Illegal Aliens: Significant Obstacles to Reducing Unauthorized Alien
Employment Exist (Letter Report, 04/02/99, GAO/GGD-99-33).

Pursuant to a legislative requirement, GAO reviewed the Attorney
General's strategy for enforcing workplace immigration laws, focusing
on: (1) the effectiveness of the employment verification process in
preventing employers from hiring unauthorized aliens; (2) the
Immigration and Naturalization Service's (INS) efforts to improve the
employment verification process; (3) the level of effort INS and the
Department of Labor (DOL) devoted to worksite enforcement activities and
the results of these activities; and (4) changes being made to INS'
worksite enforcement program.

GAO noted that: (1) the effectiveness of the employment verification
process, which relies on identity and employment eligibility documents
that employees are to show employers, can be undermined by unauthorized
aliens using fraudulent documents; (2) INS has undertaken several
initiatives to improve the employment verification process to make it
less susceptible to fraud, but significant obstacles remain; (3) INS is
testing or expects to test three pilot programs in which employers
electronically verify an employee's eligibility to work; (4) INS has
made little progress toward its goal of reducing the number of documents
that employers can accept to determine employment eligibility; (5) in
February 1998, INS issued proposed regulations to reduce the number of
documents that can be used from 27 to 14; (6) however, INS received
numerous comments on the proposed regulations and INS officials do not
know when these regulations will be finalized; (7) INS has begun issuing
new documents with increased security features, which INS hopes will
make it easier for employers to verify the documents' authenticity; (8)
however, aliens are statutorily permitted to show employers various
documents other than the INS documents that authorize aliens to work,
and other widely used documents do not have the security features of the
INS documents; (9) since 1994, INS has devoted about 2 percent of its
enforcement workyears to its worksite enforcement program, which is
designed to detect noncompliance with the Immigration Reform and Control
Act; (10) in 1998, INS completed about 6,500 investigations of
employers, which equated to about 3 percent of the country's estimated
number of employers of unauthorized aliens; (11) DOL has provided
limited assistance to INS in identifying employers suspected of hiring
unauthorized workers, and, under a new agreement with INS, DOL's role
will be reduced; (12) the results of INS' worksite enforcement program
that indicate it has infrequently imposed sanctions on employers; (13)
INS is changing its approach to worksite enforcement; (14) INS has
developed an interior enforcement strategy with five strategic
priorities; (15) two of the priorities involve worksite enforcement,
with one calling for INS to pursue the criminal investigation of
employers who are flagrant or grave violators; and (16) since INS is
just beginning this new approach, it is too soon to know how the
proposed changes will be implemented or to assess their impact on the
employment of unauthorized workers.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  GGD-99-33
     TITLE:  Illegal Aliens: Significant Obstacles to Reducing 
             Unauthorized Alien Employment Exist
      DATE:  04/02/99
   SUBJECT:  Illegal aliens
             Eligibility determinations
             Immigration and naturalization law
             Alien labor
             Fraud
             Law enforcement
             Labor law
IDENTIFIER:  INS Interior Enforcement Strategy
             INS Worksite Enforcement Program
             INS Employment Verification Process
             
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Microsoft Word - 15fj01!.PBF ILLEGAL ALIENS Significant Obstacles
to Reducing Unauthorized Alien Employment Exist

United States General Accounting Office

GAO Report to Congressional Committees


April 1999 

GAO/GGD-99-33

April 1999   GAO/GGD-99-33

United States General Accounting Office Washington, D. C. 20548

General Government Division

B-278845

Page 1 GAO/GGD-99-33 Unauthorized Employment of Aliens

GAO April 2, 1999 The Honorable Orrin G. Hatch Chairman The
Honorable Patrick J. Leahy Ranking Minority Member Committee on
the Judiciary United States Senate

The Honorable Henry J. Hyde Chairman The Honorable John Conyers,
Jr. Ranking Minority Member Committee on the Judiciary House of
Representatives

One of the primary magnets attracting illegal aliens to the United
States is jobs. Even among those who enter the United States
legally (e. g., as tourists or students), many are believed to
overstay their visas and take jobs. The Department of Justice's
Immigration and Naturalization Service (INS) estimated that about
5 million illegal aliens resided in the United States in October
1996, and that their numbers increased at an average rate of about
275,000 per year between October 1992 and October 1996. Many
immigration experts have said that as long as opportunities for
employment exist, the incentive to enter the United States
illegally or overstay visas will persist and efforts at the U. S.
borders to prevent illegal entry will be undermined. Therefore,
these experts believe that reducing the magnet of employment
should be an integral part of a comprehensive strategy to reduce
illegal immigration.

This is our second of six planned reports on the Attorney
General's strategy to deter illegal entry into the United States.
These reports are mandated by the Illegal Immigration Reform and
Immigrant Responsibility Act of 1996 (1996 Act), Public Law 104-
208. In our first report, 1 we discussed the Attorney General's
strategy to deter illegal entry along the southwest border. As
agreed with your committees, this second report reviews the
strategy's objective related to enforcing workplace immigration
laws. Specifically, this report addresses the following: (1) the
effectiveness of the current employment verification process in
preventing

1 Illegal Immigration: Southwest Border Strategy Results
Inconclusive; More Evaluation Needed (GAO/GGD-98-21, Dec. 11,
1997).

B-278845 Page 2 GAO/GGD-99-33 Unauthorized Employment of Aliens

employers from hiring unauthorized aliens, 2 (2) INS' efforts to
improve the employment verification process, (3) the level of
effort INS and the Department of Labor devoted to worksite
enforcement activities and the results of these activities, and
(4) changes being made to INS' worksite enforcement program.

More than 12 years after the Immigration Reform and Control Act
(IRCA) of 1986 3 created an employment verification process
intended to prevent employers from hiring unauthorized aliens,
significant numbers of unauthorized aliens can still obtain
employment. The effectiveness of the current verification process,
which relies on identity and employment eligibility documents that
employees are to show employers, can be undermined by unauthorized
aliens using fraudulent documents. Fraudulent documents, which can
often appear genuine, are widely available and widely used by
unauthorized aliens to obtain employment.

INS has undertaken several initiatives to improve the employment
verification process to make it less susceptible to fraud, but
significant obstacles remain. First, as mandated in the 1996 Act,
INS is testing or expects to test three pilot programs in which
employers electronically verify an employee's eligibility to work.
However, employer participation in the pilot programs under way
has been significantly less than INS anticipated. Other federal
and state agencies that have contact with potential participants
generally have not had a role in informing them about INS' pilot
programs. According to INS, Labor, and Social Security
Administration (SSA) officials, some employers believe that pilot
participation could place them at a disadvantage, relative to
nonparticipating competitors, in a tight labor market.

Second, INS has made little progress toward its goal of reducing
the number of documents that employers can accept to determine
employment eligibility. In February 1998, INS issued proposed
regulations to reduce the number of documents that can be used
from 27 to 14. However, INS received numerous comments on the
proposed regulations and INS officials do not know when these
regulations will be finalized. Lastly, INS has begun issuing new
documents with increased security features, which INS hopes will
make it easier for employers to verify the documents'
authenticity. However, aliens are statutorily permitted to show

2 We use the term unauthorized aliens to refer to aliens who do
not have permission from INS to work in the United States but who
are working, regardless of whether they entered legally or
illegally. Unauthorized aliens in the United States are subject to
removal from the country by INS .

3 P. L. 99- 603, 8 U. S. C. 1324a et seq. Results in Brief

B-278845 Page 3 GAO/GGD-99-33 Unauthorized Employment of Aliens

employers various documents other than the INS documents that
authorize aliens to work, and other widely used documents (e. g.,
Social Security cards and birth certificates) do not have the
security features of the INS documents.

Since 1994, INS has devoted about 2 percent of its enforcement
workyears to its worksite enforcement program, which is designed
to detect noncompliance with IRCA. In 1998, INS completed about
6,500 investigations of employers, which equated to about 3
percent of the country's estimated number of employers of
unauthorized aliens. Labor has provided limited assistance to INS
in identifying employers suspected of hiring unauthorized workers,
and, under a new agreement with INS, Labor's role in this area
will be reduced. Labor believes that delving into immigration-
related worksite enforcement matters, such as the immigration
status of workers, could hamper its own mission of enforcing
workplace standards by limiting workers' willingness to report
possible violations to Labor.

The results of INS' worksite enforcement program indicate it has
infrequently imposed sanctions on employers. Although a major goal
of the program was to target for investigation employers who
knowingly violated the law, more than 8 out of 10 investigations
completed during the period we reviewed did not result in a
penalty. INS officials attributed these modest results to various
factors. They stated that the widespread use of fraudulent
documents made it difficult for INS to prove that an employer
knowingly hired an unauthorized alien. In addition, they stated
that INS' requirement that district worksite programs meet various
numerical goals, such as identifying a certain number of
unauthorized aliens, may have placed an undue focus on arresting
unauthorized aliens and may have undermined INS' overall goal to
target employers suspected of being major violators.

INS is in the process of changing its approach to worksite
enforcement. The Service has developed an interior enforcement
strategy with five strategic priorities. Two of the priorities
involve worksite enforcement, with one calling for INS to pursue
the criminal investigation of employers who are flagrant or grave
violators. However, the strategy does not define flagrant or grave
violation. According to an INS official, as of March 1999, INS was
still developing implementation plans for the five strategic
priorities. Since INS is just beginning this new approach, it is
too soon to know how the proposed changes will be implemented or
to assess their impact on the employment of unauthorized workers.

B-278845 Page 4 GAO/GGD-99-33 Unauthorized Employment of Aliens

We have made recommendations to the Commissioner of INS for
addressing certain issues identified during our review.

IRCA made it illegal for employers knowingly to hire or continue
to employ or recruit or refer for a fee unauthorized aliens. IRCA
required employers to comply with an employment verification
process intended to provide employers with a means to avoid hiring
unauthorized aliens. Generally, IRCA requires employers to verify
the identity and eligibility of all new employees hired after
November 6, 1986.

Under IRCA, employers must request newly hired employees to
present a document or documents that establish their identity and
eligibility to work. As of February 1999, INS rules allowed
employees to present 27 different documents 8 that establish both
identity and eligibility to work (e. g., a U. S. passport or INS
permanent resident card, which is also called a green card); 12
that establish identity (e. g., a driver's license); and 7 that
establish eligibility to work (e. g., a Social Security card,
other than one containing the following legend: Not Valid for
Employment). The employment verification process that INS
established pursuant to IRCA requires employers to complete the
Employment Eligibility Verification Form, INS Form I- 9,
certifying that they have reviewed the documents and that the
documents appear genuine and relate to the individual. 4 In making
their certifications, employers are expected to judge whether the
documents presented are obviously counterfeit or fraudulent. 5
Unless INS has evidence that the employer knew the employee was
unauthorized to work, employers are deemed in compliance with the
law if they have followed the verification procedures, even though
an unauthorized alien may have presented fraudulent documents that
appeared genuine.

IRCA provides penalties or sanctions against employers who violate
the law. Employers who fail to properly complete, retain, or
present for inspection a Form I- 9 may face civil fines ranging
from $100 to $1,000 for each employee for whom the form was not
completed, retained, or presented. Employers who knowingly hire or
continue to employ unauthorized aliens may be fined from $250 to
$10,000, depending upon whether the violation is a first or
subsequent offense. Employers who engage in a pattern or practice
of knowingly hiring or continuing to employ

4 Appendix I contains a copy of the Form I- 9 and a complete list
of the 27 acceptable documents. 5 We use the term fraudulent
throughout this report to refer to situations in which
unauthorized aliens illegally used documents for the purposes of
obtaining employment. For our purposes, fraudulent documents
include documents that were illegally manufactured as well as
genuine documents used illegally (e. g., an unauthorized alien
using another person's valid document). Background

B-278845 Page 5 GAO/GGD-99-33 Unauthorized Employment of Aliens

unauthorized aliens are subject to criminal penalties consisting
of fines up to $3,000 per employee and/ or up to 6- months
imprisonment.

During the legislative debate on IRCA, concerns were expressed
that employers fearing sanctions would not hire foreign- looking
or foreignsounding citizens and aliens authorized to work. As a
result, IRCA prohibits employers with four or more employees from
discriminating against any authorized worker on the basis of
citizenship or national origin. IRCA established Justice's Office
of Special Counsel for Immigration- Related Unfair Employment
Practices (OSC) to investigate certain charges of discrimination.
6

INS has a worksite enforcement program that is responsible for
checking employer compliance with IRCA's verification requirements
and enforcing IRCA's employer sanctions provisions. Labor has
agreed to assist INS by checking employer compliance with
verification requirements in the course of some of its own
employer investigations.

In March 1990, we issued our third and final report required by
IRCA. 7 In that report, we concluded that, on the basis of our
analysis of INS apprehension data and research by other
organizations, employer sanctions had slowed illegal immigration.
However, we also concluded that the prevalence of counterfeit and
fraudulent documents was threatening the security of IRCA's
employment verification process for prohibiting unauthorized alien
employment. As a result, unauthorized aliens' use of fraudulent
documents was undermining IRCA's employment verification process
and improvements were needed. On the basis of responses from about
4,400 employers who responded to our survey, we also concluded
that, while about 65 percent of employers were complying with the
Form I- 9 verification requirements, most employers wanted a
simpler or better verification system. A majority of the employers
we surveyed indicated that the federal government should consider
such

6 OSC is responsible for investigating charges of citizenship
status discrimination against employers with 4 or more employees
and national origin discrimination by employers with 4 to 14
employees. Title VII of the Civil Rights Act of 1964 and the
remedies against discrimination it provides remain in effect.
Title VII prohibits discrimination against anyone on the basis of
national origin in hiring, discharging, recruiting, assigning,
compensating, and other terms and conditions of employment.
Charges of national origin discrimination against employers with
15 or more employees are generally filed with the Equal Employment
Opportunity Commission.

7 IRCA required us to issue three studies on IRCA's
implementation. In response, we issued the following reports:
Immigration Reform: Status of Implementing Employer Sanctions
After One Year (GAO/GGD-88-14, Nov. 5, 1987); Immigration Reform:
Status of Implementing Employer Sanctions After Second Year
(GAO/GGD-89-16, Nov. 15, 1988); and Immigration Reform: Employer
Sanctions and the Question of Discrimination (GAO/GGD-90-62, Mar.
29, 1990). Findings From Our March

1990 Study of IRCA's Employment- Related Provisions

B-278845 Page 6 GAO/GGD-99-33 Unauthorized Employment of Aliens

things as reducing the number of work authorization documents INS
issued and establishing systems for employers to contact INS and
SSA to verify INS documents and Social Security numbers (SSN).

We also concluded that there was widespread discrimination against
eligible workers as a result of IRCA. We stated that many
employers appeared confused over the variety of documents that
could be used to verify employment and uncertain about how to
comply with IRCA's verification system. For example, some
employers did not accept valid work authorization documents, and
some employers said they only asked alien employees, rather than
all employees, to show documents. Noting that this uncertainty and
confusion as well as the prevalence of fraudulent documents may
have caused the widespread pattern of discrimination, we concluded
that a simpler system that relied on the use of fewer documents
could reduce discrimination.

No one knows exactly how many unauthorized aliens are illegally
employed in the United States or what percentage of the total
workforce they represent. According to the Bureau of Labor
Statistics, about 132 million people were employed in the civilian
labor force as of October 1998. Even if all of the estimated 5
million illegal aliens residing in the United States as of October
1996 held jobs in October 1998, they would have represented less
than 4 percent of the nation's workforce. The results from INS'
inspection of a random sample of the nation's 6.5 million
employers in fiscal year 1997 indicated that about 195,000
employers (or about 3 percent) had employed unauthorized aliens.

Illegal alien employment has been shown to be more significant in
certain industries and locations. For example, Labor's National
Agricultural Workers Survey estimated that 37 percent of the
agricultural workers in 1995 were illegal. There is also evidence
that the meatpacking, construction, and garment industries have
employed large numbers of unauthorized aliens. For example, in
February 1998, we reported that in 1996 and 1997, INS found that
about 23 percent of the workers at seven Nebraska and Iowa
meatpacking plants had questionable documents. 8 INS' inspection
of 89 construction businesses in Las Vegas, NV, starting in March
1995 found that 39 percent of the approximately 6,000 employees
for whom a Form I- 9 was completed appeared to be unauthorized to
work. Similarly, inspections of 74 Los Angeles area garment
contractors in March

8 Community Development: Changes in Nebraska's and Iowa's Counties
With Large Meatpacking Plant Workforces (GAO/RCED-98-62, Feb. 27,
1998). Illegal Alien Employment Is

a Small Portion of the Total Workforce, but Is Significant in
Certain Industries

B-278845 Page 7 GAO/GGD-99-33 Unauthorized Employment of Aliens

1998 revealed that 41 percent of the 7,100 employees at these
worksites were unauthorized to work.

INS Investigations is responsible for enforcing IRCA's employer
sanctions provisions. Investigations receives information,
referred to as leads, from a variety of sources, including the
public and other federal or state agencies, regarding unauthorized
alien employment. Worksite enforcement unit supervisors are to
systematically analyze these leads and, as a first priority, open
investigations on employers suspected of knowingly hiring
unauthorized aliens and/ or suspected of engaging in abusive
employment practices.

To track employer sanctions case activity, Investigations field
personnel are to prepare Employer Case Activity Reports
documenting such case activities as the opening of a case, a Form
I- 9 inspection, or the arrest of unauthorized aliens. Data from
these reports are to be entered into INS' Employer Case Activity
database. For ease of presentation, we refer to this database as
the Employer Sanctions database throughout this report. The
database contains case- specific information submitted by local
INS offices since August 1989. As of May 1998, the system
contained data on over 69,000 employer sanctions cases.

In May 1998, INS issued a directive regarding worksite enforcement
operations. According to the Executive Associate Commissioner for
Field Operations, the directive was intended to provide
consistency among INS districts in conducting worksite operations.
Under the directive, all investigations in which INS believes an
employer is unknowingly hiring unauthorized aliens must start with
a review of Form I- 9 and other employment records. INS is then to
hold a seminar for these employers to educate them on such things
as how to properly prepare the Form I- 9 and how to detect
fraudulent documents. The employers are then to be given a list of
aliens INS believes are unauthorized to work. The employer must
either re- verify that the alien is authorized to work or dismiss
the alien. INS could then inform the employer that it intended to
arrest any unauthorized aliens. For investigations in which INS
believes an employer is knowingly hiring unauthorized aliens, INS
is to arrest the unauthorized aliens first, followed by a review
of the Form I- 9 and other employment records. In addition, before
an enforcement action can be conducted at an employer's place of
business, INS worksite enforcement units must prepare an
operational plan to be approved by either the INS Regional
Director or the Executive Associate Commissioner for Field
Operations. INS Worksite Enforcement

Program

B-278845 Page 8 GAO/GGD-99-33 Unauthorized Employment of Aliens

Before this directive, the decision of whether INS arrested
unauthorized aliens before or after a Form I- 9 inspection was
left to the discretion of the INS district office. In addition,
there was no requirement that INS hold seminars for employers or
that operational plans be approved by the regional office or
headquarters.

As agreed with your offices, this report addresses the following:
(1) the effectiveness of the current employment verification
process in preventing employers from hiring unauthorized aliens,
(2) INS' efforts to improve the employment verification process,
(3) the level of effort INS and Labor devoted to worksite
enforcement activities and the results of these activities, and
(4) changes being made to INS' worksite enforcement program.

To determine the effectiveness of the current employment
verification process, we reviewed previous reports by us and
others, such as the Commission on Immigration Reform and other
immigration researchers. In addition, we held discussions with
INS, Labor, and SSA officials and analyzed data from INS' Employer
Sanctions database to obtain INS statistics on the use of
fraudulent documents by unauthorized aliens.

To determine what actions INS had undertaken to improve the
employment verification process, we held discussions with and
obtained documents from INS, SSA, Labor, and OSC officials. Using
a data collection instrument, we surveyed worksite enforcement
unit supervisors representing 32 of INS' 33 districts who attended
a national worksite enforcement conference in San Diego in June
1998. We also contacted representatives of four national
organizations representing business owners or employee unions to
discuss their views on INS' efforts to improve the employment
verification process.

To determine the extent of INS' activities in worksite enforcement
and the results of these activities, we analyzed INS budget data,
workload data from INS' Employer Sanctions database, and responses
provided by the 32 INS worksite enforcement unit supervisors who
responded to our survey. In addition to surveying these
supervisors about their offices' coordination with Labor, we also
surveyed Labor officials from 10 districts in states with a high
number of unauthorized aliens about their enforcement activities
and coordination with INS. We also analyzed Labor workload data to
determine the extent to which Labor referred cases to INS for
investigation, and we conducted structured telephone interviews
with state labor officials in six states to determine the extent
to which they coordinated their role with INS. Objectives, Scope,
and

Methodology

B-278845 Page 9 GAO/GGD-99-33 Unauthorized Employment of Aliens

To identify changes being made to INS' worksite enforcement
program, we reviewed INS strategy documents, attended INS meetings
in which INS officials explained worksite enforcement program
changes, and discussed a draft of INS' interior enforcement
strategy with INS headquarters and regional officials.

We discussed the strengths and limitations of INS' automated
workload data with INS headquarters officials and with
investigators at the local level, but we did not independently
verify the validity of the data. These officials indicated that
the data could be used to accurately portray trends over time. See
appendix II for a more complete description of our objectives,
scope, and methodology.

We did our work from December 1997 through March 1999 in
accordance with generally accepted government auditing standards.
We requested comments on a draft of this report from the Attorney
General, Secretary of Labor, and Commissioner of Social Security.
Justice and SSA provided written comments, which are summarized at
the end of this letter. Justice's written comments are contained
in appendix III. Labor did not provide comments.

The employment verification process can be easily thwarted by
fraud. Large numbers of unauthorized aliens have either
fraudulently used valid documents that belong to others or
presented counterfeit documents as evidence of employment
eligibility. As a result, unauthorized aliens have been able to
circumvent the current employment verification process, thereby
making it difficult for employers who are willing to comply with
the law by hiring only authorized workers to do so.

Various studies have pointed out that fraudulent documents are
largely responsible for the ineffectiveness of the employment
verification process. For example, we reported in 1990 that the
prevalence of fraudulent documents threatened to undermine the
employment verification process and the system needed improvement.
9 In its 1997 report to Congress, the Commission on Immigration
Reform reiterated its 1994 conclusion that the single most
important step that could be taken to reduce unlawful migration
was the development of a more effective system for verifying work
authorization. It noted that the widespread availability of
fraudulent documents makes it easy for unauthorized aliens to
obtain jobs. Similarly, INS has noted that the proliferation of
inexpensive fraudulent documents

9 GAO/GGD-90-62. Fraudulent Documents

Have Undermined the Effectiveness of INS' Employment Verification
Process

B-278845 Page 10 GAO/GGD-99-33 Unauthorized Employment of Aliens

makes it almost impossible for employers to ensure employment to
only authorized workers.

Our analysis of INS data showed that large numbers of unauthorized
aliens have used fraudulent documents to obtain employment.
Between October 1, 1996, and May 29, 1998, INS completed about 9,
600 employer investigations that were based on leads from various
sources, such as the public or other agencies. In about 3,500
investigations (or 36 percent) INS reported that about 78,000
fraudulent documents pertaining to about 50,000 unauthorized
aliens were used to obtain employment. In about 2, 100 (or 60
percent) of the 3, 500 investigations in which INS found
fraudulent documents, INS determined that the employer had
complied with the employment verification process and did not
knowingly hire unauthorized aliens, but that unauthorized aliens'
use of fraudulent documents circumvented the process. In the other
1,400 (or 40 percent) of the 3,500 investigations involving
fraudulent documents, INS decided to fine the employer, take no
action against the employer for various reasons (e. g., the
employer went out of business), or issue the employer a warning
notice. Of the 78,000 fraudulent documents identified, about 60
percent were INS documents, such as permanent resident cards;
about 36 percent were Social Security cards; and about 4 percent
were other documents, such as drivers' licenses. These documents
were either counterfeit documents or genuine documents used
fraudulently to obtain employment.

Large- scale counterfeiting of employment eligibility documents
has reportedly made such documents widely available. According to
a January 1997 Justice Office of Inspector General (OIG) audit
report, on the basis of a review of 30 INS fraud cases in 5 INS
district offices, INS confiscated nearly 300,000 counterfeit
documents. 10 Nearly all of these counterfeited documents were
confiscated in Los Angeles. In May 1998, INS seized more than
24,000 counterfeit Social Security cards in Los Angeles after
undercover agents purchased 10,000 counterfeit INS permanent
resident cards from a counterfeit document ring. In November 1998,
INS seized more than 2 million counterfeit documents in Los
Angeles, including INS permanent resident cards, Social Security
cards, and drivers' licenses from various states. According to
INS, these counterfeit documents were headed for distribution
points around the country.

10 Immigration and Naturalization Service Replacement of Resident
Alien Identity Cards, U. S. Department of Justice, Office of
Inspector General, Audit Report 97- 06, January 1997. The OIG
selected a judgmental sample from INS investigations that were
conducted between 1990 and 1995 involving major counterfeit
document seizures in Atlanta, Chicago, Los Angeles, Miami, and New
York.

B-278845 Page 11 GAO/GGD-99-33 Unauthorized Employment of Aliens

The 1996 Act mandated INS to test three pilot programs in which
employers use computer technology to verify employees' eligibility
to work. INS has one of the three pilot programs under way, but,
reportedly, reluctance on the part of some employers to
participate in the pilot has made it difficult for INS to meet its
enrollment goal. Also, in accordance with the 1996 Act, INS has
removed some documents from the list of those that can be
considered by employers, but this still leaves 27 acceptable
documents that employees can use for employment verification
purposes. To give employers confidence in the integrity of certain
INS documents, INS has begun issuing documents more resistant to
tampering and counterfeiting to lessen the potential of fraudulent
document use. However, opportunities still exist for unauthorized
aliens to use fraudulent documents because alien employees are
statutorily permitted to present documents other than INS- issued
documents to demonstrate employment eligibility, and these may
have fewer security features.

As mandated in the 1996 Act, INS is testing or expects to test
three programs to make it possible for employers to electronically
verify an employee's eligibility to work. The 1996 Act allows the
pilots to last up to 4 years; generally, employer participation in
these pilot programs is voluntary. Under the first pilot, called
the Basic Pilot, the employer is to verify the employment
eligibility of all new hires, regardless of citizenship status, by
querying an SSA database containing the names of all individuals
with Social Security numbers. If the SSA database cannot confirm
employment eligibility and the employee indicated that he or she
is not a citizen or national of the United States, an employer
would then query INS' database containing the names of all of
those individuals to whom INS has issued alien numbers. Employers
in the five states with the highest estimated numbers of illegal
aliens California, New York, Texas, Florida, and Illinois are
eligible to participate in the Basic Pilot. As of November 1998,
1,341 employers had signed up to participate in the Basic Pilot.

Under the second pilot, called the Citizen Attestation Pilot,
employers are to verify with the INS database only those newly
hired employees who claim to be aliens. The 1996 Act limits this
pilot to states that meet specific requirements for issuing
drivers' licenses and identity documents. INS plans to test the
Citizen Attestation Pilot in Arizona, Massachusetts, Maryland,
Michigan, and Virginia.

The third pilot, called the Machine- Readable Document Pilot, is
to verify all new employees who present a driver's license or
identification document that contains a machine- readable SSN. INS
plans to test the Machine- Readable Document Pilot only in Iowa
because it is the only state INS Is Taking Steps to

Improve Verification Process, Yet Considerable Obstacles Remain

INS Has Had Difficulty in Meeting Its Pilot Program Enrollment
Goal

B-278845 Page 12 GAO/GGD-99-33 Unauthorized Employment of Aliens

with a machine- readable SSN, name, and date of birth on its
drivers' licenses or identification cards.

Even before mandated to do so, INS was testing electronic
verification. In 1995, INS began testing electronic verification
systems similar to the Basic and Citizen Attestation Pilots. As of
November 1998, 1, 178 employers participated in these pre- 1996
Act pilots.

INS' original goal was to have 16,000 employers enrolled in all of
its pilot programs by the end of fiscal year 1999. However, INS
has had difficulty in meeting this enrollment goal. As of November
1998, INS had enrolled 2, 519 employers, or about 16 percent of
its goal. Some employers are reportedly reluctant to participate
in the pilots because of concern that participation may have a
negative economic impact on their businesses. According to
officials with whom we spoke from INS, Labor, and SSA, employers
in some industries believe that in the current tight labor market,
they would not have enough authorized workers applying for jobs if
they participated in a verification pilot. The employers
reportedly fear that they could be put at a competitive
disadvantage because employees rejected by the verification system
might go to work for competitors who are not enrolled in a pilot.
In addition, according to INS officials, some employers are
reluctant to participate because (1) they do little hiring, (2)
illegal alien employment is not a problem in their industry, or
(3) they fear participating will bring additional INS scrutiny (e.
g., a Form I- 9 inspection). Also, INS believes some multistate
employers that want to consolidate verification operations to one
location are reluctant to participate because they cannot comply
with the 1996 Act's statutory requirement that verification be
completed within 3 days after an employee is hired.

According to INS officials, INS' failure to meet its enrollment
goal was affected primarily by employer reluctance to participate
in the pilots and not by the fact that two pilot programs have not
yet been implemented. As a result of its difficulty in recruiting
participants for its Basic Pilot, INS has adjusted its enrollment
goal. INS plans to reduce its employer enrollment goal for fiscal
year 1999 from the original 16,000 to 5,000.

The 1996 Act required the Attorney General to widely publicize the
pilot programs and required INS district offices in which pilot
programs are to be implemented to assist those employers wishing
to participate. INS' Internet World Wide Web site has information
about the pilots, and INS officials told us they have presented
information about the pilots at various employer association
meetings. In addition, according to these officials,

B-278845 Page 13 GAO/GGD-99-33 Unauthorized Employment of Aliens

each of the 12 INS districts in which the Basic Pilot is operating
has an INS liaison officer who is responsible for conducting
outreach activities, such as conducting employer seminars to
explain the pilots. In responding to our survey on how active
their districts' outreach efforts have been, 8 of the 12 worksite
unit supervisors indicated that the efforts have been somewhat
active, 2 indicated very active, and 2 indicated not active at
all.

Other federal and state agencies, such as Labor and state labor
agencies, have contact with employers who might be interested in
INS' pilot programs. These agencies did not have a formal role in
informing employers about INS' pilot programs and generally said
they did not do so. For example, officials from 7 of the 10 Labor
offices we contacted stated that they did not inform employers
about INS' pilot programs. In addition, neither the informational
material for employers that OSC provided us nor OSC's Web site
mentioned INS' pilot programs. In addition, none of the
representatives from the six state labor agencies we contacted
said their agencies distributed information about INS' pilot
programs, although all of the representatives said they would be
willing to do so. Officials in charge of INS' pilot programs
stated that INS has contracted with a public relations firm to
conduct more extended outreach about the pilot programs. In
December 1998, the contractor submitted the strategy for the
outreach campaign, which is set to begin in April 1999.

Although electronic verification could be an improvement over the
current verification process, it also has limitations. For
example, an unauthorized alien could use the documents of an
authorized worker and thereby circumvent the process. In May 1998,
INS selected two contractors to conduct an evaluation of the
effectiveness of its pilot programs in preventing unauthorized
alien employment and ensuring authorized workers do not encounter
discrimination. According to INS' Director of Research, as of
December 1998, the evaluation plan was under development.

Various studies of IRCA's employment verification process have
advocated that the number of documents that employees can use to
demonstrate employment eligibility should be reduced to make the
employment verification process more secure and to reduce employer
confusion. For example, in 1990, we reported that the multiplicity
of documents contributed to (1) employer confusion about how to
comply with the employment verification requirements and (2)
discrimination against authorized workers. 11 INS first published
a proposed rule to reduce the

11 GAO/GGD-90-62. Little Progress in Reducing

the Number of Acceptable Documents

B-278845 Page 14 GAO/GGD-99-33 Unauthorized Employment of Aliens

number of documents that can be used to demonstrate employment
eligibility in 1993.

The 1996 Act mandated that four documents be eliminated from the
statutory list of acceptable documents that can be used to
demonstrate employment eligibility. 12 However, the Attorney
General retained her authority to add documents to the list as
specified in the statute under certain circumstances. At the time
of the 1996 Act's enactment, 29 acceptable documents were
designated by regulation.

In September 1997, INS issued an interim rule (1) eliminating four
documents from the list of documents that establish both identity
and employment eligibility, (2) redesignating one document that
the 1996 Act removed (using the Attorney General's authority to
designate additional documents), and (3) limiting the use of
another document. The interim rule also added two new types of
receipts that an individual can present in lieu of an acceptable
document from the list. According to INS, the purpose of the
interim rule was to maintain the status quo as much as possible
until INS completed a separate rulemaking proceeding that would
make comprehensive changes to the employment verification process,
a further reduction in the number of acceptable documents, and a
revision to the Form I- 9. 13

In February 1998, INS issued proposed regulations that would cut
the number of documents by half. The rule proposed maintaining the
number of documents that establish both identity and employment
eligibility at 8, and reducing the number of documents that
establish (1) identity only, from 12 to 3 documents, and (2)
employment eligibility only, from 7 to 3 documents. According to
an INS official, INS received about 70 comments on the proposed
regulations. Some of the comments have caused INS to revisit
several issues related to the documents INS planned to eliminate
from the list. According to this official, INS does not know when
the proposed regulations will be finalized. As of February 1999,
employees

12 The 1996 Act mandated the elimination of the Certificate of
United States Citizenship, the Certificate of Naturalization, an
unexpired foreign passport with an endorsement that identifies
employment eligibility, and a birth certificate from the list of
acceptable documents.

13 In response to the 1996 Act, the interim rule eliminated the
Certificate of United States Citizenship and Certificate of
Naturalization; restricted the use of an unexpired foreign
passport; and, due to public concerns, designated the use of a
birth certificate until completion of a separate rulemaking
procedure. INS also eliminated two other documents, the Refugee
Travel Document and the Re- entry Permit. However, INS has made
changes to the list since the previous regulations were issued. It
designated a new document that will eventually replace another
document already on the list. The net effect of the interim rule
was to reduce the number of documents that established identity
and employment eligibility from 10 to 8 documents.

B-278845 Page 15 GAO/GGD-99-33 Unauthorized Employment of Aliens

could still use 27 different documents to demonstrate their
authorization to work.

INS has taken steps to increase the integrity of the documents it
issues to reduce fraudulent document use and make it easier for
employers to verify the authenticity of the cards they review. For
example, in February 1997, INS began issuing a new Employment
Authorization Document containing visible security features, such
as a hologram. In April 1998, INS also began issuing a new version
of the card for lawful permanent resident aliens. In addition to a
hologram, the card contains other visible security features, such
as a digital photograph and fingerprint images.

However, there will still be ample opportunities for unauthorized
aliens to use fraudulent documents to obtain employment. INS plans
to replace previous versions of the permanent resident cards
issued between 1989 and 1998 with the new version as these cards
expire. It could take up to 10 years before all previous versions
are replaced. Cards issued from 1977 to 1989 have no expiration
date and will remain valid until INS replaces them. This means
that existing versions, which are more susceptible to
counterfeiting, could still be used fraudulently to obtain
employment. Also, statute allows alien employees to present
various documents other than the INS documents to demonstrate they
are authorized to work in this country. Therefore, unauthorized
aliens seeking employment can circumvent the improved security
features of INS documents by simply presenting non- INS documents
such as Social Security cards to employers. Documents such as the
Social Security card do not contain enhanced security features at
the level of those contained in the new INS cards, and, as
previously noted, counterfeit Social Security cards were reported
to be widely available. Although SSA has developed several
prototype counterfeit- resistant cards as required by the 1996
Act, according to an SSA official, SSA had no plans to replace the
existing card with one that contains enhanced security features.

Enforcing the employer sanctions provisions of IRCA will continue
to be important because no verification system is foolproof,
unauthorized aliens can still use fraudulent documents to
circumvent the employment verification process, and not all
employers may want to comply with the law. INS has devoted a
relatively small percentage of its enforcement resources to
worksite enforcement. As a result, the number of employer
investigations INS has conducted yearly is only a fraction of the
estimated number of employers who may have hired unauthorized
aliens. To efficiently use its limited worksite enforcement
resources, INS has intended to target its investigative efforts on
15 industries with a history of Increasing Document

Integrity INS and Labor Worksite Enforcement Efforts Have Been
Limited

B-278845 Page 16 GAO/GGD-99-33 Unauthorized Employment of Aliens

using unauthorized labor. During a recent 20- month period, INS
conducted about 60 percent of its investigations in targeted
industries and about 40 percent in nontargeted industries. Despite
a formal agreement that was in effect from June 1992 to November
1998 that sought to enhance cooperation and coordination between
Labor and INS, Labor provided limited assistance and had rarely
referred employers suspected of hiring unauthorized aliens to INS.
Labor is concerned that because most of its investigations are
based on employee complaints, actively assisting INS with
immigration- related worksite enforcement could reduce employees'
willingness to report employer workplace violations to Labor, thus
adversely affecting its ability to enforce labor standards. A new
agreement signed November 23, 1998, limited this assistance even
further.

Relative to other enforcement programs in INS, worksite
enforcement has received a relatively small portion of INS'
staffing and enforcement budget. INS' overall enforcement budget
grew by about 130 percent between fiscal years 1994 and 1998, from
about $1 billion to nearly $2. 4 billion. However, INS'
Investigations budget, which includes worksite enforcement,
increased about 62 percent during this same period. Most of the
increased enforcement funding was directed at the southwest
border, where a buildup of about 4,000 border patrol personnel was
intended to prevent illegal alien entry.

From fiscal years 1994 to 1998, the amount of time that INS
personnel spent on all enforcement programs increased from about
12,000 workyears to about 18,800, an increase of about 57 percent.
During this same period, the amount of time that INS personnel
spent on worksite enforcement increased about 28 percent, from 243
to 311 workyears. 14 These increases notwithstanding, INS
consistently devoted about 2 percent of its enforcement workyears
to worksite enforcement during this period. (Fig. 1 shows the
percentage of time that INS devoted to its enforcement programs in
fiscal year 1998.)

14 We could not determine a specific dollar amount spent on
worksite enforcement activities because, according to INS
officials, INS does not track expenditures within the
Investigations budget. INS uses staff workyears reported through
its Performance Analysis System to determine the level of effort
devoted to specific investigative activities. Worksite workyears
include time spent by Investigations agents only. INS Assigned a
Relatively

Small Portion of Its Resources to Worksite Enforcement

B-278845 Page 17 GAO/GGD-99-33 Unauthorized Employment of Aliens

Note: For the major INS enforcement programs, fiscal year 1998
workyears are budget amounts. Actual workyear data for these
programs were not available at the time of our review. a Includes
actual time spent by INS agents and support staff on
investigations that target employers

who are suspected of hiring unauthorized workers. b Includes all
other investigations (other than employers), such as criminal
aliens, drug trafficking,

fraud, smuggling, and immigration status violations. Source: GAO
analysis of INS data.

The number of employer investigations INS is able to conduct each
year covers only a fraction of the estimated number of employers
who may have unauthorized aliens. As previously noted, the results
from INS' inspection of a random sample of the nation's 6.5
million employers in fiscal year 1997 indicated that about 195,000
employers had employed unauthorized aliens. In fiscal year 1998,
INS' worksite investigators completed about 6,100 lead- driven
investigations 15 and about 400 compliance audits 16 for a total
of about 6,500 investigations, which equated

15 These investigations were opened in response to a complaint by
the public or a referral by another agency. 16 Each year from
fiscal year 1989 through fiscal year 1998, INS headquarters
selected for inspection a random sample of the nation's employers
to determine a nationwide employer compliance rate with

Figure 1: INS Enforcement Program Workyears for Fiscal Year 1998

B-278845 Page 18 GAO/GGD-99-33 Unauthorized Employment of Aliens

to about 3 percent of the estimated number of employers of
unauthorized aliens.

According to worksite program officials, significantly increasing
the funding for and staff assigned to worksite investigations may
not significantly reduce unauthorized alien employment. Even with
a two- or three- fold increase in staffing levels, INS would still
only be able to investigate a small portion of the estimated
number of employers who may have unauthorized aliens and remove
only a fraction of the estimated number of unauthorized alien
workers. According to these and other INS officials, most
employers want to comply with the law and not hire unauthorized
aliens. Therefore, the increased use of electronic verification by
those who may be unknowingly hiring unauthorized aliens would
permit INS to concentrate its limited enforcement staff on those
who knowingly violate the law.

To best use its limited worksite enforcement staff, INS' priority
has been to target for investigation employers in specific
industries, such as farming, construction, apparel, hotels and
motels, and eating and drinking places that historically have had
a high probability of violations. However, of the approximately
11,000 cases opened between October 1996 and May 1998, about 43
percent were opened in industries other than those targeted. About
38 percent of the 11,000 cases were in 2 of the targeted
industries, eating and drinking places (about 31 percent) and
hotels and motels (about 7 percent). According to INS' worksite
enforcement program officials, despite their intent to target
employers in certain industries, INS opened most investigations on
the basis of the leads it received, not by industry.

The INS and Labor agreement that was in effect between June 1992
and November 1998 called for the agencies to work together, but at
the same time, limited how far Labor would go in cooperating and
coordinating with INS. As a result, Labor had provided little
assistance to INS in identifying employers suspected of hiring
unauthorized workers. A new agreement signed on November 23, 1998,
limits Labor assistance even further.

In June 1992, officials from INS and Labor's Employment Standards
Administration signed a memorandum of understanding that was
intended to, among other things, foster cooperation and
coordination between INS

IRCA's employment verification provisions. INS discontinued this
annual program, called the General Administrative Plan, beginning
with fiscal year 1999, to make what it considers more efficient
use of its limited enforcement resources. We used the fiscal year
1997 compliance results to determine the estimated number of
employers who may have unauthorized aliens because complete fiscal
year 1998 data were not available at the time of our review.
Labor's Activities Are

Limited to Reviewing Employers' Compliance With Paperwork
Requirements

B-278845 Page 19 GAO/GGD-99-33 Unauthorized Employment of Aliens

and Labor, clarify the enforcement role of each agency, and ensure
more efficient use of resources. The memorandum called for the
cross training of staff, sharing of automated information, and
conducting of joint activities when appropriate. Labor was to
review employer compliance with the employment verification
requirements during the course of its own investigations. Since
Labor visited many more worksites in connection with its own
mission than INS resources would permit, Labor's inspections were
to bolster INS' coverage of worksites.

In the memorandum, Labor agreed to make prompt referrals to INS of
employers suspected by Labor to have knowingly hired unauthorized
aliens. However, the memorandum also stated that Labor will take
no action which will compromise its ability to carry out its
fundamental mission, regardless of the workers' immigration status
(underlining added). Labor officials told us that they have
interpreted this to mean that if Labor investigators delve into
worksite immigration matters, beyond reviewing Form I- 9s, it
could have a detrimental effect on Labor's primary mission of
enforcing worker protection laws. A Labor official told us that
about 70 percent of Labor's investigations are based on worker
complaints. Labor initiates the other 30 percent of its
investigations. If employees perceived that Labor investigators
were trying to determine their immigration status and possibly
report those who may be unauthorized to INS, it would have a
chilling effect on employees' willingness to report workplace
violations.

Labor's concern with preserving the integrity of its mission-
related investigations has prevented Labor investigators from
carrying out all of the provisions of the memorandum with INS. For
example, although the agreement calls for Labor to make prompt
referrals of employers suspected of knowingly hiring unauthorized
aliens, Labor field officials told us that they do not conduct any
investigative activities to determine whether employees may be
unauthorized. The Labor Field Operation Handbook states that the
role of Labor investigators does not include investigating beyond
the records (e. g., interviewing employees for I- 9 purposes).
Instead, Labor's assistance to INS has primarily been in the form
of reviewing employers' Form I- 9 paperwork and providing the
results to INS. Even in this area, Labor has decreased its
activity, although not because of any conflict in mission. The
percentage of inspections in which Labor investigators did not
determine whether employers were in compliance with Form I- 9
paperwork requirements increased from 13 percent of Labor
inspections in fiscal year 1990 to 26 percent in fiscal year 1998.
According to Labor officials, the increase has been due, in part,
to the shortened time that investigators spend at worksites. In
many cases,

B-278845 Page 20 GAO/GGD-99-33 Unauthorized Employment of Aliens

these officials stated, investigators complete their inspections
and leave worksites within 3 days. Since regulations require that
employers be given 3 days' advance notice before their Form I- 9s
will be reviewed, Labor investigators are frequently gone from
worksites by the time employers are required to make their Form I-
9s available for review.

Labor has referred few employers suspected of hiring unauthorized
workers to INS. Of the over 367,000 employer Form I- 9 reviews
that Labor conducted between fiscal years 1988 and 1998, Labor
data showed it referred to INS 236 employers it suspected of
having unauthorized aliens. Further, according to Labor and INS
field officials, the agencies have undertaken few cooperative
efforts, such as cross training, sharing data, or conducting joint
investigations.

On November 23, 1998, the INS Commissioner and Labor's Assistant
Secretary, Employment Standards Administration, signed a new
Memorandum of Understanding. Similar to the 1992 agreement, the
purpose of the new agreement is to foster appropriate cooperation
and coordination between INS and Labor. In addition, the agreement
is intended to enhance worksite enforcement of employer sanctions
and labor standards to reduce the employment of unauthorized
workers in the United States. According to the agreement,
unauthorized workers' willingness to accept substandard wages and
working conditions provides opportunities for some employers to
hire unauthorized aliens. INS and Labor officials told us and the
agreement suggests that unauthorized aliens are a source of cheap
labor, and that their employment leads to the degradation of
overall workplace conditions.

Under this agreement, however, Labor will significantly reduce its
reviews of employer compliance with IRCA's employment verification
procedures. Labor will no longer review employer compliance with
the employment verification procedures in investigations stemming
from complaints, which account for about 70 percent of all Labor
investigations. Labor will only review employer compliance in
noncomplaint- driven investigations. The agreement calls for Labor
to refer to INS all suspected serious violations, such as the use
of fraudulent documents to obtain employment or employers'
knowingly hiring unauthorized aliens, but only in noncomplaint-
driven investigations.

The agreement is intended to avoid discouraging unauthorized
workers from complaining about labor standards violations out of
fear of the possible consequences, such as apprehension and
possible removal by INS. According to Labor officials, there is a
misperception among the

B-278845 Page 21 GAO/GGD-99-33 Unauthorized Employment of Aliens

immigrant working community, actively promoted by those who do not
want employees to cooperate with Labor, that cooperating with
Labor will automatically result in an INS inspection. As a result,
according to these officials, Labor investigators have had
increasing difficulty in getting employees to cooperate with them.
The new agreement is meant to correct this misperception so those
workers understand that Labor will not report the results of any
of its complaint- driven investigations to INS. Labor officials
told us that they hoped the new agreement would result in more
employee cooperation, thereby enabling Labor to better enforce
workplace labor standards. INS worksite program officials told us
that they believe the new agreement may create more barriers to
enforcing employer sanctions and reducing unauthorized alien
employment. For example, the agreement does not require Labor to
refer to INS any serious violations Labor investigators may
encounter during investigations that are based upon complaints.

In contrast to this new agreement, the U. S. Commission on
Immigration Reform has advocated that Labor take a more active
role in employer sanctions enforcement. In its 1997 report, the
Commission stated that Labor's participation in verifying that
only authorized workers are hired should be seen as integral to
its mission of protecting U. S. workers. It recommended that Labor
be responsible for verifying employer compliance with the
employment verification requirements.

The results from INS' worksite enforcement program have been
modest. Although a major INS goal was to investigate employers
that it believed intentionally hired illegal workers and were
major violators and/ or abusive employers, 83 percent of the INS
lead- driven workplace investigations resulted in no employer
sanctions. Our examination of about 800 closed cases with the most
complete data available, revealed that INS had collected about
$2.5 million, or about one- half of the $4.9 million that
employers had been ordered to pay.

Overall, INS arrested about 27, 500 unauthorized workers during
the course of its worksite investigations, including about 12,700
at the worksites of employers found to be in compliance with the
Form I- 9 requirements. Because of INS data limitations, we could
not determine how many of these aliens were subsequently released,
how many were placed into deportation hearings, and how many were
removed from the country. However, INS said that in light of
limited detention capacity, the 1996 Act's requirement that INS
detain virtually all criminal aliens gives INS less flexibility to
detain noncriminals. INS Worksite

Investigation Efforts Produced Modest Results

B-278845 Page 22 GAO/GGD-99-33 Unauthorized Employment of Aliens

The Government Performance and Results Act, Public Law 103- 62,
requires agencies to prepare strategic plans and yearly program
performance goals. One of the goals in Justice's September 1997
Strategic Plan was to reduce the incentives for unauthorized
employment by (1) focusing enforcement efforts in areas that have
a high probability of violation and (2) facilitating the
replacement of unauthorized workers with legal workers.

In line with these strategic goals, INS established a goal that
its worksite program would investigate employers who intentionally
hired unauthorized aliens, that is, substantive violators. To
measure its effectiveness in meeting this goal, INS set a goal
that 60 percent of all fines should be for substantive violations,
and that 146 criminal cases would be presented for prosecution.
Further, INS' worksite program was to serve as a catalyst for
lawful employment by causing as many as 38,507 jobs to be vacated
by unauthorized aliens and, therefore, made available for
authorized workers. This figure was to be calculated by adding the
number of unauthorized aliens INS arrested to the number that left
their job due to an INS enforcement action.

INS' priority in the worksite enforcement area has been to
investigate employers who intentionally hire illegal workers,
including prosecuting some employers for criminal violations.
However, over a recent 20- month period, INS found IRCA violations
and proposed to fine employers in less than 20 percent of the
investigations it completed. According to the most recent
nationwide data available from INS' Employer Sanctions database,
about 9,600 lead- driven employer investigations 17 were completed
between October 1, 1996, and May 29, 1998. 18 Of these
investigations, 17 percent were served with a Notice of Intent to
Fine (NIF) for IRCA violations.

About one- half of the fines proposed by INS were for paperwork
violations (i. e., for failing to complete or improperly
completing Form I- 9s), and onehalf were for substantive
violations (i. e., knowingly hiring or continuing to employ
unauthorized aliens). 19 In addition, INS found 49 percent of the

17 We omitted General Administrative Plan (GAP) cases from our
analyses of INS investigative efforts because we wanted to analyze
the results of districts' targeting efforts. GAP investigations
rarely resulted in fines (1 percent) or warnings (10 percent).

18 INS officials told us that the Employer Sanctions database was
likely to be more complete for cases completed after October 1,
1996. After this date, INS' priorities for worksite enforcement
emphasized accurate reporting of employer sanctions case activity.
We obtained a copy of the database as of May 29, 1998.

19 The INS official who provided us with the database told us that
agents in the field are instructed to report that an investigation
has resulted in a NIF only after district counsel has approved the
NIF and it had been served on the employer. According to the
Employer Sanctions database, 170 investigations (2 percent) were
categorized as NIFs, but there was no additional information on
the size of the proposed Worksite Program in

Relation to the Government Performance and Results Act

INS Proposed to Fine a Small Portion of Investigated Employers

B-278845 Page 23 GAO/GGD-99-33 Unauthorized Employment of Aliens

9,634 employers in compliance with paperwork requirements,
although this did not necessarily mean that the entire workforce
was authorized for employment. INS issued a warning notice to 13
percent of the 9, 634 employers 20 and took no action in 18
percent of the cases. 21 About 59 percent of the fines INS issued
in fiscal year 1998 were for substantive violations, nearly
meeting its goal of 60 percent.

In about 2 percent of the investigations, INS initiated criminal
proceedings against an employer. In its midyear review of its
fiscal year 1998 priorities, INS expressed concern that its
criminal case accomplishments were lagging. The emphasis on
criminal cases was intended to refocus worksite enforcement on the
most serious offenders. By the end of fiscal year 1998, INS had
presented 127 criminal investigations, about 87 percent of its
goal.

Figure 2 shows the results of INS' completed investigations during
the 20month period from October 1996 to May 1998.

fines or on whether the fines were assessed for paperwork or
substantive violations. This official believed that some of these
cases were misreported by agents in the field and advised us not
to count them as NIFs.

20 The use of warning notices was a policy decision adopted in
1987 as a matter of INS discretion. Warning notices are used when
INS believes an employer will come into compliance without a fine.
21 INS completed a case with a determination of no action when a
determination of compliance, warning, or fine could not be reached
for the following reasons: the business closed or changed owners
during the investigation; there were no employees; all alien
employees were hired before November 6, 1986; the case was
transferred to another INS office; the business was the subject of
a recent inspection; or INS had already opened an investigation on
this business.

B-278845 Page 24 GAO/GGD-99-33 Unauthorized Employment of Aliens

Note: Includes all lead- driven administrative investigations;
excludes random compliance investigations (n= 992). a Includes all
investigations where INS reported that a fine was assessed, but no
information was

reported on the type or size of the fine (n= 170); no
administrative disposition was recorded (n= 76); and a
determination of compliance, warning, or fine could not be
reached, for the following reasons: the business closed or changed
owners during the investigation; there were no employees; all
alien employees were hired before November 6, 1986; the case was
transferred to another INS office; the business was subject to a
recent inspection; or INS had already opened an investigation on
this business (n= 1, 730).

Source: GAO analysis of INS Employer Sanctions database.

According to INS program officials, several factors may have
affected INS' ability to achieve more significant results. For
example, the prevalent use of fraudulent documents makes it
difficult for INS to prove that an employer knowingly hired an
unauthorized alien. In addition, in the pursuit to meet numerical
program goals, such as identifying unauthorized aliens, districts
may have overemphasized the importance of removing aliens from the
workplace to the detriment of the program's overall goal to
investigate employers who knowingly violated the law.

Figure 2: Results of INS Investigations Completed Between October
1, 1996, and May 29, 1998

B-278845 Page 25 GAO/GGD-99-33 Unauthorized Employment of Aliens

INS data on the collection of employer sanctions fines are
limited, but the most complete data available showed that INS
collected about one- half of the amount that employers were
ordered to pay. During the period we examined, INS issued about
$13 million in NIFs to 1,655 employers. After INS issues a NIF,
the employer has an opportunity to negotiate the fine amount and
payment schedule with INS and may receive a smaller fine.
Following settlement discussions, INS issues a Final Order for the
amount of the fine. 22 Because this process may take some time to
complete, INS' Employer Sanctions database for the period we
examined did not contain complete data on the size of the Final
Orders negotiated between INS and employers, or the amount
collected from employers. 23 Therefore, to gain a better
understanding of INS' enforcement results, we only analyzed closed
cases with generally complete information. 24 We found that in
cases closed between October 1, 1996, and February 1, 1998, INS
issued NIFs against 833 employers for a total of $6.1 million.
Final Orders were issued against 794 employers for $4.9 million,
and a total of $2.5 million (or 51 percent of the amount ordered)
was collected. Reasons given by INS officials explaining why the
total amount due was not collected were the following: (1) the
employer went out of business; (2) the employer filed for
bankruptcy; (3) the employer died; or (4) the business moved, and
INS was unable to track down the employer.

In fiscal year 1998, INS identified 44,474 jobs held by
unauthorized workers, or about 15 percent above its fiscal year
1998 goal of 38,507 jobs. However, whether authorized workers
replaced these unauthorized workers as INS envisioned is unknown.
According to INS officials, INS does not generally follow up to
determine who is hired in positions that are vacated as a result
of an INS enforcement action. Also, the Employer Sanctions
database does not contain reliable information on the subsequent
disposition of aliens who are arrested in worksite enforcement
actions. 25 Thus, we could not determine how many of these aliens
were

22 Employers may also request a hearing with an administrative law
judge to contest the fine. 23 The OIG reported in 1996 that INS'
system for tracking and collecting fines needed improvement and
recommended that INS develop a better system for tracking
financial transactions. INS recently implemented a new system to
track the collection of employer sanctions fines. After February
1, 1998, INS no longer kept track of fine collections information
in the Employer Sanctions database.

24 INS considers a worksite case completed when an administrative
disposition of compliance, fine, warning, or no action has been
reached or a criminal case has been initiated. However, a case is
not considered closed until final action on the case is completed
and no further action is required by either the government or the
subject of the investigation to finally adjudicate the case.

25 An INS official told us that data reported on the subsequent
dispositions of arrested aliens were not reliable during the
period we examined. This official told us that INS has
subsequently revised the form used for data submission to collect
more reliable information on this data element. INS Collected a
Small

Portion of Assessed Fines Whether Unauthorized Aliens Were
Replaced by Authorized Workers Is Unknown

B-278845 Page 26 GAO/GGD-99-33 Unauthorized Employment of Aliens

placed into deportation hearings and how many were removed from
the country. In a 1995 INS Investigations review of the worksite
program, INS acknowledged that its inability to remove aliens
found illegally working in the United States eroded program
effectiveness. In its fourth quarter review of fiscal year 1998
performance, INS indicated that its detention beds are to be used
for mandatory criminal detainees in fiscal year 1999. This,
combined with a reduction in budgeted detention space, would
impede efforts to detain and remove unauthorized aliens. If
unauthorized aliens are not removed, it is possible that they may
obtain employment elsewhere, diluting INS' goal of making jobs
available for authorized workers.

INS arrested about 27,500 unauthorized aliens during the 9,600
worksite investigations it completed between October 1, 1996, and
May 29, 1998. These arrests were made in cases where INS
determined the employer complied with Form I- 9 paperwork
requirements as well as in cases where employers did not comply.
In over one- half of the 4,755 completed investigations in which
INS found that employers complied with Form I- 9 paperwork
requirements, on the basis of a review of employers' Form I- 9s,
INS also found that unauthorized aliens were present (see fig. 3).
INS arrested 12,698 unauthorized aliens in these worksites. In a
portion of cases, INS investigators could not arrest identified
unauthorized aliens because, for example, by the time the
investigators went back to the worksite to make arrests, the
aliens had left their jobs. According to INS officials, fraudulent
document use by unauthorized aliens made it difficult for
employers who complied with the Form I- 9 verification
requirements to avoid hiring unauthorized aliens. Officials also
told us that it was often difficult to prove that employers had
knowingly hired unauthorized aliens.

Figure 3 shows that in 82 percent of the 1,655 completed
investigations in which INS found employers to be noncompliant and
proposed to fine employers, INS found that unauthorized aliens
were present. INS arrested 7,055 unauthorized aliens in these
worksites. INS also arrested 7,739 unauthorized aliens in
investigations where INS initiated a criminal case, where
employers received warning notices, or where INS completed the
case with a determination of no action.

B-278845 Page 27 GAO/GGD-99-33 Unauthorized Employment of Aliens

Note 1: Figure does not include investigations that are completed
with the issuance of a warning notice; categorized as NIFs but
with no information on the size and type of the fine; or completed
without the determination of fine, warning, or compliance. The
figure also does not include cases with missing data regarding the
numbers of aliens arrested or identified.

Note 2: Identified refers to unauthorized aliens identified during
worksite operations, but not arrested. This category includes
unauthorized aliens identified through the I- 9 audit that left
employment, but were not arrested.

Source: GAO analysis of INS Employer Sanctions database.

Worksite investigations in targeted industries have proven only
slightly more productive than investigations in other industries
in terms of fines assessed, substantive fines assessed, and
unauthorized aliens arrested. In 5,265 targeted industries
investigations completed between October 1, 1996, and May 29,
1998, fines were assessed in 19 percent of the cases, and 58
percent of these fines were for substantive violations. In the
other 4,203 investigations of nontargeted industries, 26 fines
were assessed in 15 percent of the cases, and 47 percent of the
fines were for substantive violations. INS arrested unauthorized
aliens in 48 percent of the targeted

26 A number of cases (n= 166) contained no information on the
employer's industry code. These cases were omitted from this
analysis.

Figure 3: Percentage of Cases in Which Unauthorized Aliens Were
Arrested or Identified During INS Employer Worksite
Investigations, October 1, 1996, to May 29, 1998

INS' Investigations in Targeted Industries and High- Alien States
Were Slightly More Productive, but Results of Targeting Were Mixed

B-278845 Page 28 GAO/GGD-99-33 Unauthorized Employment of Aliens

industry investigations compared to 43 percent of the nontargeted
investigations. However, the extent to which INS assessed fines
and made arrests varied considerably among the targeted
industries.

INS fined a higher percentage of employers in certain targeted
industries than in others. For example, INS fined more than 20
percent of the employers in the industrial categories of eating
and drinking places (24 percent); miscellaneous food preparation,
including seafood preparation (28 percent); and apparel and
textile products (44 percent). In contrast, INS fined less than 10
percent of the employers in the industrial categories of hotels
and motels (5 percent); nursing homes, nursing care facilities (6
percent); and meat products and meat preparation (7 percent).
Table 1 summarizes the results of INS worksite investigations
completed over the 20- month period from October 1996 to May 1998.

Table 1 also shows that INS made arrests in certain targeted
industries at higher levels than others. For example, INS made
arrests in over 60 percent of the completed investigations in the
industrial categories of landscape and horticultural services (66
percent, 1,154 arrests) and miscellaneous food preparation (61
percent, 672 arrests). In contrast, INS made arrests in less than
30 percent of the completed investigations in the industrial
categories of hotels and motels (28 percent, 544 arrests) and
nursing homes, nursing care facilities (29 percent, 42 arrests).

B-278845 Page 29 GAO/GGD-99-33 Unauthorized Employment of Aliens

Fines a Arrests Type of industry b

Number of investigations

completed Percentage

assessed substantive fine

Percentage assessed paperwork fine

Percentage of investigations with

aliens arrested Number of aliens arrested Targeted industries 5,
265 11 8 48 14,434

Eating and drinking places 2,672 14 10 49 4,559 Hotels and motels
678 2 3 28 544 General building contractors 354 6 5 58 1,398
Apparel and textile products 343 32 12 55 2,643 Landscape and
horticultural services 293 7 8 66 1,154 Masonry, stonework, tile,
plaster, insulation 192 9 6 55 538 Roofing, siding, sheet metal
159 6 8 54 575 Services to dwellings, buildings (includes
janitorial) 139 4 9 34 462 General farm and field crops 99 4 6 57
468 Nursing homes, nursing care facilities 82 2 4 29 42
Miscellaneous food preparation (includes seafood) 81 16 12 61 672
Meat products, preparation 76 3 4 57 1, 135 Heavy construction
(not buildings) 70 6 4 33 152 Forestry 20 10 0 40 61 Farm labor
contractors and labor management services 7 0 0 43 31

Nontargeted industries 4, 203 7 8 43 12,649 Total 9,468 9 10 46
27,083

a Category does not include investigations reported as ending with
dispositions of Notice of Intent to Fine and where the Employer
Sanctions database had no information regarding the type of fine
assessed. b Does not include investigations where no standard
industry code was recorded (n= 166).

Source: GAO analysis of INS Employer Sanctions database.

INS' worksite priorities also call for investigating employers who
knowingly hire unauthorized aliens in those geographic areas that
have traditionally employed unauthorized aliens. Investigations in
the seven states with the highest number of estimated illegal
alien residents as of October 1996 27 were slightly more
productive than investigations in the rest of the country. The
5,202 worksite investigations in the high- alien states resulted
in fines in 20 percent of the cases, and 54 percent of these were
for substantive violations. The 4,432 worksite investigations in
the other

27 See INS Releases Updated Estimates of U. S. Illegal Population
(Washington, D. C.: U. S. Immigration and Naturalization Service
News Release, Feb. 1997). These states are California, Texas,
Florida, New York, Illinois, New Jersey, and Arizona.

Table 1: Results of INS Worksite Investigations Completed in
Targeted and Nontargeted Industries, October 1996  May 1998

B-278845 Page 30 GAO/GGD-99-33 Unauthorized Employment of Aliens

states resulted in fines in 14 percent of the cases, and 54
percent of the fines were for substantive violations. A total of
16,048 unauthorized aliens were arrested in cases in the 7 high-
alien states, and a total of 11,444 unauthorized aliens were
arrested in cases in the other states.

INS' approach to how it will enforce IRCA's employer sanctions
provisions is changing. In January 1999, INS issued an Interior
Enforcement Strategy. According to the strategy, the primary
strategic goal of INS' interior enforcement is to reduce the size
and annual growth of the illegal resident population. The strategy
established the following five strategic priorities:

 identify and remove criminal aliens;

 deter, dismantle, and diminish smuggling or trafficking of
aliens;

 respond to community complaints about illegal immigration;

 minimize immigration benefit fraud; and

 block and remove employers' access to unauthorized workers. With
respect to the strategy's second priority, INS law enforcement
efforts are to focus on disrupting and dismantling the criminal
infrastructure that encourages and benefits from illegal
migration, such as alien smugglers and counterfeit document
producers. According to an INS official, INS expects that its new
emphasis on dismantling the criminal infrastructure that supports
unauthorized employment will result in (1) fewer worksite
investigations and removals of unauthorized aliens from the
workplace, (2) more criminal employer investigations, and (3)
heavier penalties.

With respect to the strategy's fifth priority to block and remove
employers' access to unauthorized workers, the INS official
responsible for drafting the strategy told us that INS will
continue using the worksite procedures outlined in the May 1998
directive to build relationships with employers to create an
effective deterrent to illegal immigration. Under the May
directive, which we previously described, INS' worksite
enforcement efforts are to be focused on employers, not
unauthorized aliens. By educating employers whom INS has found
through Form I- 9 and employment record reviews to have
unknowingly hired unauthorized aliens, INS expects that such
employers will be better able to comply with IRCA. This, in turn,
would enable INS to focus its limited worksite enforcement
resources on employers suspected of criminal activities. INS has
not specified how much resources it intends to devote to such
employer compliance efforts. According to an INS official, as of
March 1999, INS was in the process of developing implementation
plans for the strategic priorities. INS Is Changing Its

Approach to Worksite Enforcement

B-278845 Page 31 GAO/GGD-99-33 Unauthorized Employment of Aliens

The strategy calls for INS to prioritize and aggressively pursue
criminal investigation of employers who are flagrant or grave
violators. However, the strategy does not define flagrant or grave
violation. As previously discussed, INS' previous worksite
enforcement goal was similar, that is, to investigate employers
who were major violators. Yet, 83 percent of its investigations
resulted in no employer sanctions.

In the months preceding issuance of the final interior enforcement
strategy, worksite investigations field units had already begun
instituting new procedures in response to the anticipated strategy
changes. For example, an INS Central Region official told us
employer investigations are now focused on those employers who INS
believes may have committed criminal violations. Generally,
investigations in this region are not opened in cases where the
only allegation is the presence of unauthorized aliens. INS
worksite program officials told us that worksite enforcement units
in its other two regions continue to open investigations on the
basis of the perceived merit of the lead (e. g., a strong
allegation that there are unauthorized aliens at a business), even
if there is no indication that the employer is involved in
criminal activity.

INS plans to implement its new strategy over a 5- year period.
During fiscal years 1999 and 2000, INS expects its district
directors to conduct threat assessments and use intelligence
information to identify the most significant illegal alien
problems in their respective districts, including industries that
rely on unauthorized alien employment. Using this information, INS
plans to focus its enforcement efforts and resources in the
geographic areas and industries that have the most serious
problems with unauthorized alien employment.

The strategy does not clearly describe the specific measures INS
will use to gauge its performance. The strategy states that INS
will evaluate its performance on the basis of such things as
changes in the behavior or business practices of persons and
organizations. One possible measure INS lists for gauging
effectiveness in the worksite area is change in the wage scales in
certain targeted industries. However, INS has not yet specified
how wage scales will be measured; what constitutes a targeted
industry and the direction, magnitude, and timing of the expected
wage effect; and how INS plans to relate any changes to either its
enforcement efforts or other immigration- related causes.
According to the strategy, the specific performance measurements
within the context of the strategy will be developed in the annual
performance plans required by the Government Performance and
Results Act.

B-278845 Page 32 GAO/GGD-99-33 Unauthorized Employment of Aliens

Because INS is just beginning this new approach and is still
developing implementation plans, it is too soon to tell how or how
well INS will implement its strategy. It is also too soon to tell
what impact, if any, the new approach will have on dismantling the
infrastructure that supports illegal migration and employers'
access to undocumented workers.

INS faces significant obstacles to reducing unauthorized alien
employment. Although IRCA established a process for employers to
follow to verify employees' eligibility to work in the United
States, significant numbers of unauthorized aliens still obtain
employment because the process can be circumvented or easily
thwarted by fraud. Employers who want to comply with the law by
hiring only authorized workers can be deceived by unauthorized
aliens' use of widely available fraudulent documents. Other
employers who may seek cheap labor could intentionally hire
unauthorized aliens under the guise of having complied with the
employment verification requirements. In general, employers of
unauthorized aliens have faced little likelihood that INS would
(1) investigate them, (2) be able to prove that they knowingly
hired unauthorized aliens, (3) collect fines, or (4) criminally
prosecute them. Further, Labor's efforts to identify employers
suspected of hiring unauthorized aliens have been limited and
appear likely to be even more limited in the future.

Because enforcement measures can only go so far, we believe INS is
going in the right direction by testing electronic verification
procedures, proposing to significantly reduce the number of
authorization and identification documents, and making documents
more tamper resistant to try to improve the verification process.
However, obstacles, such as reluctance on the part of some
employers to participate in INS' electronic verification pilot
programs, have hampered INS' ability to improve the process.
Because tools such as electronic verification will be effective
with employers in industries with a history of reliance on
unauthorized aliens only to the extent that they use them, getting
such employers to participate in the electronic verification
pilots is important. Labor and other agencies that have contact
with employers generally have not augmented INS' outreach efforts
by disseminating information on the pilots.

In addition to these obstacles, INS' interior enforcement strategy
does not define the criteria for initiating investigations of
employers suspected of criminal violations, which is an
investigative priority. Having clear criteria is important if INS
is to effectively focus its limited staff to achieve its
enforcement goals and intended results. Conclusions

B-278845 Page 33 GAO/GGD-99-33 Unauthorized Employment of Aliens

We recommend that the INS Commissioner

 as part of the outreach program for INS' pilot programs, seek
assistance from federal and state agencies, such as the Department
of Labor and state labor agencies, in disseminating information to
employers about the programs and

 in implementing the interior enforcement strategy, clarify the
criteria for opening investigations of employers suspected of
criminal activities.

We requested comments on a draft of this report from Justice,
Labor, and SSA. On March 1, 1999, Justice's Assistant Attorney
General for Administration provided written comments addressing
its activities related to our two recommendations and two other
issues (see app. III).

With respect to our recommendation that INS seek assistance from
federal and state agencies in disseminating information to
employers about the employer verification pilot programs, Justice
agreed that more systematic coordination with other agencies could
be useful. Justice stated that it would add this type of
coordination effort to other recruitment efforts under way.
Justice did not agree, however, that it is appropriate at this
time to involve OSC in publicizing the verification pilot
programs. Justice's rationale was that the verification pilot
programs are still in the test stage, have not been evaluated for
their impact on immigration- related job discrimination, and might
pose a conflict of interest to OSC. That is, OSC's litigation
stance could be compromised if it were to challenge the employment
practices of employers it had informed about the pilot.

We continue to believe that OSC should assist INS in disseminating
information about the pilots. Our recommendation is not intended
to suggest that these agencies endorse the pilot programs. Indeed,
we agree that evaluative data are needed to determine the merits
of the programs. A sound evaluation, however, requires that a
sufficient number of employers volunteer to participate in the
pilots so that the results can be meaningfully analyzed and
interpreted. Agencies, including OSC, can make clear that by
providing information on verification pilot programs, they are
merely making employers aware of verification options, and not
endorsing the programs or making assurances that employers would
not be investigated or prosecuted if circumstances warrant it.

Our draft report, which was prepared before INS issued its final
interior enforcement strategy, recommended that the INS
Coimmissioner, in the final interior enforcement strategy, address
(1) the criteria for opening Recommendations

Agency Comments and Our Evaluation

B-278845 Page 34 GAO/GGD-99-33 Unauthorized Employment of Aliens

investigations of employers suspected of criminal activities and
(2) how INS will investigate employers against whom there have
been no allegations of criminal activities, but who may not be
complying with IRCA's requirements. Justice did not comment
specifically on this recommendation, but stated that since we
finished our data collection, INS had completed its interior
enforcement strategy.

INS issued its final interior enforcement strategy in January
1999. We reviewed the final strategy and made revisions to the
report to reflect the new information and the need to clarify the
criteria for opening investigations of employers suspected of
criminal activities. Also, the final strategy contains a strategic
priority to block and remove employers' access to unauthorized
workers that was not in the draft strategy. This priority and INS'
explanation on how it plans to implement it appears to address the
second part of our initial recommendation. Therefore, we deleted
this portion of the recommendation from this report.

Justice raised two other issues concerning our draft report.
First, Justice indicated that it does not favor a rule requiring
aliens to show only INSissued work authorization documents as
proof of employment eligibility, even if the INS documents are
more fraud resistant than other documents. Justice expressed the
concern that such a requirement could increase immigration-
related employment discrimination because some employers may
require foreign- looking U. S. citizens to present INS- issued
work authorization documents.

We are not suggesting that aliens be required to show only their
INS- issued work authorization document. Our intent is to point
out that, although INS has made progress in increasing the
integrity of some documents, the verification system can still be
undermined through fraudulent use of nonINS work authorization
documents. We revised this report to clarify this point.

Second, Justice characterized our draft report as suggesting that
a conflict exists between INS' and Labor's missions, whereas
Justice believes they are complementary. We agree with Justice
that the missions of the two agencies are complementary. As noted
in this report, however, Labor officials expressed concern that
using Labor investigators to identify and refer to INS workers who
may be unauthorized could deter unauthorized workers from
reporting labor standards violations, thus compromising Labor's
fundamental mission of rooting out employers who violate labor
standards. To the extent that this observation is true, our intent
was to point out the potential for such a conflict in certain
circumstances.

B-278845 Page 35 GAO/GGD-99-33 Unauthorized Employment of Aliens

We also received technical comments from Justice and SSA, and we
incorporated them in this report as appropriate. Labor did not
provide comments on the draft report.

We are sending copies of this report to the Honorable Janet Reno,
Attorney General; the Honorable Doris Meissner, Commissioner,
Immigration and Naturalization Service; the Honorable Alexis
Herman, Secretary of Labor; the Honorable Kenneth Apfel,
Commissioner, Social Security Administration; the Honorable Jacob
Lew, Director, Office of Management and Budget; and other
interested parties. We will also make copies available to others
upon request.

If you or your staff have any questions concerning this report,
please contact me on (202) 512- 8777. This report was done under
the direction of Evi L. Rezmovic, Assistant Director,
Administration of Justice Issues. Other major contributors are
listed in appendix IV.

Richard M. Stana Associate Director, Administration of Justice
Issues

Page 36 GAO/GGD-99-33 Unauthorized Employment of Aliens

Contents 1 Letter 38 Appendix I Employment Eligibility
Verification Form I- 9 and Current List of Acceptable Documents

41 Appendix II Objectives, Scope, and Methodology

43 Appendix III Comments From the Department of Justice

47 Appendix IV Major Contributors to This Report

Table 1: Results of INS Worksite Investigations Completed in
Targeted and Nontargeted Industries, October 1996  May 1998

29 Tables Figure 1: INS Enforcement Program Workyears for

Fiscal Year 1998 17

Figure 2: Results of INS Investigations Completed Between October
1, 1996, and May 29, 1998

24 Figure 3: Percentage of Cases in Which Unauthorized

Aliens Were Arrested or Identified During INS Employer Worksite
Investigations, October 1, 1996, to May 29, 1998

27 Figure I. 1: Employment Eligibility Verification Form I- 9 38

39 Figures

Figure I. 2: Current List of Acceptable Documents for Employment
Eligibility Verification

40

Page 37 GAO/GGD-99-33 Unauthorized Employment of Aliens

Contents

Abbreviations

INS Immigration and Naturalization Service IRCA Immigration Reform
and Control Act NIF Notice of Intent to Fine OIG Office of the
Inspector General OSC Office of Special Counsel SSA Social
Security Administration SSN Social Security number GAP General
Administrative Plan

Appendix I Employment Eligibility Verification Form I- 9 and
Current List of Acceptable Documents

Page 38 GAO/GGD-99-33 Unauthorized Employment of Aliens

(continued)

Figure I. 1: Employment Eligibility Verification Form I- 9

Appendix I Employment Eligibility Verification Form I- 9 and
Current List of Acceptable Documents

Page 39 GAO/GGD-99-33 Unauthorized Employment of Aliens

Appendix I Employment Eligibility Verification Form I- 9 and
Current List of Acceptable Documents

Page 40 GAO/GGD-99-33 Unauthorized Employment of Aliens

Note: For employment eligibility verification purposes, one
document from list A or one each from list A and B are required. a
For persons under age 18 who are unable to present a document
listed above.

Source: INS, List of Acceptable Employment Eligibility
Verification Documents for Form I- 9, under interim rules, as of
Sept. 30, 1997.

Figure I. 2: Current List of Acceptable Documents for Employment
Eligibility Verification

Appendix II Objectives, Scope, and Methodology

Page 41 GAO/GGD-99-33 Unauthorized Employment of Aliens

Our objectives were to determine (1) the effectiveness of the
current employment verification process in preventing employers
from hiring unauthorized aliens, (2) the Immigration and
Naturalization Service's (INS) efforts to improve the employment
verification process, (3) the level of effort INS and the
Department of Labor devoted to worksite enforcement activities and
the results of these activities, and (4) changes being made to
INS' worksite enforcement program.

To determine the effectiveness of the current employment
verification process, we reviewed research and analytic reports
that we issued and those issued by INS, the Department of
Justice's Office of Inspector General, Labor, the Commission on
Immigration Reform, and other immigration researchers. In
addition, we held discussions with INS, Labor, and Social Security
Administration (SSA) officials and analyzed data from INS'
database of employer sanctions cases to obtain INS statistics on
the use of fraudulent documents by unauthorized aliens.

To determine what actions INS had undertaken to improve the
employment verification process, we held discussions with and
obtained documents from INS, SSA, Labor, and Justice's Office of
Special Counsel for Immigration- Related Unfair Employment
Practices officials. Using a data collection instrument, we
surveyed INS managers, representing worksite enforcement units in
32 of INS' 33 districts, who attended INS' June 1998 national
worksite enforcement conference in San Diego. We asked respondents
questions about the availability of pilot programs, the extent to
which INS staff made efforts to enroll employers in the pilot
programs, and the level of interest in the pilots among employers
in their districts. We contacted representatives of four national
organizations representing business owners or employee unions to
discuss INS' pilot verification projects, among other issues. We
selected three of these organizations because they represented
business owners or employees in industries that INS targeted in
its worksite enforcement investigations. We selected the fourth
organization because it represented business owners in a wide
range of industries.

To determine the extent of INS' resources devoted to activities in
the worksite area, we analyzed INS budget data and workload data.
To determine the results of these worksite activities, we also
analyzed data from INS' database of employer sanctions
investigations. This database contains such information as the
business' name, address, location, industry code, owner name, and
number of employees. In addition, it contains information on the
predication for opening the investigation (i. e., whether the case
was lead- driven or randomly selected for a compliance

Appendix II Objectives, Scope, and Methodology

Page 42 GAO/GGD-99-33 Unauthorized Employment of Aliens

inspection); the investigation's administrative and/ or criminal
disposition (e. g., compliance, warning notice, notice of intent
to fine, or initiation of a criminal case); the number of
unauthorized aliens identified and arrested by INS; the number and
type of fraudulent documents identified by INS; the number and
type of violations by employers; the amount of civil monetary
penalties; and the amount collected by INS.

INS provided us with a CD- ROM containing information on its
employer sanctions investigations for the period of October 1,
1996, to May 29, 1998. We analyzed this time period because INS
officials told us that the database was likely to be more complete
and accurate for this period than for previous time periods.
According to these officials, starting in fiscal year 1997, the
INS priorities for worksite enforcement emphasized accurate
reporting of employer sanctions case activity. Also, we believed
that analyzing cases opened or completed after October 1, 1996,
would be more representative of INS' recent investigative
activities. We discussed the strengths and limitations of these
data with INS headquarters officials and with investigators at the
local level, but we did not independently verify the validity of
these data.

In our survey of INS worksite enforcement unit supervisors
(previously described), we also asked questions about the type and
extent of (1) worksite activities in the supervisors' districts
and (2) coordination with Labor and other federal and state
agencies. To further determine the extent of Labor's coordination
with INS, we conducted structured telephone interviews with Labor
officials from districts in Los Angeles; San Diego; Phoenix;
Houston, TX; Chicago; Miami, FL; Baltimore; Atlanta; northern New
Jersey; and New York. We selected these offices because they were
in the seven states with the highest reported number of illegal
aliens, based on INS data collected in 1996 (each state had an
estimated population of over 100,000 illegal alien residents), or
because INS worksite enforcement unit supervisors indicated they
had either good coordination or problems coordinating with Labor.
We also analyzed Labor workload data to determine the extent to
which Labor referred cases to INS for investigation and conducted
structured interviews with state labor officials from California,
Texas, Florida, Illinois, New York, and New Jersey to determine
the extent to which they coordinated their activities with INS.

To identify changes being made to INS' worksite enforcement
program, we reviewed INS strategy documents, attended INS meetings
in which INS officials explained worksite enforcement program
changes, and discussed these changes with INS headquarters and
regional officials.

Appendix III Comments From the Department of Justice

Page 43 GAO/GGD-99-33 Unauthorized Employment of Aliens

Appendix III Comments From the Department of Justice

Page 44 GAO/GGD-99-33 Unauthorized Employment of Aliens

Now on p. 13.

Appendix III Comments From the Department of Justice

Page 45 GAO/GGD-99-33 Unauthorized Employment of Aliens

Now on pp. 3, 11, and 15. Now on pp. 3, 16, and 18- 21.

Appendix III Comments From the Department of Justice

Page 46 GAO/GGD-99-33 Unauthorized Employment of Aliens

Appendix IV Major Contributors to This Report

Page 47 GAO/GGD-99-33 Unauthorized Employment of Aliens

Evi L. Rezmovic, Assistant Director Stuart M. Kaufman, Senior
Social Science Analyst Katherine M. Wheeler, Publishing Advisor
Charlotte A. Moore, Communications Analyst

Ann H. Finley, Senior Attorney Michael P. Dino, Evaluator- In-
Charge Tom Jessor, Senior Evaluator Nancy K. Kawahara, Senior
Evaluator Stacia Levenfeld, GAO Intern General Government

Division, Washington, D. C.

Office of the General Counsel, Washington, D. C.

Los Angeles Field Office

Page 48 GAO/GGD-99-33 Unauthorized Employment of Aliens

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