U.S. law requires companies to employ only individuals who may legally work in the United States – either U.S. citizens, or foreign citizens who have the necessary authorization. This diverse workforce contributes greatly to the vibrancy and strength of the US economy, but that same strength also attracts unauthorized employment. E-Verify is an Internet-based system that allows businesses to determine the eligibility of their employees to work in the United States. Even though E-Verify is a free tool provided by the government, there are costs that are associated with it and this article looks at the expense in setting up an E-Verify system in your organization and running it.
A proposal to require every U.S. employer to use free federal databases to confirm the legal status of a new hire would cost employers billions of dollars in associated expenses, according to data compiled by Bloomberg. The cost of setting up E-Verify may depend largely on the size of the company with bigger companies able to spread their fixed costs over a large workforce as opposed to smaller ones. Businesses with fewer than 500 workers would bear the greatest burden, according to the data from Bloomberg, spending about $2.6 billion a year to use the government’s web-based verification system, E-Verify.
E-Verify has been publicized as being easy to use, fast and best of all free. This however does not mean that E-Verify does not incur cost to the company. The first expense could be said to be time and money to be invested in training staff responsible on E-Verify rules and responsibilities. Some large scale businesses have even gone to the extent of setting up new positions just to ensure compliance with federal regulations. Even small companies have had to set up IT department just to set up E-Verify. Another major cost could be said to be employee downtime in case of a Tentative Non-Confirmation (TNC). An employee has to meet with concerned HR personnel and then go to the SSA/DHS office to clear his/her discrepancy. The downtime to get clear record would be an added expense to the company. The Bloomberg report concluded that E-Verify cost small businesses in 2008 an average of $127 to run each new hire query and to respond in a timely manner to a TNC/Final Non Confirmation (FNC).
To conclude, with increasing I-9 audits, worksite notices and other federal measures to counter unauthorized employment, a cost effective method to ensure a legally compliant workforce should be worked at by any organization. The risk of fines, adverse publicity and legal liabilities should be factored in with the cost of setting up an E-Verify system.
Disclaimer: The content of this post does not constitute direct legal advice and is designed for informational purposes only. Any issues regarding compliance and obligations under United States or International laws or regulations should be addressed through your legal department or outside counsel.