What If There Were No Illegals?

What If There Were No Illegals?
Mary Crane, 09.11.06, 6:00 AM ET

With Congress back in session for the fall term, one issue will hit closest to home for small businesses across the United States--immigration reform.

According to the Bureau of Labor Statistics, 15% of the 144.3 million workers in the United States are foreign-born, including millions of unauthorized immigrants. There are no official government statistics for how many of these undocumented workers are employed by small-business owners, but according to the Pew Hispanic Center, most of them work in sectors typically led by small businesses. Nearly a third work in service occupations; 19% work in construction; 15% in production, installation and repair; and 4% in farming.

The employment of unauthorized workers is currently prohibited under the 1986 Immigration Reform and Control Act. The law requires employers to fill out an Employment Eligibility Verification Form, or I-9, for each employee, and employees must provide valid identification and a Social Security number. The employer must then evaluate the documents' authenticity and keep the I-9 on file for three years.

But most people agree this system just isn't working, and hasn't worked for a long time. The number of unauthorized immigrants keeps growing--there are an estimated 11.5 million to 12 million illegal immigrants in the country, up from 8.4 million in 2000--and enforcement is next to nil. In 2003, only three employers were cited for employing illegal immigrants, according to the Internal Revenue Service.

An owner of one midsize manufacturer in Chicago says the current policy is "don't ask, don't tell."

"As long as the documents presented to us during the hiring process appear to be official, we photocopy them and place them on file, but we are not expected to be forgery experts," he says.

That "don't ask, don't tell" policy may soon come to an end. Two widely divergent bills have been passed to deal with the growing numbers of illegal immigrants, one in the House of Representatives and the other in the Senate. The two bills will have to be reconciled by the two chambers and signed by the president to become law. While it looks unlikely that either the House or Senate will compromise on such a hot-button security issue ahead of November's congressional elections, some compromise may be possible after the elections or early next year.

However, should the Democrats win control of the House or Senate, the entire nature of any immigration-reform measure could change.

The current Republican-sponsored House bill, passed in December 2005 as the Border Protection, Antiterrorism and Illegal Immigration Control Act (H.R. 4437), is more hawkish than the Senate measure. Among its provisions: Businesses will have up to six years to verify previously employed workers' legal status using a new national database culled from the Department of Homeland Security's Basic Pilot Program Employment Eligibility Verification System, first implemented in 1997. Employers are susceptible to fines and penalties of as much as $40,000 for hiring violations.

In May, the Senate passed its own Comprehensive Immigration Reform Act of 2006 (S. 2611). Like the House bill, the Senate legislation requires employers to register with a verification system based on the Basic Pilot Program. Under Title 3 of the bill, employers would have up to 18 months after the date when at least $400 million has been appropriated for the new Electronic Employment Verification System to register. The EEVS would replace the I-9 form system and would be used to check employees hired after the date of registration with EEVS.

Small businesses are likely to be most interested in the Senate bill's provisions for integrating illegal immigrants already living in the United States, including President George W. Bush's much-touted guest worker program.

Under that program, 200,000 new visas would be available each year for work-related entry in the United States. The visas would be good for three years and renewable for an additional three. After four years of the six-year term, the worker can petition for a green card. The bill also allows immigrants who have lived in the country illegally for five years or more to apply for citizenship, and it increases the number of available H-1B visas for skilled foreign workers.

Critics say the bill amounts to giving amnesty to the millions of illegal immigrants living in the U.S. and opens the door to millions more; advocates say the bill acknowledges the labor needs of American businesses by offering undocumented workers a path to legal status.

The vast majority of small-business owners--more than 90%--believe illegal immigration is a problem, according to an April survey by the National Federation of Independent Business. But while most are supportive of the House bill's security measures, many are wary of its enforcement efforts and penalties.

The distinction small-business owners make between the House bill and Senate bill is that the House measure requires employers to verify that each of their current employees is eligible to work in the United States, and it imposes stiff fines for violating the rules. The Senate bill, on the other hand, leaves the labor pool intact by providing legal measures for undocumented immigrants to stay and work in the United States, and penalties are less severe.

Those who oppose the House bill say the verification system, based on the Basic Pilot Program, won't be ready to meet the needs of over 7 million employers and over 140 million current employees under the deadlines the House bill sets. Under the Senate bill, employers would be required to check new hires against the EEVS, but not existing employees.

Proponents of the Senate bill say the Senate's verification system could prove to be a useful tool in the early stages of the hiring process once it is implemented.

"Given the history of the Basic Pilot Program, we don't have any confidence that it can ramp up from a system that has [around 10,000] employers now to a system used by the millions of employers that are in the country in six years," says John Gay, senior vice president of government affairs and public policy for the National Restaurant Association. He adds that for his constituents--restaurateurs are the number-one employer of immigrants nationwide--the $25,000 House penalties are steep. Small businesses, with fewer resources to spare than larger businesses, will likely have a harder time paying the fines and adapting to the government's new regulations and procedures.

Chances are, a decision won't be made on the bill until late this fall or in 2007, say some experts. For now, most small-business owners are reluctant to talk about their opinions of the House and Senate bills until there is a clearer picture of what a unified bill will look like.

And with anti-immigration voices like CNN's Lou Dobbs fueling the fire, many business owners who employ immigrants--legal or illegal--are afraid of looking like profiteers offering sub-par wages, while those who are anti-immigration are afraid of appearing discriminatory.