Compliance & EthicsMarch/April2013Professionala publication of the society of corporate compliance and ethicswww.corporatecompliance.orgMeetMichael JosephsonPresident and Founder,Josephson Institute of Ethics,Los AngelesSee page 1427Success:You hitthe targetyou aim atFrank Navran39The basics of the EEOC’sEnforcement Guidanceon employers’ use ofcriminal recordsVu T. Do47Proving our worth:Measuring the return oninvestment of ethics andcompliance programsSkip Lowney52Your board isengaged, but whatabout management?Shelley Auland Christina ReeseThis article, published in Compliance & Ethics Professional, appears here with permission from the Society of Corporate Compliance & Ethics. Call SCCE at +1 952 933 4977 or 888 277 4977 with reprint requests.
y Justin D. EstepE-Verify: A comprehensiveoverview of its development,advantages, disadvantages,and future»»E-Verify has been renewed by the federal government multiple times.»»Many states have already developed additional stringent E-Verify laws.»»Voluntary electronic employment verification has its pros and cons.»»E-Verify still has many detractors because of its error rate.»»A national E-Verify requirement could occur within ten years.EstepOver the past 15 years, U.S. Citizenshipand Immigration Services (USCIS)has developed a cheap and relativelyefficient program to confirm the employmenteligibility of new employees. 1BackgroundThe verification system was originallynamed the Basic Pilot Program.The Immigration and NaturalizationService (INS), now called USCIS,launched Basic Pilot in 1997 in conjunctionwith the Social SecurityAdministration (SSA). The programwas originally implemented in a limitedfashion, and was restricted to California,Florida, Illinois, Nebraska, New York, and Texas.Basic Pilot software allowed employers toinstantly check Form I-9 information providedby the employee against the INS database,but required an employer to call and confirmthe validity of the same data with the SSA.Over time, the SSA database was integratedinto Basic Pilot, and INS authorized the use ofthird-party work eligibility verifiers by launchingthe Designated Agent Basic Pilot Program.Even though the Basic Pilot Program hadseveral deficiencies, including a high falsenegativeand false-positive rate, Basic Pilot wasre-authorized by the U.S. Congress in 2001. TheBasic Pilot Program Extension and ExpansionAct of 2003 continued the program for anotherfive years, and expanded its use to all 50 statesby December 1, 2004. In 2004, Basic Pilot wasreconfigured as a web-based access system,allowing users to access the program from anycomputer connected to the Internet withoutuploading the old software platform directly tothe computer’s hard drive. The program itselfwas improved by adding online enrollmentand reporting capability for users. It was madeavailable to the public 23 hours day.By 2007, the Basic Pilot Program had beenrenamed E-Verify, and was updated with webservices that allowed designated agents oremployers to develop Form I-9 software thatcould interface seamlessly with E-Verify. Since2007, USCIS has continued to upgrade E-VerifyCompliance & Ethics Professional March/April 2013+1 952 933 4977 or 888 277 4977 www.corporatecompliance.org 61
Compliance & Ethics Professional March/April 2013and reduce its error rate. In 2009, the FederalAcquisition Regulation (FAR) 2 went into effectand required most federal contractors to enrollE-Verify in order to qualify for federal governmentcontracts.Since 2009, many states, counties, and citiesthroughout the United States have implementedtheir own E-Verify regulations. 3 Currently, mostE-Verify requirements are tied to public workscontracts, but some states have implementedmuch stricter E-Verify regulations.E-Verify growthOver half the states in the U.S. already havesome form of E-Verify legislation in place, indicatingthat the proliferation of E-Verify willmost likely continue. On January 1, 2013, Utah,Arizona, Louisiana, Mississippi, Alabama,Georgia, South Carolina, North Carolina, andTennessee will all have very stringent E-Verifyrequirements that apply to most public andprivate employers. Several other state legislaturesrecently proposed E-Verify bills thatwere voted down orexpired before a vote,as was the case inTexas during the 2011legislative session.More than adozen E-Verifyrelatedbills failedto pass during theregular and specialsessions of the 2011Texas state legislature,but these bills will almost certainly bere-introduced in 2013. The overriding issuesthat prevented most state legislatures fromsupporting the E-Verify regulations was theprogram’s error rate and the costs that businesswould incur as a result of system errors.As with most software programs, E-Verifyimproves incrementally as new versions aredeveloped and released by USCIS. The errorCurrently, most E-Verifyrequirements are tied topublic works contracts,but some states haveimplemented much stricterE-Verify regulations.rate for E-Verify continues to decline, whichleads us to believe that the apprehension ofpoliticians on both sides of the aisle will ebbover the next few years. It is not farfetched topredict that an E-Verify bill in Texas will passduring the 2013 or 2015 bicameral sessionsrespectively. Other states are more reluctant toenact E-Verify legislation, and California hasproactively excluded it.From 2008 to 2011, many cities in Californiaenacted public and private E-Verify legislationincluding Temecula, Murrieta, and SanJuan Capistrano. California reacted to publicoutcry and took control of its E-Verify legislationby preventing individual countiesand municipalities from enacting their ownE-Verify laws. The concerns of conservativeand liberal Californians alike had a familiarrefrain, “The state (E-Verify) ban received broadsupport, including the California Chamber ofCommerce and the California Farm BureauFederation, which questioned the accuracy ofthe databases used by the federal system.” 4Although theE-Verify programcontinues to haveits detractors, otherstates have takenelectronic employmentverification astep further. In 2011,USCIS and the stateof Mississippi developedand launchedthe Records andInformation from DMVs for E-Verify (RIDE)program. 5 This new addition to E-Verifychecks federal databases for discrepanciesand verifies driver’s license information usingstate DMV records. The RIDE program isbuilt on existing technology that states mustalready use in conjunction with the AmericanAssociation of Motor Vehicle Administrators.The improvement of E-Verify, its cheap cost of62 www.corporatecompliance.org +1 952 933 4977 or 888 277 4977
implementation, and the current political climatesurrounding undocumented aliens pointto more states adopting this program over thenext few years.Advantages and disadvantages of E-VerifyThe use and volume of companies involvedwith E-Verify continues to rise, and the lukewarmreaction to the program by federal andstate lawmakers has left employers ponderingtheir options.Like most businessdecisions, a cost-effectivenesscalculationmust be applied tothe implementationof the E-Verifyprogram. There areseveral benefits if acompany chooses tovoluntarily sign upfor E-Verify. A majoradvantage is theScience, Technology,Engineering and Mathematics (STEM) degreework authorization extension for foreign nationals.The STEM extension allows certain studentsan additional 17 months of work authorizationafter the expiration of their original OptionalPractical Training (OPT) period, but onlycompanies enrolled in E-Verify may employstudents with a valid OPT STEM extension.Many auto manufacturing, medical, oil and gas,and software companies have found the STEMextension invaluable, because it provides astopgap solution for college or graduate studentswho miss the H-1B cap after graduation.E-Verify can also help companies screentheir workforce for unauthorized applicants,and it may discourage unauthorized workersfrom applying. Proactive use of E-Verifymay also help companies during the courseof Form I-9 investigations. Immigration andCustoms Enforcement (ICE) auditors have theThe use and volume ofcompanies involved withE-Verify continues to rise,and the lukewarm reactionto the program by federaland state lawmakers hasleft employers ponderingtheir options.ability to reduce fines issued as a result of aForm I-9 investigation for several reasons, andmay cite the use of E-Verify as a demonstrationof “good faith” and the reason for a reduction.In many ways, E-Verify remains a doubleedgedsword for most employers, and oftenthe costs outweigh the benefits of the program.First and foremost, the E-Verify program doesnot eliminate document fraud. If a prospectiveemployee has effectively stolen another’sidentity, or bought anunexpired employmentauthorizationdocument (EAD) cardobtained throughfraud, the E-Verifysystem is often unableto alert the employerto this fact. Althoughthe employer will notbe held responsiblefor this oversight inmost instances, theywill have to deal withthe cost of losing an experienced employeeand re-training a new one, if ICE was toconduct an investigation and discover theunauthorized worker.Employers who enroll in E-Verify subjecttheir HR professionals to another layerof bureaucratic regulations. The standardE-Verify Memorandum of Understanding(MOU) document employers must sign laysout several requirements that are easily violated.For example, E-Verify submissions mustbe made by the end of the third day of workfor pay. If an employee’s hire date is not withinE-Verify’s allotted date range, the system willask the employer to provide a reason for thedelay and then store that information forpossible future use against the employer. 6E-Verify has some flexibility, because it allowsemployers to choose specific individual hiringsites and divisions for enrollment in E-VerifyCompliance & Ethics Professional March/April 2013+1 952 933 4977 or 888 277 4977 www.corporatecompliance.org 63
while excluding others. This “benefit” couldpotentially cause other issues, because standardemployee turnover can create lapses inE-Verify compliance, requiring the employerto rigorously train and track the submissionsof its HR department. A single incident of noncomplianceis a minor concern compared tothe ramifications of committing many errorsover time, because this lack of compliance mayraise red flags with USCIS and ICE, leading toForm I-9 subpoenas and investigations.The appropriate executives at every companymust make their own determinationregarding E-Verify. The decision to voluntarilyenroll in E-Verify should be contemplated ina deliberate and inclusive manner, and executedonly after a consensus is reached. Thevolatile debate surrounding undocumentedworkers may render these deliberations mootby accelerating the ever-expanding reach ofE-Verify legislation. Many immigration attorneys,including myself, believe a nationalE-Verify requirement will be enacted withinthe next five to ten years. Even if your companychooses not to use E-Verify, every HRdepartment in the country should familiarizeitself with the program and its requirementsin order to avoid a rushed integration into acompany protocol. As always, vigilance is thegreatest deterrent of non-compliance. ✵Justin D. Estep ( email@example.com) is an Attorney with FosterQuan,LLP in Austin, TX.1. United States Citizenship and Immigration Services: History andMilestones. Available at http://www.uscis.gov/portal/site/uscis/menuitem.eb1d4c2a3e5b9ac89243c6a7543f6d1a/?vgnextoid=84979589cdb76210VgnVCM100000b92ca60aRCRD&vgnextchannel=84979589cdb76210VgnVCM100000b92ca60aRCRD2. USCIS: E-Verify Guide for Federal Contractors, revised September 2012.Available at http://www.uscis.gov/USCIS/E-Verify/Customer%20Support/E-Verify%20User%20Manual%20for%20Federal%20Contractors_Final.pdf3. Aguilar, Julián. “E-Verify Bill Moves Out of CongressionalCommittee.” The Texas Tribune. September 21, 2011. Available athttp://www.texastribune.org/immigration-in-texas/immigration/e-verify-bill-moves-out-congressional-committee4. Esquivel, Paloma. “New California Law Bars E-VerifyRequirement for Employers.” Los Angeles Times, October 16, 2011.Available at http://articles.latimes.com/2011/oct/16/local/la-me-e-verify-201110175. USCIS: “USCIS and Mississippi Implement New E-Verify Tool toCombat Fraud Fact Sheet.” Available at http://www.uscis.gov/portal/site/uscis/menuitem.5af9bb95919f35e66f614176543f6d1a/?vgnextoid=e72badec01a80310VgnVCM100000082ca60aRCRD6. United States Citizenship and Immigration Services. E-Verify.M-775, E-Verify User Manual for Employers. September 1, 2012.Available at http://www.uscis.gov/USCIS/Verification/E-Verify/E-Verify_Native_Documents/manual-employer_comp.pdfCompliance Is Just the BeginningHow do you make better ethical decisions at work? Just because aparticular choice is legal does not make it right. This two-program videoseries introduces a three-step process for handling tough ethical decisions.The first program, “3 Steps to Ethical Decisions,” introduces the threesteps we can take when faced with a tough ethical choice. The secondprogram, “Ethical Situations to Consider,” presents eight dramatizedscenarios to spark discussion about familiar ethical issues. All formatscome with a facilitator’s package including course outlines, trainingactivities, reproducible handouts, and optional PowerPoint slides.Program One: 3 Steps to Ethical Decisions (24 minutes)MEMBERS $625 | NON-MEMBERS $720Program Two: Ethical Situations to Consider (32 minutes)MEMBERS $625 | NON-MEMBERS $720Compliance Is Just the Beginning (two-program package)MEMBERS $1,062 | NON-MEMBERS $1,224FULL ONLINE PREVIEWAVAILABLE!Visit SCCE’s website:www.corporatecompliance.orgVideo training produced by QMR—The Respectful Workplace CompanyComplianceJust Beginning_halfpagead_horiz_2c_CEP0113.indd 111/28/12 12:17 PMCompliance & Ethics Professional March/April 2013+1 952 933 4977 or 888 277 4977 www.corporatecompliance.org 65