply with the act. Efforts to enforce these
sanctions are referred to as worksite enforcement and are conducted by
U.S. Immigration and Customs Enforcement (ICE).

As the U.S. Commission on Immigration Reform reported, immigration
contributes to the U.S. national economy by providing workers for certain
labor-intensive industries and contributing to the economic revitalization
of some communities.2 Yet, the commission also noted that immigration,
particularly illegal immigration, can have adverse consequences by helping
to depress wages for low-skilled workers and creating net fiscal costs for
state and local governments. Following the passage of IRCA, the U.S.
Commission on Immigration Reform and various immigration experts have
concluded that deterring illegal immigration requires, among other things,
strategies that focus on disrupting the ability of illegal immigrants to
gain employment through a more reliable employment eligibility
verification process and a more robust worksite enforcement capacity. In
particular, the commission report and other studies have found that the
single most important step that could be taken to reduce unlawful
migration is the development of a more effective system for verifying work
authorization. In the nearly 20 years since passage of IRCA, the
employment eligibility verification process and worksite enforcement
program have remained largely unchanged. Moreover, in previous work, we
reported that employers of unauthorized aliens faced little likelihood
that the

1P.L. 99-603, 8 U.S.C. 1324a et seq.

2U.S. Commission on Immigration Reform, Becoming an American: Immigration
and Immigrant Policy (Washington, D.C: September 1997).

Immigration and Naturalization Service (INS)3 would investigate, fine, or
criminally prosecute them, a circumstance that provides little
disincentive for employers who want to circumvent the law.4

My testimony today is drawn from our ongoing work for this subcommittee to
assess the employment verification process and ICE's worksite enforcement
program. Specifically, I will discuss our preliminary observations on (1)
the current employment verification process and (2) ICE's priorities and
resources for the worksite enforcement program and the challenges it faces
in implementing that program.

We developed these preliminary observations by reviewing federal laws and
information obtained from ICE, U.S. Citizenship and Immigration Services
(CIS), and Social Security Administration (SSA) officials in headquarters
and selected field locations. We examined regulations, guidance, past GAO
reports, and other studies on the employment verification process and the
worksite enforcement program. We also analyzed the results and examined
the methodology of an independent evaluation of the Basic Pilot Program,
an automated system through which employers electronically check
employees' work eligibility information against information in Department
of Homeland Security (DHS) and SSA databases, conducted by the Institute
for Survey Research at Temple University and Westat in June 2004.5
Furthermore, we analyzed data on employer use of the Basic Pilot Program
and on worksite enforcement and assessed the data reliability by reviewing
them for accuracy and completeness, interviewing agency officials
knowledgeable about the data, and examining documentation on how the data
are entered, categorized, and verified in the databases. We determined
that the independent evaluation and these data were sufficiently reliable
for the purposes of our review. We conducted the work reflected in this
statement from September 2004 through June 2005 in accordance with
generally accepted

3In March 2003, INS was merged into the Department of Homeland Security,
and its immigration functions were divided between U.S. Citizenship and
Immigration Services, U.S. Immigration and Customs Enforcement, and U.S.
Customs and Border Protection. U.S. Immigration and Customs Enforcement is
responsible for managing and implementing the worksite enforcement
program.

4GAO, Illegal Aliens: Significant Obstacles to Reducing Unauthorized Alien
Employment Exist, GAO/GGD-99-33 (Washington, D.C.: Apr. 2, 1999).

5Institute for Survey Research and Westat, Findings of the Basic Pilot
Program Evaluation (Washington, D.C.: June 2004).

government auditing standards. We plan to complete our analysis and
prepare a report for issuance later this summer.

                                    Summary

The employment verification process is primarily based on employers'
review of work eligibility documents presented by new employees, but
various weaknesses, such as the process' vulnerability to fraud, have
undermined this process. Employers certify that they have reviewed
documents presented by their employees and that the documents appear
genuine and relate to the individual presenting the documents. However,
document fraud (use of counterfeit documents) and identity fraud
(fraudulent use of valid documents or information belonging to others)
have made it difficult for employers who want to comply with the
employment verification process to ensure that they hire only authorized
workers and have made it easier for unscrupulous employers to knowingly
hire unauthorized workers. In addition, the large number and variety of
documents acceptable for proving work eligibility have hindered employers'
verification efforts. In 1998, the former INS proposed revising the
verification process and reducing the number of acceptable work
eligibility documents; that proposal was never acted upon. DHS, however,
at the direction of Congress, introduced the Basic Pilot Program, an
automated system for employers to electronically check employees' work
eligibility information with information in DHS and SSA databases, that
may enhance this process. This program shows promise to help reduce
document fraud and assist ICE in better targeting its worksite enforcement
efforts. Yet, a number of current weaknesses in the pilot program's
implementation, including its inability to detect identity fraud and DHS
delays in entering data into its databases, could adversely affect
increased use of the pilot program, if not addressed. In addition, CIS
officials told us the current Basic Pilot Program may not be able to
complete timely verifications if the number of employers using the program
significantly increased. In fiscal year 2004, about 2,300 employers
actively used the Basic Pilot Program.

Under both INS and ICE, worksite enforcement has been a low priority. In
fiscal year 1999, INS devoted about 240 full-time equivalents6 (or about 9
percent of its total investigative agent workyears) to worksite
enforcement, while in fiscal year 2003 it devoted about 90 full-time
equivalents (or about 4 percent of total agent workyears). Furthermore,

6One full-time equivalent is equal to one workyear or 2,080 non-overtime
hours.

Background

the number of notices of intent to fine issued to employers for knowingly
hiring unauthorized workers or improperly completing employment
verification forms decreased from 417 in fiscal year 1999 to 3 in fiscal
year 2004. According to ICE officials, the agency has experienced
difficulties in proving employer violations and in setting and collecting
fine amounts that meaningfully deter employers from knowingly hiring
unauthorized workers. In addition, after September 11, 2001, INS and then
ICE almost exclusively focused worksite enforcement resources on
identifying and removing unauthorized workers from critical infrastructure
sites, such as airports and nuclear power plants.

The Illegal Immigration Reform and Immigrant Responsibility Act (IIRIRA)7
of 1996 required INS and SSA to operate three voluntary pilot programs to
test electronic means for employers to verify an employee's eligibility to
work, one of which was the Basic Pilot Program.8 The Basic Pilot Program
was designed to test whether pilot verification procedures could improve
the existing employment verification process by reducing (1) false claims
of U.S. citizenship and document fraud; (2) discrimination against
employees; (3) violations of civil liberties and privacy; and (4) the
burden on employers to verify employees' work eligibility.

The Basic Pilot Program provides participating employers with an
electronic method to verify their employees' work eligibility. Employers
may participate voluntarily in the Basic Pilot Program, but are still
required to complete Forms I-99 for all newly hired employees in
accordance with IRCA. After completing the forms, these employers query
the pilot program's automated system by entering employee information
provided on the forms, such as name and social security number, into the
pilot Web site within 3 days of the employees' hire date. The pilot
program

7IIRIRA of 1996 was enacted within a larger piece of legislation, the
Omnibus Consolidated Appropriations Act, 1997, P. L. 104-208.

8The other two pilot programs mandated by IIRIRA-the Citizen Attestation
Verification Pilot Program and the Machine-Readable Document Pilot
Program-were discontinued in 2003 due to technical difficulties and
unintended consequences identified in evaluations of the programs. See
Institute for Survey Research and Westat, Findings of the Citizen
Attestation Verification Pilot Program Evaluation (Washington, D.C.: Apr.
2003) and Institute for Survey Research and Westat, Findings of the
Machine-Readable Document Pilot Program Evaluation (Washington, D.C.: May
2003).

9The Form I-9 is completed by employers in verifying the work eligibility
of all newly hired employees.

then electronically matches that information against information in SSA
and, if necessary, DHS databases to determine whether the employee is
eligible to work, as shown in figure 1. The Basic Pilot Program
electronically notifies employers whether their employees' work
authorization was confirmed. Those queries that the DHS automated check
cannot confirm are referred to DHS immigration status verifiers who check
employee information against information in other DHS databases.

Figure 1: Basic Pilot Program Verification Process

Social Security Administration

Department of Homeland Security

Source: GAO analysis based CIS information.

In cases when the pilot system cannot confirm an employee's work
authorization status either through the automatic check or the check by an
immigration status verifier, the system issues the employer a tentative

nonconfirmation of the employee's work authorization status. In this case,
the employers must notify the affected employees of the finding, and the
employees have the right to contest their tentative nonconfirmations by
contacting SSA or CIS to resolve any inaccuracies in their records within
8 days. During this time, employers may not take any adverse actions
against those employees, such as limiting their work assignments or pay.
Employers are required to either immediately terminate the employment, or
notify DHS of the continued employment, of workers who do not successfully
contest the tentative nonconfirmation and those who the pilot program
finds are not work-authorized.

  Various Weaknesses Have Undermined the Employment Verification Process, but
  Opportunities Exist to Enhance It

Current Employment Verification Process Is Based on Employers' Review of
Documents

In 1986, IRCA established the employment verification process based on
employers' review of documents presented by employees to prove identity
and work eligibility. On the Form I-9, employees must attest that they are
U.S. citizens, lawfully admitted permanent residents, or aliens authorized
to work in the United States. Employers must then certify that they have
reviewed the documents presented by their employees to establish identity
and work eligibility and that the documents appear genuine and relate to
the individual presenting them. In making their certifications, employers
are expected to judge whether the documents presented are obviously
counterfeit or fraudulent. Employers are deemed in compliance with IRCA if
they have followed the Form I-9 process, including when an unauthorized
alien presents fraudulent documents that appear genuine.

Form I-9 Process Is Since passage of IRCA in 1986, document and identity
fraud have made it Vulnerable to Document difficult for employers who want
to comply with the employment and Identity Fraud verification process to
ensure they hire only authorized workers. In its

1997 report to Congress, the Commission on Immigration Reform noted that
the widespread availability of false documents made it easy for
unauthorized aliens to obtain jobs in the United States. In past work, we

reported that large numbers of unauthorized aliens have used false
documents or fraudulently used valid documents belonging to others to
acquire employment, including at critical infrastructure sites like
airports and nuclear power plants.10 In addition, although studies have
shown that the majority of employers comply with IRCA and try to hire only
authorized workers, some employers knowingly hire unauthorized workers,
often to exploit the workers' low cost labor. For example, the Commission
on Immigration Reform reported that employers who knowingly hired illegal
aliens often avoided sanctions by going through the motions of compliance
while accepting false documents.

The Number and Variety of Acceptable Documents Hinders Employer
Verification Efforts

The number and variety of documents that are acceptable for proving work
eligibility have complicated employer verification efforts under IRCA.
Following the passage of IRCA in 1986, employees could present 29
different documents to establish their identity and/or work eligibility.
In a 1997 interim rule, INS reduced the number of acceptable work
eligibility documents from 29 to 27.11 The interim rule implemented
changes to the list of acceptable work eligibility documents mandated by
IIRIRA and was intended to serve as a temporary measure until INS issued
final rules on modifications to the Form I-9. Since the passage of IRCA,
we and others have reported on the need to reduce the number of acceptable
work eligibility documents to make the employment verification process
simpler and more secure.12 In 1998, INS proposed a further reduction in
the number of acceptable work eligibility documents to 14, but the
proposed rule has not been finalized. According to DHS officials, the
department is currently assessing possible revisions to the Form I-9
process, including reducing the number of acceptable work eligibility
documents, but has not established a target time frame for completing this
assessment and issuing regulations on Form I-9 changes.

10GAO/GGD-99-33, and GAO, Overstay Tracking: A Key Component of Homeland
Security and a Layered Defense, GAO-04-82 (Washington, D.C.: May 21,
2004).

11Eight of these documents establish both identity and employment
eligibility (e.g., U.S. passport or permanent resident card); 12 documents
establish identity only (e.g., driver's license); and 7 documents
establish employment eligibility only (e.g., social security card).

12See GAO/GGD-99-33, and U.S. Senate, Committee on the Judiciary,
Subcommittee on Immigration and Refugee Affairs, Options for an Improved
Employment Verification System (Washington, D.C.: Sept. 23, 1992).

The Basic Pilot Program Shows Promise to Enhance Employment Verification,
but Challenges Exist to Increased Use

Various immigration experts have noted that the most important step that
could be taken to reduce illegal immigration is the development of a more
effective system for verifying work authorization. In particular, the
Commission on Immigration Reform concluded that the most promising option
for verifying work authorization was a computerized registry based on
employers' electronic verification of an employee's social security number
with records on work authorization for aliens. The Basic Pilot Program,
which is currently available on a voluntary basis to all employers in the
United States, operates in a similar way to the computerized registry
recommended by the commission, and shows promise to enhance employment
verification and worksite enforcement efforts. Only a small portion-about
2,300 in fiscal year 2004-of the approximately 5.6 million employer firms
nationwide actively used the pilot program.13

The Basic Pilot Program enhances the ability of participating employers to
reliably verify their employees' work eligibility and assists
participating employers with identification of false documents used to
obtain employment by comparing employees' Form I-9 information with
information in SSA and DHS databases. If newly hired employees present
counterfeit documents, the pilot program would not confirm the employees'
work eligibility because their employees' Form I-9 information, such as
the false name or social security number, would not match SSA and DHS
database information when queried through the Basic Pilot Program.

Although ICE has no direct role in monitoring employer use of the Basic
Pilot Program and does not have direct access to program information,
which is maintained by CIS, ICE officials told us that program data could
indicate cases in which employers do not follow program requirements and
therefore would help the agency better target its worksite

13The number of employers who actively used the program in fiscal year
2004 includes a small number of employers who switched between two
versions of the program and, as a result, were counted twice as active
users. CIS is not able to easily determine which employers were counted
twice. In addition, the approximately 2,300 employers who actively used
the pilot program in fiscal year 2004 do not reflect the number of
worksites or individual business establishments using the program. The
about 5.6 million firms in the United States were the number of firms in
2002, which is the most current data available. Under the Basic Pilot
Program, one employer may have multiple worksites that use the pilot
program. For example, a hotel chain could have multiple individual hotels
using the Basic Pilot Program, but the hotel chain would represent one
employer using the pilot program. A firm is a business organization
consisting of one or more domestic establishments in the same state and
industry that were specified under common ownership or control.

enforcement efforts toward those employers. For example, the Basic Pilot
Program's confirmation of numerous queries of the same social security
number could indicate that a social security number is being used
fraudulently or that an unscrupulous employer is knowingly hiring
unauthorized workers by accepting the same social security number for
multiple employees. ICE officials noted that, in a few cases, they have
requested and received pilot program data from CIS on specific employers
who participate in the program and are under ICE investigation. However,
CIS officials told us that they have concerns about providing ICE broader
access to Basic Pilot Program information because it could create a
disincentive for employers to participate in the program, as employers may
believe that they are more likely to be targeted for a worksite
enforcement investigation as a result of program participation. According
to ICE officials, mandatory employer participation in the Basic Pilot
Program would eliminate the concern about sharing data and could help ICE
better target its worksite enforcement efforts on employers who try to
circumvent program requirements. Moreover, these officials told us that
mandatory use of an automated system like the pilot program could limit
the ability of employers who knowingly hired unauthorized workers to claim
that the workers presented false documents to obtain employment, which
could assist ICE agents in proving employer violations of IRCA.

The Basic Pilot Program may enhance the employment verification process
and a mandatory program could assist ICE in targeting its worksite
enforcement efforts. However, weaknesses exist in the current program. For
example, the current Basic Pilot Program cannot help employers detect
identity fraud. If an unauthorized worker presents valid documentation
that belongs to another person authorized to work, the Basic Pilot Program
would likely find the worker to be work-authorized. Similarly, if an
employee presents counterfeit documentation that contains valid
information and appears authentic, the pilot program may verify the
employee as work-authorized. DHS officials told us that the department is
currently considering possible ways to enhance the Basic Pilot Program to
help it detect cases of identity fraud, for example, by providing a
digitized photograph associated with employment authorization information
presented by an employee.

Delays in the entry of information on arrivals and employment
authorization into CIS databases can lengthen the pilot program
verification process for some secondary verifications. Although the
majority of pilot program queries entered by employers are confirmed via
the automated SSA and DHS verification checks, about 15 percent of queries
authorized by DHS required secondary verifications in fiscal year

2004.14 According to CIS, cases referred for secondary verification are
typically resolved within 24 hours, but a small number of cases take
longer, sometimes up to 2 weeks, due to, among other things, delays in
entry of employment authorization information into CIS databases.
Secondary verifications lengthen the time needed to complete the
employment verification process and could harm employees because employers
might reduce those employees' pay or restrict training or work
assignments, which are prohibited under pilot program requirements, while
waiting for verification of their work eligibility.15 DHS has taken steps
to increase the timeliness and accuracy of information entered into
databases used as part of the Basic Pilot Program and reports, for
example, that data on new immigrants are now typically available for
verification within 10 to 12 days of an immigrant's arrival in the United
States while, previously, the information was not available for up to 6 to
9

16

months after arrival.

According to CIS officials, current CIS staff may not be able to complete
timely secondary verifications if the number of employers using the
program significantly increased. In particular, these officials said that
if a significant number of new employers registered for the program or if
the program were mandatory for all employers, additional staff would be
needed to maintain timely secondary verifications. Currently, CIS has
approximately 38 Immigration Status Verifiers allocated for completing
Basic Pilot Program secondary verifications, and these verifiers reported
that they are able to complete the majority of manual verification checks
within their target time frame of 24 hours. However, CIS estimated that
even a relatively small increase in the number of employers using the
program would significantly slow the secondary verification process and
strain existing resources allocated for the program.

14In fiscal year 2004, only about 10 percent of total Basic Pilot Program
queries were referred to DHS for verification. Of these queries referred
to DHS for verification, about 85 percent were confirmed via the DHS
automated verification check.

15Institute for Survey Research and Westat.

16DHS, Report to Congress on the Basic Pilot Program (Washington, D.C.:
June 2004).

  Low Priority and Implementation Challenges Have Hindered Worksite Enforcement
  Efforts

                              Worksite Enforcement
                             Remains a Low Priority

Worksite enforcement was a low priority for INS and continues to be a low
priority for ICE. In the 1999 INS Interior Enforcement Strategy, the
strategy to block and remove employers' access to undocumented workers was
the fifth of five interior enforcement priorities.17 We have reported
that, relative to other enforcement programs in INS, worksite enforcement
received a small portion of INS's staffing and enforcement budget and that
the number of employer investigations INS conducted each year covered only
a fraction of the number of employers who may have employed unauthorized
aliens.18 Furthermore, INS investigative resources were redirected from
worksite enforcement activities to criminal alien cases, which consumed
more investigative hours by the late 1990s than any other enforcement
activity. After September 11, 2001, INS and ICE focused investigative
resources on national security-related investigations. According to ICE,
the redirection of resources from other enforcement programs to perform
national security-related investigations resulted in fewer resources for
traditional program areas, like worksite enforcement and fraud.

The resources INS and ICE devoted to worksite enforcement have continued
to decline. As shown in figure 2, between fiscal years 1999 and 2003, the
most recent fiscal year for which comparable data are available, the
percentage of agent workyears spent on worksite enforcement efforts
generally decreased from about 9 percent, or 240 full-time equivalents, to
about 4 percent, or 90 full-time equivalents.

17INS, Interior Enforcement Strategy (Washington, D.C.: Jan. 1999).
18GAO/GGD-99-33.

Figure 2: Investigative Agent Workyears Spent on Worksite Enforcement
Efforts and Agent Workyears Spent on Other Investigative Areas for Each
Fiscal Year from 1999 through 2003

Work years 3,000

2,499 2,472

2,500

2,000

1,500

1,000

500

0 1999 2000 2001 2002 2003 Fiscal year

Work years for worksite enforcement

Work years for all other investigative areas Source: GAO analysis of INS
case management data.

Workyear data for fiscal year 2004 cannot be directly compared with
workyear data for previous fiscal years because of changes in the way INS
and ICE agents entered and categorized data in their respective case
management systems. However, ICE data indicate that the agency

allocated about 65 full-time equivalents to worksite enforcement in fiscal
year 2004.19

In addition, the number of notices of intent to fine issued to employers
as well as the number of unauthorized workers arrested at worksites have
also declined. Between fiscal years 1999 and 2004, the number of notices
of intent to fine issued to employers for improperly completing Forms I-9
or knowingly hiring unauthorized workers generally decreased from 417 to

3. (See figure 3.)

19Fiscal year 2004 and 2005 data cannot be compared with data for previous
fiscal years because the way INS agents entered data on investigative
workyears into the INS case management system differs from the way ICE
agents enter such data into the ICE system. Following the creation of ICE
in March 2003, the case management system used to enter and maintain
information on immigration investigations changed. With the establishment
of ICE, agents began using the legacy U.S. Customs Service's case
management system, called the Treasury Enforcement Communications System,
for entering and maintaining information on investigations, including
worksite enforcement operations. Prior to the creation of ICE, the former
INS entered and maintained information on investigative activities in the
Performance Analysis System, which captured information on immigration
investigations differently than the Treasury Enforcement Communications
System.

Figure 3: Number of Notices of Intent to Fine Issued to Employers for Each
Fiscal Year from 1999 through 2004

Notices of intent to fine 450

417

400

350

300

250

200

150

100

50

0 1999 2000 2001 2002 2003 2004 Fiscal year

Source: GAO analysis of INS and ICE case management data.

The number of worksite arrests declined by about 84 percent from 2,849 in
fiscal year 1999 to 445 in fiscal year 2003. (See figure 4.)

Figure 4: Number of Worksite Enforcement Arrests for Each Fiscal Year from
1999 through 2003

Number of arrests

                                     3,000

                                     2,849

The difficulties that INS and ICE have experienced in proving that
employers knowingly hired unauthorized workers and in setting and
collecting fine amounts that meaningfully deter employers from knowingly
hiring unauthorized workers have limited the effectiveness of worksite
enforcement efforts. In particular, the availability and use of fraudulent
documents has not only undermined the employment verification process, but
has also made it difficult for ICE agents to prove that employers
knowingly hired unauthorized workers. In 1996, the Department of Justice
Office of the Inspector General reported that the proliferation of cheap
fraudulent documents made it possible for the unscrupulous employer to
avoid being held accountable for hiring illegal aliens.20 In 1999, we
reported that the prevalence of document fraud made it difficult for INS
to prove that an employer knowingly hired an unauthorized alien.21 ICE
officials

20Department of Justice, Office of the Inspector General, Immigration and
Naturalization Service Efforts to Combat Harboring and Employing Illegal
Aliens in Sweatshops, I-96-08 (Washington, D.C.: May 1996).

21GAO/GGD-99-33.

                                     2,500

                                     2,000

                                     1,500

                                     1,000

500

                     0 1999 2000 2001 2002 2003 Fiscal year

               Source: GAO analysis of INS case management data.

Difficulties Proving Employer Violations, Collecting Fines, and Detaining
Aliens Have Weakened the Worksite Enforcement Program

told us that employers who they suspect knowingly hire unauthorized
workers can claim that they were unaware that their workers presented
false documents at the time of hire, making it difficult for agents to
prove that the employer violated IRCA.

According to ICE officials, when agents can prove that an employer
knowingly hired an unauthorized worker, difficulties in setting and
collecting meaningful fine amounts have undermined the effectiveness of
worksite enforcement efforts and the deterrent effect of employer fines.
Under IRCA, employers who fail to properly complete, retain, or present
for inspection a Form I-9 may be administratively fined from $110 to
$1,100 for each employee. Employers who knowingly hire or continue to
employ unauthorized aliens may be administratively fined from $275 to
$11,000 for each employee, depending on whether the violation is a first
or subsequent offense. ICE officials told us fine amounts recommended by
both INS and ICE agents were often negotiated down in value during
discussions between agency attorneys and employers. These officials said
that the agency mitigates employer fines because doing so may be a more
efficient use of government resources than pursuing employers who contest
or ignore fines, which could be more costly to the government than the
fine amount sought. Furthermore, the amount of mitigated fines may be, in
the opinion of some ICE officials, so low they believe that employers view
it as a cost of doing business, and they believe the fines do not provide
an effective deterrent for employers who attempt to circumvent IRCA. In
addition, the Debt Management Center, which is responsible for collecting
fines issued against employers for violations of IRCA, has faced
difficulties in collecting the full amount of fines from employers.
According to ICE, the agency has faced difficulties in collecting fines
from employers for a number of reasons, for example, because employers
went out of business or declared bankruptcy. In such instances, the agency
determines whether to pursue collection of employer fines based on the
level of resources needed to pursue the employer and the likelihood of
collecting the fine amount.

Finally, the Office of Detention and Removal22 has limited detention
space, and unauthorized workers detained during worksite enforcement
investigations are a low priority for that space. In 2004, the Under

22The Office of Detention and Removal is primarily responsible for
identifying and removing criminal aliens from the United States. The
office is also responsible for managing ICE's space for detaining aliens.

Secretary for Border and Transportation Security sent a memo to the
Commissioner of U.S. Customs and Border Protection and the Assistant
Secretary for ICE outlining the priorities for the detention of aliens.
According to the memo, aliens who are subjects of national security
investigations were among those groups of aliens given the highest
priority for detention, while those arrested as a result of worksite
enforcement investigations were to be given the lowest priority. According
to ICE officials, the lack of sufficient detention space has limited the
effectiveness of worksite enforcement efforts. For example, they said that
if investigative agents arrest unauthorized aliens at worksites, the
aliens would likely be released because the Office of Detention and
Removal detention centers do not have sufficient space to house the aliens
and they may re-enter the workforce, in some cases returning to the
worksites from where they were originally arrested.

Worksite Enforcement Focus Shifted to Critical Infrastructure Protection
after September 11, 2001

In keeping with the primary mission of DHS to combat terrorism, after
September 11, 2001, INS and then ICE has focused its resources for
worksite enforcement on identifying and removing unauthorized workers from
critical infrastructure sites, such as airports and nuclear power plants,
to help reduce vulnerabilities at those sites. According to ICE officials,
the agency shifted its worksite enforcement focus to critical
infrastructure protection because unauthorized workers employed at
critical infrastructure sites indicate security vulnerabilities at those
sites. In conducting critical infrastructure operations, the agency has
worked with employers to identify and remove unauthorized workers and, as
a result, has not focused on sanctioning employers at critical
infrastructure sites. In 2003, ICE headquarters issued a memo requiring
field offices to request approval from ICE headquarters prior to opening
any worksite enforcement investigation not related to the protection of
critical infrastructure sites, such as investigations of farms and
restaurants. ICE officials told us that the purpose of this memo was to
help ensure that field offices focused worksite enforcement efforts on
critical infrastructure protection operations. Field office
representatives reported that noncritical infrastructure worksite
enforcement is one of the few investigative areas for which offices must
request approval from ICE headquarters to open an investigation and also
reported that worksite enforcement is not a priority unless it is related
to critical infrastructure. In addition, some of these representatives, as
well as immigration experts we interviewed, noted that the focus on
critical infrastructure protection does not address the majority of
worksites in industries that have traditionally provided the magnet of
jobs attracting illegal aliens to the United States.

Concluding Observations

GAO Contact and Staff Acknowledgments

Efforts to reduce the employment of unauthorized workers in the United
States require a strong employment eligibility verification process and a
credible worksite enforcement program to ensure that employers meet
verification requirements. The current employment verification process has
not fundamentally changed since its establishment in 1986, and ongoing
weaknesses have undermined its effectiveness. The Basic Pilot Program
shows promise for enhancing the employment verification process and
reducing document fraud if implemented on a much larger scale. However,
the weaknesses identified in the current implementation of the Basic Pilot
Program, as well as the costs of an expanded program, are considerations
that will need to be addressed in deciding whether this program, or a
similar automated employment verification process, should be significantly
expanded or made mandatory. Even with a strengthened employment
verification process, a credible worksite enforcement program would be
needed because no verification system is foolproof and not all employers
may want to comply with IRCA.

We are continuing our work and expect to have several recommendations
aimed at improving employment verification and worksite enforcement
efforts.

This concludes my prepared statement. I would be pleased to answer any
questions you and the Subcommittee members may have.

For further information about this testimony, please contact Richard Stana
at 202-512-8777.

Other key contributors to this statement were Orlando Copeland, Michele
Fejfar, Ann H. Finley, Rebecca Gambler, Kathryn Godfrey, Eden C. Savino,
and Robert E. White.

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