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113th Congress                                            Rept. 113-677
                   }   HOUSE OF REPRESENTATIVES  {
 2d Session        }                             {            Part 1

======================================================================
 
                          LEGAL WORKFORCE ACT

                                _______
                                

 December 16, 2014.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

          Mr. Goodlatte, from the Committee on the Judiciary, 
                        submitted the following

                              R E P O R T

                             together with

                            DISSENTING VIEWS

                        [To accompany H.R. 1772]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on the Judiciary, to whom was referred the 
bill (H.R. 1772) to amend the Immigration and Nationality Act 
to make mandatory and permanent requirements relating to use of 
an electronic employment eligibility verification system, and 
for other purposes, having considered the same, reports 
favorably thereon with an amendment and recommends that the 
bill as amended do pass.

                                CONTENTS

                                                                   Page

The Amendment....................................................     2
Purpose and Summary..............................................    16
Background and Need for the Legislation..........................    16
Hearings.........................................................    23
Committee Consideration..........................................    24
Committee Votes..................................................    24
Committee Oversight Findings.....................................    35
New Budget Authority and Tax Expenditures........................    35
Congressional Budget Office Cost Estimate........................    35
Duplication of Federal Programs..................................    42
Disclosure of Directed Rule Makings..............................    42
Performance Goals and Objectives.................................    42
Advisory on Earmarks.............................................    42
Section-by-Section Analysis......................................    42
Changes in Existing Law Made by the Bill, as Reported............    48
Dissenting Views.................................................    85

                             The Amendment

    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Legal Workforce Act''.

SEC. 2. EMPLOYMENT ELIGIBILITY VERIFICATION PROCESS.

  (a) In General.--Section 274A(b) of the Immigration and Nationality 
Act (8 U.S.C. 1324a(b)) is amended to read as follows:
  ``(b) Employment Eligibility Verification Process.--
          ``(1) New hires, recruitment, and referral.--The requirements 
        referred to in paragraphs (1)(B) and (3) of subsection (a) are, 
        in the case of a person or other entity hiring, recruiting, or 
        referring an individual for employment in the United States, 
        the following:
                  ``(A) Attestation after examination of 
                documentation.--
                          ``(i) Attestation.--During the verification 
                        period (as defined in subparagraph (E)), the 
                        person or entity shall attest, under penalty of 
                        perjury and on a form, including electronic and 
                        telephonic formats, designated or established 
                        by the Secretary by regulation not later than 6 
                        months after the date of the enactment of the 
                        Legal Workforce Act, that it has verified that 
                        the individual is not an unauthorized alien 
                        by--
                                  ``(I) obtaining from the individual 
                                the individual's social security 
                                account number and recording the number 
                                on the form (if the individual claims 
                                to have been issued such a number), 
                                and, if the individual does not attest 
                                to United States nationality under 
                                subparagraph (B), obtaining such 
                                identification or authorization number 
                                established by the Department of 
                                Homeland Security for the alien as the 
                                Secretary of Homeland Security may 
                                specify, and recording such number on 
                                the form; and
                                  ``(II) examining--
                                          ``(aa) a document relating to 
                                        the individual presenting it 
                                        described in clause (ii); or
                                          ``(bb) a document relating to 
                                        the individual presenting it 
                                        described in clause (iii) and a 
                                        document relating to the 
                                        individual presenting it 
                                        described in clause (iv).
                          ``(ii) Documents evidencing employment 
                        authorization and establishing identity.--A 
                        document described in this subparagraph is an 
                        individual's--
                                  ``(I) unexpired United States 
                                passport or passport card;
                                  ``(II) unexpired permanent resident 
                                card that contains a photograph;
                                  ``(III) unexpired employment 
                                authorization card that contains a 
                                photograph;
                                  ``(IV) in the case of a nonimmigrant 
                                alien authorized to work for a specific 
                                employer incident to status, a foreign 
                                passport with Form I-94 or Form I-94A, 
                                or other documentation as designated by 
                                the Secretary specifying the alien's 
                                nonimmigrant status as long as the 
                                period of status has not yet expired 
                                and the proposed employment is not in 
                                conflict with any restrictions or 
                                limitations identified in the 
                                documentation;
                                  ``(V) passport from the Federated 
                                States of Micronesia (FSM) or the 
                                Republic of the Marshall Islands (RMI) 
                                with Form I-94 or Form I-94A, or other 
                                documentation as designated by the 
                                Secretary, indicating nonimmigrant 
                                admission under the Compact of Free 
                                Association Between the United States 
                                and the FSM or RMI; or
                                  ``(VI) other document designated by 
                                the Secretary of Homeland Security, if 
                                the document--
                                          ``(aa) contains a photograph 
                                        of the individual and biometric 
                                        identification data from the 
                                        individual and such other 
                                        personal identifying 
                                        information relating to the 
                                        individual as the Secretary of 
                                        Homeland Security finds, by 
                                        regulation, sufficient for 
                                        purposes of this clause;
                                          ``(bb) is evidence of 
                                        authorization of employment in 
                                        the United States; and
                                          ``(cc) contains security 
                                        features to make it resistant 
                                        to tampering, counterfeiting, 
                                        and fraudulent use.
                          ``(iii) Documents evidencing employment 
                        authorization.--A document described in this 
                        subparagraph is an individual's social security 
                        account number card (other than such a card 
                        which specifies on the face that the issuance 
                        of the card does not authorize employment in 
                        the United States).
                          ``(iv) Documents establishing identity of 
                        individual.--A document described in this 
                        subparagraph is--
                                  ``(I) an individual's unexpired State 
                                issued driver's license or 
                                identification card if it contains a 
                                photograph and information such as 
                                name, date of birth, gender, height, 
                                eye color, and address;
                                  ``(II) an individual's unexpired U.S. 
                                military identification card;
                                  ``(III) an individual's unexpired 
                                Native American tribal identification 
                                document issued by a tribal entity 
                                recognized by the Bureau of Indian 
                                Affairs; or
                                  ``(IV) in the case of an individual 
                                under 18 years of age, a parent or 
                                legal guardian's attestation under 
                                penalty of law as to the identity and 
                                age of the individual.
                          ``(v) Authority to prohibit use of certain 
                        documents.--If the Secretary of Homeland 
                        Security finds, by regulation, that any 
                        document described in clause (i), (ii), or 
                        (iii) as establishing employment authorization 
                        or identity does not reliably establish such 
                        authorization or identity or is being used 
                        fraudulently to an unacceptable degree, the 
                        Secretary may prohibit or place conditions on 
                        its use for purposes of this paragraph.
                          ``(vi) Signature.--Such attestation may be 
                        manifested by either a hand-written or 
                        electronic signature.
                  ``(B) Individual attestation of employment 
                authorization.--During the verification period (as 
                defined in subparagraph (E)), the individual shall 
                attest, under penalty of perjury on the form designated 
                or established for purposes of subparagraph (A), that 
                the individual is a citizen or national of the United 
                States, an alien lawfully admitted for permanent 
                residence, or an alien who is authorized under this Act 
                or by the Secretary of Homeland Security to be hired, 
                recruited, or referred for such employment. Such 
                attestation may be manifested by either a hand-written 
                or electronic signature. The individual shall also 
                provide that individual's social security account 
                number (if the individual claims to have been issued 
                such a number), and, if the individual does not attest 
                to United States nationality under this subparagraph, 
                such identification or authorization number established 
                by the Department of Homeland Security for the alien as 
                the Secretary may specify.
                  ``(C) Retention of verification form and 
                verification.--
                          ``(i) In general.--After completion of such 
                        form in accordance with subparagraphs (A) and 
                        (B), the person or entity shall--
                                  ``(I) retain a paper, microfiche, 
                                microfilm, or electronic version of the 
                                form and make it available for 
                                inspection by officers of the 
                                Department of Homeland Security, the 
                                Special Counsel for Immigration-Related 
                                Unfair Employment Practices, or the 
                                Department of Labor during a period 
                                beginning on the date of the recruiting 
                                or referral of the individual, or, in 
                                the case of the hiring of an 
                                individual, the date on which the 
                                verification is completed, and ending--
                                          ``(aa) in the case of the 
                                        recruiting or referral of an 
                                        individual, 3 years after the 
                                        date of the recruiting or 
                                        referral; and
                                          ``(bb) in the case of the 
                                        hiring of an individual, the 
                                        later of 3 years after the date 
                                        the verification is completed 
                                        or one year after the date the 
                                        individual's employment is 
                                        terminated; and
                                  ``(II) during the verification period 
                                (as defined in subparagraph (E)), make 
                                an inquiry, as provided in subsection 
                                (d), using the verification system to 
                                seek verification of the identity and 
                                employment eligibility of an 
                                individual.
                          ``(ii) Confirmation.--
                                  ``(I) Confirmation received.--If the 
                                person or other entity receives an 
                                appropriate confirmation of an 
                                individual's identity and work 
                                eligibility under the verification 
                                system within the time period 
                                specified, the person or entity shall 
                                record on the form an appropriate code 
                                that is provided under the system and 
                                that indicates a final confirmation of 
                                such identity and work eligibility of 
                                the individual.
                                  ``(II) Tentative nonconfirmation 
                                received.--If the person or other 
                                entity receives a tentative 
                                nonconfirmation of an individual's 
                                identity or work eligibility under the 
                                verification system within the time 
                                period specified, the person or entity 
                                shall so inform the individual for whom 
                                the verification is sought. If the 
                                individual does not contest the 
                                nonconfirmation within the time period 
                                specified, the nonconfirmation shall be 
                                considered final. The person or entity 
                                shall then record on the form an 
                                appropriate code which has been 
                                provided under the system to indicate a 
                                final nonconfirmation. If the 
                                individual does contest the 
                                nonconfirmation, the individual shall 
                                utilize the process for secondary 
                                verification provided under subsection 
                                (d). The nonconfirmation will remain 
                                tentative until a final confirmation or 
                                nonconfirmation is provided by the 
                                verification system within the time 
                                period specified. In no case shall an 
                                employer terminate employment of an 
                                individual because of a failure of the 
                                individual to have identity and work 
                                eligibility confirmed under this 
                                section until a nonconfirmation becomes 
                                final. Nothing in this clause shall 
                                apply to a termination of employment 
                                for any reason other than because of 
                                such a failure. In no case shall an 
                                employer rescind the offer of 
                                employment to an individual because of 
                                a failure of the individual to have 
                                identity and work eligibility confirmed 
                                under this subsection until a 
                                nonconfirmation becomes final. Nothing 
                                in this subclause shall apply to a 
                                recission of the offer of employment 
                                for any reason other than because of 
                                such a failure.
                                  ``(III) Final confirmation or 
                                nonconfirmation received.--If a final 
                                confirmation or nonconfirmation is 
                                provided by the verification system 
                                regarding an individual, the person or 
                                entity shall record on the form an 
                                appropriate code that is provided under 
                                the system and that indicates a 
                                confirmation or nonconfirmation of 
                                identity and work eligibility of the 
                                individual.
                                  ``(IV) Extension of time.--If the 
                                person or other entity in good faith 
                                attempts to make an inquiry during the 
                                time period specified and the 
                                verification system has registered that 
                                not all inquiries were received during 
                                such time, the person or entity may 
                                make an inquiry in the first subsequent 
                                working day in which the verification 
                                system registers that it has received 
                                all inquiries. If the verification 
                                system cannot receive inquiries at all 
                                times during a day, the person or 
                                entity merely has to assert that the 
                                entity attempted to make the inquiry on 
                                that day for the previous sentence to 
                                apply to such an inquiry, and does not 
                                have to provide any additional proof 
                                concerning such inquiry.
                                  ``(V) Consequences of 
                                nonconfirmation.--
                                          ``(aa) Termination or 
                                        notification of continued 
                                        employment.--If the person or 
                                        other entity has received a 
                                        final nonconfirmation regarding 
                                        an individual, the person or 
                                        entity may terminate employment 
                                        of the individual (or decline 
                                        to recruit or refer the 
                                        individual). If the person or 
                                        entity does not terminate 
                                        employment of the individual or 
                                        proceeds to recruit or refer 
                                        the individual, the person or 
                                        entity shall notify the 
                                        Secretary of Homeland Security 
                                        of such fact through the 
                                        verification system or in such 
                                        other manner as the Secretary 
                                        may specify.
                                          ``(bb) Failure to notify.--If 
                                        the person or entity fails to 
                                        provide notice with respect to 
                                        an individual as required under 
                                        item (aa), the failure is 
                                        deemed to constitute a 
                                        violation of subsection 
                                        (a)(1)(A) with respect to that 
                                        individual.
                                  ``(VI) Continued employment after 
                                final nonconfirmation.--If the person 
                                or other entity continues to employ (or 
                                to recruit or refer) an individual 
                                after receiving final nonconfirmation, 
                                a rebuttable presumption is created 
                                that the person or entity has violated 
                                subsection (a)(1)(A).
                  ``(D) Effective dates of new procedures.--
                          ``(i) Hiring.--Except as provided in clause 
                        (iii), the provisions of this paragraph shall 
                        apply to a person or other entity hiring an 
                        individual for employment in the United States 
                        as follows:
                                  ``(I) With respect to employers 
                                having 10,000 or more employees in the 
                                United States on the date of the 
                                enactment of the Legal Workforce Act, 
                                on the date that is 6 months after the 
                                date of the enactment of such Act.
                                  ``(II) With respect to employers 
                                having 500 or more employees in the 
                                United States, but less than 10,000 
                                employees in the United States, on the 
                                date of the enactment of the Legal 
                                Workforce Act, on the date that is 12 
                                months after the date of the enactment 
                                of such Act.
                                  ``(III) With respect to employers 
                                having 20 or more employees in the 
                                United States, but less than 500 
                                employees in the United States, on the 
                                date of the enactment of the Legal 
                                Workforce Act, on the date that is 18 
                                months after the date of the enactment 
                                of such Act.
                                  ``(IV) With respect to employers 
                                having 1 or more employees in the 
                                United States, but less than 20 
                                employees in the United States, on the 
                                date of the enactment of the Legal 
                                Workforce Act, on the date that is 24 
                                months after the date of the enactment 
                                of such Act.
                          ``(ii) Recruiting and referring.--Except as 
                        provided in clause (iii), the provisions of 
                        this paragraph shall apply to a person or other 
                        entity recruiting or referring an individual 
                        for employment in the United States on the date 
                        that is 12 months after the date of the 
                        enactment of the Legal Workforce Act.
                          ``(iii) Agricultural labor or services.--With 
                        respect to an employee performing agricultural 
                        labor or services, this paragraph shall not 
                        apply with respect to the verification of the 
                        employee until the date that is 24 months after 
                        the date of the enactment of the Legal 
                        Workforce Act. For purposes of the preceding 
                        sentence, the term `agricultural labor or 
                        services' has the meaning given such term by 
                        the Secretary of Agriculture in regulations and 
                        includes agricultural labor as defined in 
                        section 3121(g) of the Internal Revenue Code of 
                        1986, agriculture as defined in section 3(f) of 
                        the Fair Labor Standards Act of 1938 (29 U.S.C. 
                        203(f)), the handling, planting, drying, 
                        packing, packaging, processing, freezing, or 
                        grading prior to delivery for storage of any 
                        agricultural or horticultural commodity in its 
                        unmanufactured state, all activities required 
                        for the preparation, processing or 
                        manufacturing of a product of agriculture (as 
                        such term is defined in such section 3(f)) for 
                        further distribution, and activities similar to 
                        all the foregoing as they relate to fish or 
                        shellfish in aquaculture facilities. An 
                        employee described in this clause shall not be 
                        counted for purposes of clause (i).
                          ``(iv) Transition rule.--Subject to paragraph 
                        (4), the following shall apply to a person or 
                        other entity hiring, recruiting, or referring 
                        an individual for employment in the United 
                        States until the effective date or dates 
                        applicable under clauses (i) through (iii):
                                  ``(I) This subsection, as in effect 
                                before the enactment of the Legal 
                                Workforce Act.
                                  ``(II) Subtitle A of title IV of the 
                                Illegal Immigration Reform and 
                                Immigrant Responsibility Act of 1996 (8 
                                U.S.C. 1324a note), as in effect before 
                                the effective date in section 7(c) of 
                                the Legal Workforce Act.
                                  ``(III) Any other provision of 
                                Federal law requiring the person or 
                                entity to participate in the E-Verify 
                                Program described in section 403(a) of 
                                the Illegal Immigration Reform and 
                                Immigrant Responsibility Act of 1996 (8 
                                U.S.C. 1324a note), as in effect before 
                                the effective date in section 7(c) of 
                                the Legal Workforce Act, including 
                                Executive Order 13465 (8 U.S.C. 1324a 
                                note; relating to Government 
                                procurement).
                  ``(E) Verification period defined.--
                          ``(i) In general.--For purposes of this 
                        paragraph:
                                  ``(I) In the case of recruitment or 
                                referral, the term `verification 
                                period' means the period ending on the 
                                date recruiting or referring commences.
                                  ``(II) In the case of hiring, the 
                                term `verification period' means the 
                                period beginning on the date on which 
                                an offer of employment is extended and 
                                ending on the date that is 3 business 
                                days after the date of hire, except as 
                                provided in clause (iii). The offer of 
                                employment may be conditioned in 
                                accordance with clause (ii).
                          ``(ii) Job offer may be conditional.--A 
                        person or other entity may offer a prospective 
                        employee an employment position that is 
                        conditioned on final verification of the 
                        identity and employment eligibility of the 
                        employee using the procedures established under 
                        this paragraph.
                          ``(iii) Special rule.--Notwithstanding clause 
                        (i)(II), in the case of an alien who is 
                        authorized for employment and who provides 
                        evidence from the Social Security 
                        Administration that the alien has applied for a 
                        social security account number, the 
                        verification period ends three business days 
                        after the alien receives the social security 
                        account number.
          ``(2) Reverification for individuals with limited work 
        authorization.--
                  ``(A) In general.--Except as provided in subparagraph 
                (B), a person or entity shall make an inquiry, as 
                provided in subsection (d), using the verification 
                system to seek reverification of the identity and 
                employment eligibility of all individuals with a 
                limited period of work authorization employed by the 
                person or entity during the 3 business days after the 
                date on which the employee's work authorization expires 
                as follows:
                          ``(i) With respect to employers having 10,000 
                        or more employees in the United States on the 
                        date of the enactment of the Legal Workforce 
                        Act, beginning on the date that is 6 months 
                        after the date of the enactment of such Act.
                          ``(ii) With respect to employers having 500 
                        or more employees in the United States, but 
                        less than 10,000 employees in the United 
                        States, on the date of the enactment of the 
                        Legal Workforce Act, beginning on the date that 
                        is 12 months after the date of the enactment of 
                        such Act.
                          ``(iii) With respect to employers having 20 
                        or more employees in the United States, but 
                        less than 500 employees in the United States, 
                        on the date of the enactment of the Legal 
                        Workforce Act, beginning on the date that is 18 
                        months after the date of the enactment of such 
                        Act.
                          ``(iv) With respect to employers having 1 or 
                        more employees in the United States, but less 
                        than 20 employees in the United States, on the 
                        date of the enactment of the Legal Workforce 
                        Act, beginning on the date that is 24 months 
                        after the date of the enactment of such Act.
                  ``(B) Agricultural labor or services.--With respect 
                to an employee performing agricultural labor or 
                services, or an employee recruited or referred by a 
                farm labor contractor (as defined in section 3 of the 
                Migrant and Seasonal Agricultural Worker Protection Act 
                (29 U.S.C. 1801)), subparagraph (A) shall not apply 
                with respect to the reverification of the employee 
                until the date that is 24 months after the date of the 
                enactment of the Legal Workforce Act. For purposes of 
                the preceding sentence, the term `agricultural labor or 
                services' has the meaning given such term by the 
                Secretary of Agriculture in regulations and includes 
                agricultural labor as defined in section 3121(g) of the 
                Internal Revenue Code of 1986, agriculture as defined 
                in section 3(f) of the Fair Labor Standards Act of 1938 
                (29 U.S.C. 203(f)), the handling, planting, drying, 
                packing, packaging, processing, freezing, or grading 
                prior to delivery for storage of any agricultural or 
                horticultural commodity in its unmanufactured state, 
                all activities required for the preparation, 
                processing, or manufacturing of a product of 
                agriculture (as such term is defined in such section 
                3(f)) for further distribution, and activities similar 
                to all the foregoing as they relate to fish or 
                shellfish in aquaculture facilities. An employee 
                described in this subparagraph shall not be counted for 
                purposes of subparagraph (A).
                  ``(C) Reverification.--Paragraph (1)(C)(ii) shall 
                apply to reverifications pursuant to this paragraph on 
                the same basis as it applies to verifications pursuant 
                to paragraph (1), except that employers shall--
                          ``(i) use a form designated or established by 
                        the Secretary by regulation for purposes of 
                        this paragraph; and
                          ``(ii) retain a paper, microfiche, microfilm, 
                        or electronic version of the form and make it 
                        available for inspection by officers of the 
                        Department of Homeland Security, the Special 
                        Counsel for Immigration-Related Unfair 
                        Employment Practices, or the Department of 
                        Labor during the period beginning on the date 
                        the reverification commences and ending on the 
                        date that is the later of 3 years after the 
                        date of such reverification or 1 year after the 
                        date the individual's employment is terminated.
          ``(3) Previously hired individuals.--
                  ``(A) On a mandatory basis for certain employees.--
                          ``(i) In general.--Not later than the date 
                        that is 6 months after the date of the 
                        enactment of the Legal Workforce Act, an 
                        employer shall make an inquiry, as provided in 
                        subsection (d), using the verification system 
                        to seek verification of the identity and 
                        employment eligibility of any individual 
                        described in clause (ii) employed by the 
                        employer whose employment eligibility has not 
                        been verified under the E-Verify Program 
                        described in section 403(a) of the Illegal 
                        Immigration Reform and Immigrant Responsibility 
                        Act of 1996 (8 U.S.C. 1324a note).
                          ``(ii) Individuals described.--An individual 
                        described in this clause is any of the 
                        following:
                                  ``(I) An employee of any unit of a 
                                Federal, State, or local government.
                                  ``(II) An employee who requires a 
                                Federal security clearance working in a 
                                Federal, State or local government 
                                building, a military base, a nuclear 
                                energy site, a weapons site, or an 
                                airport or other facility that requires 
                                workers to carry a Transportation 
                                Worker Identification Credential 
                                (TWIC).
                                  ``(III) An employee assigned to 
                                perform work in the United States under 
                                a Federal contract, except that this 
                                subclause--
                                          ``(aa) is not applicable to 
                                        individuals who have a 
                                        clearance under Homeland 
                                        Security Presidential Directive 
                                        12 (HSPD 12 clearance), are 
                                        administrative or overhead 
                                        personnel, or are working 
                                        solely on contracts that 
                                        provide Commercial Off The 
                                        Shelf goods or services as set 
                                        forth by the Federal 
                                        Acquisition Regulatory Council, 
                                        unless they are subject to 
                                        verification under subclause 
                                        (II); and
                                          ``(bb) only applies to 
                                        contracts over the simple 
                                        acquisition threshold as 
                                        defined in section 2.101 of 
                                        title 48, Code of Federal 
                                        Regulations.
                  ``(B) On a mandatory basis for multiple users of same 
                social security account number.--In the case of an 
                employer who is required by this subsection to use the 
                verification system described in subsection (d), or has 
                elected voluntarily to use such system, the employer 
                shall make inquiries to the system in accordance with 
                the following:
                          ``(i) The Commissioner of Social Security 
                        shall notify annually employees (at the 
                        employee address listed on the Wage and Tax 
                        Statement) who submit a social security account 
                        number to which more than one employer reports 
                        income and for which there is a pattern of 
                        unusual multiple use. The notification letter 
                        shall identify the number of employers to which 
                        income is being reported as well as sufficient 
                        information notifying the employee of the 
                        process to contact the Social Security 
                        Administration Fraud Hotline if the employee 
                        believes the employee's identity may have been 
                        stolen. The notice shall not share information 
                        protected as private, in order to avoid any 
                        recipient of the notice from being in the 
                        position to further commit or begin committing 
                        identity theft.
                          ``(ii) If the person to whom the social 
                        security account number was issued by the 
                        Social Security Administration has been 
                        identified and confirmed by the Commissioner, 
                        and indicates that the social security account 
                        number was used without their knowledge, the 
                        Secretary and the Commissioner shall lock the 
                        social security account number for employment 
                        eligibility verification purposes and shall 
                        notify the employers of the individuals who 
                        wrongfully submitted the social security 
                        account number that the employee may not be 
                        work eligible.
                          ``(iii) Each employer receiving such 
                        notification of an incorrect social security 
                        account number under clause (ii) shall use the 
                        verification system described in subsection (d) 
                        to check the work eligibility status of the 
                        applicable employee within 10 business days of 
                        receipt of the notification.
                  ``(C) On a voluntary basis.--Subject to paragraph 
                (2), and subparagraphs (A) through (C) of this 
                paragraph, beginning on the date that is 30 days after 
                the date of the enactment of the Legal Workforce Act, 
                an employer may make an inquiry, as provided in 
                subsection (d), using the verification system to seek 
                verification of the identity and employment eligibility 
                of any individual employed by the employer. If an 
                employer chooses voluntarily to seek verification of 
                any individual employed by the employer, the employer 
                shall seek verification of all individuals employed at 
                the same geographic location or, at the option of the 
                employer, all individuals employed within the same job 
                category, as the employee with respect to whom the 
                employer seeks voluntarily to use the verification 
                system. An employer's decision about whether or not 
                voluntarily to seek verification of its current 
                workforce under this subparagraph may not be considered 
                by any government agency in any proceeding, 
                investigation, or review provided for in this Act.
                  ``(D) Verification.--Paragraph (1)(C)(ii) shall apply 
                to verifications pursuant to this paragraph on the same 
                basis as it applies to verifications pursuant to 
                paragraph (1), except that employers shall--
                          ``(i) use a form designated or established by 
                        the Secretary by regulation for purposes of 
                        this paragraph; and
                          ``(ii) retain a paper, microfiche, microfilm, 
                        or electronic version of the form and make it 
                        available for inspection by officers of the 
                        Department of Homeland Security, the Special 
                        Counsel for Immigration-Related Unfair 
                        Employment Practices, or the Department of 
                        Labor during the period beginning on the date 
                        the verification commences and ending on the 
                        date that is the later of 3 years after the 
                        date of such verification or 1 year after the 
                        date the individual's employment is terminated.
          ``(4) Early compliance.--
                  ``(A) Former e-verify required users, including 
                federal contractors.--Notwithstanding the deadlines in 
                paragraphs (1) and (2), beginning on the date of the 
                enactment of the Legal Workforce Act, the Secretary is 
                authorized to commence requiring employers required to 
                participate in the E-Verify Program described in 
                section 403(a) of the Illegal Immigration Reform and 
                Immigrant Responsibility Act of 1996 (8 U.S.C. 1324a 
                note), including employers required to participate in 
                such program by reason of Federal acquisition laws (and 
                regulations promulgated under those laws, including the 
                Federal Acquisition Regulation), to commence compliance 
                with the requirements of this subsection (and any 
                additional requirements of such Federal acquisition 
                laws and regulation) in lieu of any requirement to 
                participate in the E-Verify Program.
                  ``(B) Former e-verify voluntary users and others 
                desiring early compliance.--Notwithstanding the 
                deadlines in paragraphs (1) and (2), beginning on the 
                date of the enactment of the Legal Workforce Act, the 
                Secretary shall provide for the voluntary compliance 
                with the requirements of this subsection by employers 
                voluntarily electing to participate in the E-Verify 
                Program described in section 403(a) of the Illegal 
                Immigration Reform and Immigrant Responsibility Act of 
                1996 (8 U.S.C. 1324a note) before such date, as well as 
                by other employers seeking voluntary early compliance.
          ``(5) Copying of documentation permitted.--Notwithstanding 
        any other provision of law, the person or entity may copy a 
        document presented by an individual pursuant to this subsection 
        and may retain the copy, but only (except as otherwise 
        permitted under law) for the purpose of complying with the 
        requirements of this subsection.
          ``(6) Limitation on use of forms.--A form designated or 
        established by the Secretary of Homeland Security under this 
        subsection and any information contained in or appended to such 
        form, may not be used for purposes other than for enforcement 
        of this Act and any other provision of Federal criminal law.
          ``(7) Good faith compliance.--
                  ``(A) In general.--Except as otherwise provided in 
                this subsection, a person or entity is considered to 
                have complied with a requirement of this subsection 
                notwithstanding a technical or procedural failure to 
                meet such requirement if there was a good faith attempt 
                to comply with the requirement.
                  ``(B) Exception if failure to correct after notice.--
                Subparagraph (A) shall not apply if--
                          ``(i) the failure is not de minimus;
                          ``(ii) the Secretary of Homeland Security has 
                        explained to the person or entity the basis for 
                        the failure and why it is not de minimus;
                          ``(iii) the person or entity has been 
                        provided a period of not less than 30 calendar 
                        days (beginning after the date of the 
                        explanation) within which to correct the 
                        failure; and
                          ``(iv) the person or entity has not corrected 
                        the failure voluntarily within such period.
                  ``(C) Exception for pattern or practice violators.--
                Subparagraph (A) shall not apply to a person or entity 
                that has or is engaging in a pattern or practice of 
                violations of subsection (a)(1)(A) or (a)(2).
          ``(8) Single extension of deadlines upon certification.--In a 
        case in which the Secretary of Homeland Security has certified 
        to the Congress that the employment eligibility verification 
        system required under subsection (d) will not be fully 
        operational by the date that is 6 months after the date of the 
        enactment of the Legal Workforce Act, each deadline established 
        under this section for an employer to make an inquiry using 
        such system shall be extended by 6 months. No other extension 
        of such a deadline shall be made.''.
  (b) Date of Hire.--Section 274A(h) of the Immigration and Nationality 
Act (8 U.S.C. 1324a(h)) is amended by adding at the end the following:
          ``(4) Definition of date of hire.--As used in this section, 
        the term `date of hire' means the date of actual commencement 
        of employment for wages or other remuneration, unless otherwise 
        specified.''.

SEC. 3. EMPLOYMENT ELIGIBILITY VERIFICATION SYSTEM.

  Section 274A(d) of the Immigration and Nationality Act (8 U.S.C. 
1324a(d)) is amended to read as follows:
  ``(d) Employment Eligibility Verification System.--
          ``(1) In general.--Patterned on the employment eligibility 
        confirmation system established under section 404 of the 
        Illegal Immigration Reform and Immigrant Responsibility Act of 
        1996 (8 U.S.C. 1324a note), the Secretary of Homeland Security 
        shall establish and administer a verification system through 
        which the Secretary (or a designee of the Secretary, which may 
        be a nongovernmental entity)--
                  ``(A) responds to inquiries made by persons at any 
                time through a toll-free telephone line and other toll-
                free electronic media concerning an individual's 
                identity and whether the individual is authorized to be 
                employed; and
                  ``(B) maintains records of the inquiries that were 
                made, of verifications provided (or not provided), and 
                of the codes provided to inquirers as evidence of their 
                compliance with their obligations under this section.
          ``(2) Initial response.--The verification system shall 
        provide confirmation or a tentative nonconfirmation of an 
        individual's identity and employment eligibility within 3 
        working days of the initial inquiry. If providing confirmation 
        or tentative nonconfirmation, the verification system shall 
        provide an appropriate code indicating such confirmation or 
        such nonconfirmation.
          ``(3) Secondary confirmation process in case of tentative 
        nonconfirmation.--In cases of tentative nonconfirmation, the 
        Secretary shall specify, in consultation with the Commissioner 
        of Social Security, an available secondary verification process 
        to confirm the validity of information provided and to provide 
        a final confirmation or nonconfirmation not later than 10 
        working days after the date on which the notice of the 
        tentative nonconfirmation is received by the employee. The 
        Secretary, in consultation with the Commissioner, may extend 
        this deadline once on a case-by-case basis for a period of 10 
        working days, and if the time is extended, shall document such 
        extension within the verification system. The Secretary, in 
        consultation with the Commissioner, shall notify the employee 
        and employer of such extension. The Secretary, in consultation 
        with the Commissioner, shall create a standard process of such 
        extension and notification and shall make a description of such 
        process available to the public. When final confirmation or 
        nonconfirmation is provided, the verification system shall 
        provide an appropriate code indicating such confirmation or 
        nonconfirmation.
          ``(4) Design and operation of system.--The verification 
        system shall be designed and operated--
                  ``(A) to maximize its reliability and ease of use by 
                persons and other entities consistent with insulating 
                and protecting the privacy and security of the 
                underlying information;
                  ``(B) to respond to all inquiries made by such 
                persons and entities on whether individuals are 
                authorized to be employed and to register all times 
                when such inquiries are not received;
                  ``(C) with appropriate administrative, technical, and 
                physical safeguards to prevent unauthorized disclosure 
                of personal information;
                  ``(D) to have reasonable safeguards against the 
                system's resulting in unlawful discriminatory practices 
                based on national origin or citizenship status, 
                including--
                          ``(i) the selective or unauthorized use of 
                        the system to verify eligibility; or
                          ``(ii) the exclusion of certain individuals 
                        from consideration for employment as a result 
                        of a perceived likelihood that additional 
                        verification will be required, beyond what is 
                        required for most job applicants;
                  ``(E) to maximize the prevention of identity theft 
                use in the system; and
                  ``(F) to limit the subjects of verification to the 
                following individuals:
                          ``(i) Individuals hired, referred, or 
                        recruited, in accordance with paragraph (1) or 
                        (4) of subsection (b).
                          ``(ii) Employees and prospective employees, 
                        in accordance with paragraph (1), (2), (3), or 
                        (4) of subsection (b).
                          ``(iii) Individuals seeking to confirm their 
                        own employment eligibility on a voluntary 
                        basis.
          ``(5) Responsibilities of commissioner of social security.--
        As part of the verification system, the Commissioner of Social 
        Security, in consultation with the Secretary of Homeland 
        Security (and any designee of the Secretary selected to 
        establish and administer the verification system), shall 
        establish a reliable, secure method, which, within the time 
        periods specified under paragraphs (2) and (3), compares the 
        name and social security account number provided in an inquiry 
        against such information maintained by the Commissioner in 
        order to validate (or not validate) the information provided 
        regarding an individual whose identity and employment 
        eligibility must be confirmed, the correspondence of the name 
        and number, and whether the individual has presented a social 
        security account number that is not valid for employment. The 
        Commissioner shall not disclose or release social security 
        information (other than such confirmation or nonconfirmation) 
        under the verification system except as provided for in this 
        section or section 205(c)(2)(I) of the Social Security Act.
          ``(6) Responsibilities of secretary of homeland security.--As 
        part of the verification system, the Secretary of Homeland 
        Security (in consultation with any designee of the Secretary 
        selected to establish and administer the verification system), 
        shall establish a reliable, secure method, which, within the 
        time periods specified under paragraphs (2) and (3), compares 
        the name and alien identification or authorization number (or 
        any other information as determined relevant by the Secretary) 
        which are provided in an inquiry against such information 
        maintained or accessed by the Secretary in order to validate 
        (or not validate) the information provided, the correspondence 
        of the name and number, whether the alien is authorized to be 
        employed in the United States, or to the extent that the 
        Secretary determines to be feasible and appropriate, whether 
        the records available to the Secretary verify the identity or 
        status of a national of the United States.
          ``(7) Updating information.--The Commissioner of Social 
        Security and the Secretary of Homeland Security shall update 
        their information in a manner that promotes the maximum 
        accuracy and shall provide a process for the prompt correction 
        of erroneous information, including instances in which it is 
        brought to their attention in the secondary verification 
        process described in paragraph (3).
          ``(8) Limitation on use of the verification system and any 
        related systems.--
                  ``(A) No national identification card.--Nothing in 
                this section shall be construed to authorize, directly 
                or indirectly, the issuance or use of national 
                identification cards or the establishment of a national 
                identification card.
                  ``(B) Critical infrastructure.--The Secretary may 
                authorize or direct any person or entity responsible 
                for granting access to, protecting, securing, 
                operating, administering, or regulating part of the 
                critical infrastructure (as defined in section 1016(e) 
                of the Critical Infrastructure Protection Act of 2001 
                (42 U.S.C. 5195c(e))) to use the verification system to 
                the extent the Secretary determines that such use will 
                assist in the protection of the critical 
                infrastructure.
          ``(9) Remedies.--If an individual alleges that the individual 
        would not have been dismissed from a job but for an error of 
        the verification mechanism, the individual may seek 
        compensation only through the mechanism of the Federal Tort 
        Claims Act, and injunctive relief to correct such error. No 
        class action may be brought under this paragraph.''.

SEC. 4. RECRUITMENT, REFERRAL, AND CONTINUATION OF EMPLOYMENT.

  (a) Additional Changes to Rules for Recruitment, Referral, and 
Continuation of Employment.--Section 274A(a) of the Immigration and 
Nationality Act (8 U.S.C. 1324a(a)) is amended--
          (1) in paragraph (1)(A), by striking ``for a fee'';
          (2) in paragraph (1), by amending subparagraph (B) to read as 
        follows:
                  ``(B) to hire, continue to employ, or to recruit or 
                refer for employment in the United States an individual 
                without complying with the requirements of subsection 
                (b).''; and
          (3) in paragraph (2), by striking ``after hiring an alien for 
        employment in accordance with paragraph (1),'' and inserting 
        ``after complying with paragraph (1),''.
  (b) Definition.--Section 274A(h) of the Immigration and Nationality 
Act (8 U.S.C. 1324a(h)), as amended by section 2(b) of this Act, is 
further amended by adding at the end the following:
          ``(5) Definition of recruit or refer.--As used in this 
        section, the term `refer' means the act of sending or directing 
        a person who is in the United States or transmitting 
        documentation or information to another, directly or 
        indirectly, with the intent of obtaining employment in the 
        United States for such person. Only persons or entities 
        referring for remuneration (whether on a retainer or 
        contingency basis) are included in the definition, except that 
        union hiring halls that refer union members or nonunion 
        individuals who pay union membership dues are included in the 
        definition whether or not they receive remuneration, as are 
        labor service entities or labor service agencies, whether 
        public, private, for-profit, or nonprofit, that refer, 
        dispatch, or otherwise facilitate the hiring of laborers for 
        any period of time by a third party. As used in this section, 
        the term `recruit' means the act of soliciting a person who is 
        in the United States, directly or indirectly, and referring the 
        person to another with the intent of obtaining employment for 
        that person. Only persons or entities referring for 
        remuneration (whether on a retainer or contingency basis) are 
        included in the definition, except that union hiring halls that 
        refer union members or nonunion individuals who pay union 
        membership dues are included in this definition whether or not 
        they receive remuneration, as are labor service entities or 
        labor service agencies, whether public, private, for-profit, or 
        nonprofit that recruit, dispatch, or otherwise facilitate the 
        hiring of laborers for any period of time by a third party.''.
  (c) Effective Date.--The amendments made by this section shall take 
effect on the date that is 1 year after the date of the enactment of 
this Act, except that the amendments made by subsection (a) shall take 
effect 6 months after the date of the enactment of this Act insofar as 
such amendments relate to continuation of employment.

SEC. 5. GOOD FAITH DEFENSE.

  Section 274A(a)(3) of the Immigration and Nationality Act (8 U.S.C. 
1324a(a)(3)) is amended to read as follows:
          ``(3) Good faith defense.--
                  ``(A) Defense.--An employer (or person or entity that 
                hires, employs, recruits, or refers (as defined in 
                subsection (h)(5)), or is otherwise obligated to comply 
                with this section) who establishes that it has complied 
                in good faith with the requirements of subsection (b)--
                          ``(i) shall not be liable to a job applicant, 
                        an employee, the Federal Government, or a State 
                        or local government, under Federal, State, or 
                        local criminal or civil law for any employment-
                        related action taken with respect to a job 
                        applicant or employee in good-faith reliance on 
                        information provided through the system 
                        established under subsection (d); and
                          ``(ii) has established compliance with its 
                        obligations under subparagraphs (A) and (B) of 
                        paragraph (1) and subsection (b) absent a 
                        showing by the Secretary of Homeland Security, 
                        by clear and convincing evidence, that the 
                        employer had knowledge that an employee is an 
                        unauthorized alien.
                  ``(B) Mitigation element.--For purposes of 
                subparagraph (A)(i), if an employer proves by a 
                preponderance of the evidence that the employer uses a 
                reasonable, secure, and established technology to 
                authenticate the identity of the new employee, that 
                fact shall be taken into account for purposes of 
                determining good faith use of the system established 
                under subsection (d).
                  ``(C) Failure to seek and obtain verification.--
                Subject to the effective dates and other deadlines 
                applicable under subsection (b), in the case of a 
                person or entity in the United States that hires, or 
                continues to employ, an individual, or recruits or 
                refers an individual for employment, the following 
                requirements apply:
                          ``(i) Failure to seek verification.--
                                  ``(I) In general.--If the person or 
                                entity has not made an inquiry, under 
                                the mechanism established under 
                                subsection (d) and in accordance with 
                                the timeframes established under 
                                subsection (b), seeking verification of 
                                the identity and work eligibility of 
                                the individual, the defense under 
                                subparagraph (A) shall not be 
                                considered to apply with respect to any 
                                employment, except as provided in 
                                subclause (II).
                                  ``(II) Special rule for failure of 
                                verification mechanism.--If such a 
                                person or entity in good faith attempts 
                                to make an inquiry in order to qualify 
                                for the defense under subparagraph (A) 
                                and the verification mechanism has 
                                registered that not all inquiries were 
                                responded to during the relevant time, 
                                the person or entity can make an 
                                inquiry until the end of the first 
                                subsequent working day in which the 
                                verification mechanism registers no 
                                nonresponses and qualify for such 
                                defense.
                          ``(ii) Failure to obtain verification.--If 
                        the person or entity has made the inquiry 
                        described in clause (i)(I) but has not received 
                        an appropriate verification of such identity 
                        and work eligibility under such mechanism 
                        within the time period specified under 
                        subsection (d)(2) after the time the 
                        verification inquiry was received, the defense 
                        under subparagraph (A) shall not be considered 
                        to apply with respect to any employment after 
                        the end of such time period.''.

SEC. 6. PREEMPTION AND STATES' RIGHTS.

  Section 274A(h)(2) of the Immigration and Nationality Act (8 U.S.C. 
1324a(h)(2)) is amended to read as follows:
          ``(2) Preemption.--
                  ``(A) Single, national policy.--The provisions of 
                this section preempt any State or local law, ordinance, 
                policy, or rule, including any criminal or civil fine 
                or penalty structure, insofar as they may now or 
                hereafter relate to the hiring, continued employment, 
                or status verification for employment eligibility 
                purposes, of unauthorized aliens.
                  ``(B) State enforcement of federal law.--
                          ``(i) Business licensing.--A State, locality, 
                        municipality, or political subdivision may 
                        exercise its authority over business licensing 
                        and similar laws as a penalty for failure to 
                        use the verification system described in 
                        subsection (d) to verify employment eligibility 
                        when and as required under subsection (b).
                          ``(ii) General rules.--A State, at its own 
                        cost, may enforce the provisions of this 
                        section, but only insofar as such State follows 
                        the Federal regulations implementing this 
                        section, applies the Federal penalty structure 
                        set out in this section, and complies with all 
                        Federal rules and guidance concerning 
                        implementation of this section. Such State may 
                        collect any fines assessed under this section. 
                        An employer may not be subject to enforcement, 
                        including audit and investigation, by both a 
                        Federal agency and a State for the same 
                        violation under this section. Whichever entity, 
                        the Federal agency or the State, is first to 
                        initiate the enforcement action, has the right 
                        of first refusal to proceed with the 
                        enforcement action. The Secretary must provide 
                        copies of all guidance, training, and field 
                        instructions provided to Federal officials 
                        implementing the provisions of this section to 
                        each State.''.

SEC. 7. REPEAL.

  (a) In General.--Subtitle A of title IV of the Illegal Immigration 
Reform and Immigrant Responsibility Act of 1996 (8 U.S.C. 1324a note) 
is repealed.
  (b) References.--Any reference in any Federal law, Executive order, 
rule, regulation, or delegation of authority, or any document of, or 
pertaining to, the Department of Homeland Security, Department of 
Justice, or the Social Security Administration, to the employment 
eligibility confirmation system established under section 404 of the 
Illegal Immigration Reform and Immigrant Responsibility Act of 1996 (8 
U.S.C. 1324a note) is deemed to refer to the employment eligibility 
confirmation system established under section 274A(d) of the 
Immigration and Nationality Act, as amended by section 3 of this Act.
  (c) Effective Date.--This section shall take effect on the date that 
is 36 months after the date of the enactment of this Act.
  (d) Clerical Amendment.--The table of sections, in section 1(d) of 
the Illegal Immigration Reform and Immigrant Responsibility Act of 
1996, is amended by striking the items relating to subtitle A of title 
IV.

SEC. 8. PENALTIES.

  Section 274A of the Immigration and Nationality Act (8 U.S.C. 1324a) 
is amended--
          (1) in subsection (e)(1)--
                  (A) by striking ``Attorney General'' each place such 
                term appears and inserting ``Secretary of Homeland 
                Security''; and
                  (B) in subparagraph (D), by striking ``Service'' and 
                inserting ``Department of Homeland Security'';
          (2) in subsection (e)(4)--
                  (A) in subparagraph (A), in the matter before clause 
                (i), by inserting ``, subject to paragraph (10),'' 
                after ``in an amount'';
                  (B) in subparagraph (A)(i), by striking ``not less 
                than $250 and not more than $2,000'' and inserting 
                ``not less than $2,500 and not more than $5,000'';
                  (C) in subparagraph (A)(ii), by striking ``not less 
                than $2,000 and not more than $5,000'' and inserting 
                ``not less than $5,000 and not more than $10,000'';
                  (D) in subparagraph (A)(iii), by striking ``not less 
                than $3,000 and not more than $10,000'' and inserting 
                ``not less than $10,000 and not more than $25,000''; 
                and
                  (E) by moving the margin of the continuation text 
                following subparagraph (B) two ems to the left and by 
                amending subparagraph (B) to read as follows:
                  ``(B) may require the person or entity to take such 
                other remedial action as is appropriate.'';
          (3) in subsection (e)(5)--
                  (A) in the paragraph heading, strike ``paperwork'';
                  (B) by inserting ``, subject to paragraphs (10) 
                through (12),'' after ``in an amount'';
                  (C) by striking ``$100'' and inserting ``$1,000'';
                  (D) by striking ``$1,000'' and inserting ``$25,000''; 
                and
                  (E) by adding at the end the following: ``Failure by 
                a person or entity to utilize the employment 
                eligibility verification system as required by law, or 
                providing information to the system that the person or 
                entity knows or reasonably believes to be false, shall 
                be treated as a violation of subsection (a)(1)(A).'';
          (4) by adding at the end of subsection (e) the following:
          ``(10) Exemption from penalty for good faith violation.--In 
        the case of imposition of a civil penalty under paragraph 
        (4)(A) with respect to a violation of subsection (a)(1)(A) or 
        (a)(2) for hiring or continuation of employment or recruitment 
        or referral by person or entity and in the case of imposition 
        of a civil penalty under paragraph (5) for a violation of 
        subsection (a)(1)(B) for hiring or recruitment or referral by a 
        person or entity, the penalty otherwise imposed may be waived 
        or reduced if the violator establishes that the violator acted 
        in good faith.
          ``(11) Authority to debar employers for certain violations.--
                  ``(A) In general.--If a person or entity is 
                determined by the Secretary of Homeland Security to be 
                a repeat violator of paragraph (1)(A) or (2) of 
                subsection (a), or is convicted of a crime under this 
                section, such person or entity may be considered for 
                debarment from the receipt of Federal contracts, 
                grants, or cooperative agreements in accordance with 
                the debarment standards and pursuant to the debarment 
                procedures set forth in the Federal Acquisition 
                Regulation.
                  ``(B) Does not have contract, grant, agreement.--If 
                the Secretary of Homeland Security or the Attorney 
                General wishes to have a person or entity considered 
                for debarment in accordance with this paragraph, and 
                such an person or entity does not hold a Federal 
                contract, grant or cooperative agreement, the Secretary 
                or Attorney General shall refer the matter to the 
                Administrator of General Services to determine whether 
                to list the person or entity on the List of Parties 
                Excluded from Federal Procurement, and if so, for what 
                duration and under what scope.
                  ``(C) Has contract, grant, agreement.--If the 
                Secretary of Homeland Security or the Attorney General 
                wishes to have a person or entity considered for 
                debarment in accordance with this paragraph, and such 
                person or entity holds a Federal contract, grant or 
                cooperative agreement, the Secretary or Attorney 
                General shall advise all agencies or departments 
                holding a contract, grant, or cooperative agreement 
                with the person or entity of the Government's interest 
                in having the person or entity considered for 
                debarment, and after soliciting and considering the 
                views of all such agencies and departments, the 
                Secretary or Attorney General may refer the matter to 
                any appropriate lead agency to determine whether to 
                list the person or entity on the List of Parties 
                Excluded from Federal Procurement, and if so, for what 
                duration and under what scope.
                  ``(D) Review.--Any decision to debar a person or 
                entity in accordance with this paragraph shall be 
                reviewable pursuant to part 9.4 of the Federal 
                Acquisition Regulation.
          ``(12) Office for state and local government complaints.--The 
        Secretary of Homeland Security shall establish an office--
                  ``(A) to which State and local government agencies 
                may submit information indicating potential violations 
                of subsection (a), (b), or (g)(1) that were generated 
                in the normal course of law enforcement or the normal 
                course of other official activities in the State or 
                locality;
                  ``(B) that is required to indicate to the complaining 
                State or local agency within 5 business days of the 
                filing of such a complaint by identifying whether the 
                Secretary will further investigate the information 
                provided;
                  ``(C) that is required to investigate those 
                complaints filed by State or local government agencies 
                that, on their face, have a substantial probability of 
                validity;
                  ``(D) that is required to notify the complaining 
                State or local agency of the results of any such 
                investigation conducted; and
                  ``(E) that is required to report to the Congress 
                annually the number of complaints received under this 
                paragraph, the States and localities that filed such 
                complaints, and the resolution of the complaints 
                investigated by the Secretary.''; and
          (5) by amending paragraph (1) of subsection (f) to read as 
        follows:
          ``(1) Criminal penalty.--Any person or entity which engages 
        in a pattern or practice of violations of subsection (a)(1) or 
        (2) shall be fined not more than $5,000 for each unauthorized 
        alien with respect to which such a violation occurs, imprisoned 
        for not more than 18 months, or both, notwithstanding the 
        provisions of any other Federal law relating to fine levels.''.

SEC. 9. FRAUD AND MISUSE OF DOCUMENTS.

  Section 1546(b) of title 18, United States Code, is amended--
          (1) in paragraph (1), by striking ``identification 
        document,'' and inserting ``identification document or document 
        meant to establish work authorization (including the documents 
        described in section 274A(b) of the Immigration and Nationality 
        Act),''; and
          (2) in paragraph (2), by striking ``identification document'' 
        and inserting ``identification document or document meant to 
        establish work authorization (including the documents described 
        in section 274A(b) of the Immigration and Nationality Act),''.

SEC. 10. PROTECTION OF SOCIAL SECURITY ADMINISTRATION PROGRAMS.

  (a) Funding Under Agreement.--Effective for fiscal years beginning on 
or after October 1, 2013, the Commissioner of Social Security and the 
Secretary of Homeland Security shall enter into and maintain an 
agreement which shall--
          (1) provide funds to the Commissioner for the full costs of 
        the responsibilities of the Commissioner under section 274A(d) 
        of the Immigration and Nationality Act (8 U.S.C. 1324a(d)), as 
        amended by section 3 of this Act, including (but not limited 
        to)--
                  (A) acquiring, installing, and maintaining 
                technological equipment and systems necessary for the 
                fulfillment of the responsibilities of the Commissioner 
                under such section 274A(d), but only that portion of 
                such costs that are attributable exclusively to such 
                responsibilities; and
                  (B) responding to individuals who contest a tentative 
                nonconfirmation provided by the employment eligibility 
                verification system established under such section;
          (2) provide such funds annually in advance of the applicable 
        quarter based on estimating methodology agreed to by the 
        Commissioner and the Secretary (except in such instances where 
        the delayed enactment of an annual appropriation may preclude 
        such quarterly payments); and
          (3) require an annual accounting and reconciliation of the 
        actual costs incurred and the funds provided under the 
        agreement, which shall be reviewed by the Inspectors General of 
        the Social Security Administration and the Department of 
        Homeland Security.
  (b) Continuation of Employment Verification in Absence of Timely 
Agreement.--In any case in which the agreement required under 
subsection (a) for any fiscal year beginning on or after October 1, 
2013, has not been reached as of October 1 of such fiscal year, the 
latest agreement between the Commissioner and the Secretary of Homeland 
Security providing for funding to cover the costs of the 
responsibilities of the Commissioner under section 274A(d) of the 
Immigration and Nationality Act (8 U.S.C. 1324a(d)) shall be deemed in 
effect on an interim basis for such fiscal year until such time as an 
agreement required under subsection (a) is subsequently reached, except 
that the terms of such interim agreement shall be modified by the 
Director of the Office of Management and Budget to adjust for inflation 
and any increase or decrease in the volume of requests under the 
employment eligibility verification system. In any case in which an 
interim agreement applies for any fiscal year under this subsection, 
the Commissioner and the Secretary shall, not later than October 1 of 
such fiscal year, notify the Committee on Ways and Means, the Committee 
on the Judiciary, and the Committee on Appropriations of the House of 
Representatives and the Committee on Finance, the Committee on the 
Judiciary, and the Committee on Appropriations of the Senate of the 
failure to reach the agreement required under subsection (a) for such 
fiscal year. Until such time as the agreement required under subsection 
(a) has been reached for such fiscal year, the Commissioner and the 
Secretary shall, not later than the end of each 90-day period after 
October 1 of such fiscal year, notify such Committees of the status of 
negotiations between the Commissioner and the Secretary in order to 
reach such an agreement.

SEC. 11. FRAUD PREVENTION.

  (a) Blocking Misused Social Security Account Numbers.--The Secretary 
of Homeland Security, in consultation with the Commissioner of Social 
Security, shall establish a program in which social security account 
numbers that have been identified to be subject to unusual multiple use 
in the employment eligibility verification system established under 
section 274A(d) of the Immigration and Nationality Act (8 U.S.C. 
1324a(d)), as amended by section 3 of this Act, or that are otherwise 
suspected or determined to have been compromised by identity fraud or 
other misuse, shall be blocked from use for such system purposes unless 
the individual using such number is able to establish, through secure 
and fair additional security procedures, that the individual is the 
legitimate holder of the number.
  (b) Allowing Suspension of Use of Certain Social Security Account 
Numbers.--The Secretary of Homeland Security, in consultation with the 
Commissioner of Social Security, shall establish a program which shall 
provide a reliable, secure method by which victims of identity fraud 
and other individuals may suspend or limit the use of their social 
security account number or other identifying information for purposes 
of the employment eligibility verification system established under 
section 274A(d) of the Immigration and Nationality Act (8 U.S.C. 
1324a(d)), as amended by section 3 of this Act. The Secretary may 
implement the program on a limited pilot program basis before making it 
fully available to all individuals.
  (c) Allowing Parents To Prevent Theft of Their Child's Identity.--The 
Secretary of Homeland Security, in consultation with the Commissioner 
of Social Security, shall establish a program which shall provide a 
reliable, secure method by which parents or legal guardians may suspend 
or limit the use of the social security account number or other 
identifying information of a minor under their care for the purposes of 
the employment eligibility verification system established under 
274A(d) of the Immigration and Nationality Act (8 U.S.C. 1324a(d)), as 
amended by section 3 of this Act. The Secretary may implement the 
program on a limited pilot program basis before making it fully 
available to all individuals.

SEC. 12. USE OF EMPLOYMENT ELIGIBILITY VERIFICATION PHOTO TOOL.

  An employer who uses the photo matching tool used as part of the E-
Verify System shall match the photo tool photograph to both the 
photograph on the identity or employment eligibility document provided 
by the employee and to the face of the employee submitting the document 
for employment verification purposes.

SEC. 13. IDENTITY AUTHENTICATION EMPLOYMENT ELIGIBILITY VERIFICATION 
                    PILOT PROGRAMS.

  Not later than 48 months after the date of the enactment of this Act, 
the Secretary of Homeland Security, after consultation with the 
Commissioner of Social Security and the Director of the National 
Institute of Standards and Technology, shall establish by regulation 
not less than 2 Identity Authentication Employment Eligibility 
Verification pilot programs, each using a separate and distinct 
technology (the ``Authentication Pilots''). The purpose of the 
Authentication Pilots shall be to provide for identity authentication 
and employment eligibility verification with respect to enrolled new 
employees which shall be available to subject employers who elect to 
participate in either of the Authentication Pilots. Any subject 
employer may cancel the employer's participation in the Authentication 
Pilot after one year after electing to participate without prejudice to 
future participation. The Secretary shall report to the Committee on 
the Judiciary of the House of Representatives and the Committee on the 
Judiciary of the Senate the Secretary's findings on the Authentication 
Pilots, including the authentication technologies chosen, not later 
than 12 months after commencement of the Authentication Pilots.

SEC. 14. INSPECTOR GENERAL AUDITS.

  (a) In General.--Not later than 1 year after the date of the 
enactment of this Act, the Inspector General of the Social Security 
Administration shall complete audits of the following categories in 
order to uncover evidence of individuals who are not authorized to work 
in the United States:
          (1) Workers who dispute wages reported on their social 
        security account number when they believe someone else has used 
        such number and name to report wages.
          (2) Children's social security account numbers used for work 
        purposes.
          (3) Employers whose workers present significant numbers of 
        mismatched social security account numbers or names for wage 
        reporting.
  (b) Submission.--The Inspector General of the Social Security 
Administration shall submit the audits completed under subsection (a) 
to the Committee on Ways and Means of the House of Representative and 
the Committee on Finance of the Senate for review of the evidence of 
individuals who are not authorized to work in the United States. The 
Chairmen of those Committees shall then determine information to be 
shared with the Secretary of Homeland Security so that such Secretary 
can investigate the unauthorized employment demonstrated by such 
evidence.

                          Purpose and Summary

    H.R. 1772 reforms the employment eligibility verification 
process and requires all employers hiring or employing 
individuals in the United States to use the E-Verify system to 
check the employment eligibility of their new hires.

                Background and Need for the Legislation

    The Immigration Reform and Control Act of 1986 (``IRCA'') 
made it unlawful for employers to knowingly hire or employ 
aliens not eligible to work and required employers to check the 
identity and work eligibility documents of all new 
employees.\1\ This was designed to end the ``job magnet'' for 
illegal immigrants and thus finally control illegal immigration 
into the U.S.
---------------------------------------------------------------------------
    \1\See, generally, section 274A of the Immigration and Nationality 
Act.
---------------------------------------------------------------------------
    If the documents provided by an employee reasonably appear 
on their face to be genuine, the employer has met their 
document review obligation. The employer and employee must then 
fill out the Form I-9 with the employee's identifying 
information and the employer must attest under penalty of 
perjury that 1) the employer has examined the document(s) 
presented by the employee, 2) the document(s) appear to be 
genuine and to relate to the employee named, and 3) to the best 
of the employer's knowledge the employee is authorized to work 
in the United States.\2\ Certain documents, such as passports 
and resident alien cards, establish both identity and work 
eligibility. Others, such as most Social Security cards, 
establish work eligibility. And still others, such as drivers' 
licenses, establish identity.
---------------------------------------------------------------------------
    \2\U.S. Citizenship and Immigration Services Form I-9 at 8.
---------------------------------------------------------------------------
    If a new hire produces the required documents, the employer 
is not required to solicit the production of additional 
documents and the employee is not required to produce 
additional documents. In fact, an employer's request for more 
or different documents than are required, or refusal to honor 
documents that reasonably appear to be genuine, shall be 
treated as an unfair immigration-related employment practice if 
made for the purpose or with the intent of discriminating 
against an individual because of such individual's national 
origin or citizenship status.\3\
---------------------------------------------------------------------------
    \3\See, generally, section 274B of the INA.
---------------------------------------------------------------------------
    The easy availability of counterfeit documents has made a 
mockery of IRCA. Fake documents are produced by the millions 
and can be obtained cheaply.\4\ Thus, the IRCA system both 
benefits unscrupulous employers who do not mind hiring illegal 
immigrants but want to allege that they have met legal 
requirements, and harms employers who don't want to hire 
illegal immigrants but have no choice but to accept documents 
they know have a good likelihood of being counterfeit.
---------------------------------------------------------------------------
    \4\See, i.e., Verification of Eligibility for Employment and 
Benefits: Hearing Before the Subcomm. on Immigration and Claims of the 
House Comm. on the Judiciary, 104th Cong., 1st Sess. (March 30, 1995).
---------------------------------------------------------------------------
    In response to the deficiencies of IRCA, title IV of the 
Illegal Immigration Reform and Immigrant Responsibility Act of 
1996 (``IIRIRA'') instituted three employment eligibility 
confirmation pilot programs for volunteer employers that were 
to last for 4 years. Under the ``basic pilot program,'' the 
proffered Social Security numbers and alien identification 
numbers of new hires would be checked against Social Security 
Administration (SSA) and Immigration and Naturalization Service 
records in order to help ensure that new hires are genuinely 
eligible to work.\5\ The pilot was available to employers 
having locations in California, Florida, Illinois, Nebraska, 
New York and Texas.
---------------------------------------------------------------------------
    \5\P.L. 104-208, Division C, Sec. 403.
---------------------------------------------------------------------------
    Congress extended the operation of the program in 2002. In 
2003, Congress extended its operation through November 2008 and 
required that it be made available to employers nationwide no 
later than December 1, 2004.\6\ It was subsequently renewed 
several times, most recently in the September 2012--passed S. 
3245, which extended the program until September 30, 2015.\7\ 
In 2007 the basic pilot program became known as the E-Verify 
Program.
---------------------------------------------------------------------------
    \6\Pub. L. Nos. 107-128 and 108-156.
    \7\Pub. L. No. 112-176.
---------------------------------------------------------------------------
    Over 470,000 employers representing over 1.4 million 
worksites are currently participating in E-Verify.\8\ So far in 
FY 2013, there have been more than 20 million queries run 
through the system.\9\ Employers required to use E-Verify 
include the Federal Government and Legislative Branch,\10\ 
certain Federal contractors,\11\ and employers of certain 
immigrant students who study science, technology, engineering, 
or mathematics engaged in Optional Practical Training.\12\ In 
addition, some state governments, such as those in Arizona, 
Idaho, Minnesota and Georgia, have required certain employers 
to use E-Verify.\13\
---------------------------------------------------------------------------
    \8\U.S. Citizenship and Immigration Services data (as of Aug. 3, 
2013).
    \9\Id.
    \10\Illegal Immigration Reform and Immigrant Responsibility Act of 
1996 Sec. 402(e).
    \11\Executive Order 12989, as amended on June 6, 2008.
    \12\8 C.F.R Sec. 214.2 (f)(10)(ii)(C)(3).
    \13\See, e.g., H.B. 2779, ``The Legal Arizona Workers Act,'' 
enacted July 2, 2007 (Arizona).
---------------------------------------------------------------------------
    A May 2011, Rasmussen poll found that 82% of likely voters 
``think businesses should be required to use the Federal 
Government's E-Verify system to determine if a potential 
employee is in the country legally.''\14\
---------------------------------------------------------------------------
    \14\Rasmussen Reports, 61% Favor A State Law That Would Shut Down 
Repeat Offenders Who Hire Illegal Immigrants, http://
www.rasmussenreports.com/public_content/politics/current_ events/
immigration/61_favor_a_state_law_that_would_shut_down_repeat_offenders_ 
who_hire_illegal_immigrants.
---------------------------------------------------------------------------
    E-Verify works as follows for the vast majority of 
users:\15\
---------------------------------------------------------------------------
    \15\See, generally, sections 403(a) and 404 of IIRIRA and 
information provided by USCIS. Note that certain Federal contractors 
are subject to some different processes such as verifying existing 
employees.

         LBefore beginning to use E-Verify, an employer 
        must enter into a Memorandum of Understanding with DHS 
        and SSA. As under current law, once an applicant has 
        accepted a job offer, they present certain 
        identification and work authorization documents to the 
        employer. The employer, within three business days 
        after the hire, must examine the documents to determine 
        whether they reasonably appear on their face to be 
        genuine and must complete an I-9 form attesting to this 
---------------------------------------------------------------------------
        examination.

         LWithin the same 3 days, but after the I-9 is 
        completed, the employer must make an E-Verify query. If 
        the new hire claims to be a citizen, the employer will 
        transmit his or her name and Social Security number. If 
        the new hire claims to be a non-citizen, the employer 
        will transmit his or her name, DHS-issued number, and 
        Social Security number.

         LThe E-Verify confirmation office will compare 
        the name and Social Security number provided against 
        information contained in SSA records and, if necessary, 
        will compare the name and DHS-issued number provided 
        against information contained in DHS records.

         LIf, in checking the records, the confirmation 
        office ascertains that the new hire is eligible to 
        work, the operator will within 3 days so inform the 
        employer and provide a confirmation number.

         LIf the confirmation office cannot confirm the 
        work eligibility of the new hire, it will within 3 days 
        so inform the employer of a tentative nonconfirmation 
        (TNC) and provide a SSA Referral Letter which includes 
        a TNC number.

         LIf the new hire wishes to contest a TNC, they 
        must do so within eight Federal Government workdays of 
        the date on the Referral Letter. This process, called 
        secondary verification, is an expedited procedure set 
        up to confirm the validity of information contained in 
        the government records and provided by the new hire. 
        Under this process, the new hire contacts or visits SSA 
        and/or DHS to see why the government records disagree 
        with the information they have provided. If the new 
        hire requests secondary verification, they cannot be 
        fired on the basis of the TNC.

         LIf the discrepancy can be reconciled within 
        10 days, then confirmation of work eligibility and a 
        confirmation number will be given to the employer by 
        the end of this period.

         LIf the discrepancy cannot be reconciled 
        within 10 days, final denial of confirmation and a 
        final nonconfirmation (FNC) number will be given by the 
        end of this period. The employer then has two options:

          1) LThe employer can dismiss the new hire as being 
        ineligible to work in the United States.

          2) LThe employer can continue to employ the new hire. 
        The employer must notify DHS of this decision. If 
        action is brought by the government, the employer has 
        the burden of proof in showing the new hire is eligible 
        to work. If the employer fails to so prove, the 
        employer will be deemed to have knowingly hired an 
        illegal immigrant.

         LIf the employee believes that the FNC has 
        been issued in error, DHS and SSA will continue working 
        with the employee to help resolve the situation. In 
        these cases, DHS or SSA will notify the employer asking 
        that they not terminate the employee until the review 
        is complete. The average time it takes to resolve one 
        of these situations is 2.7 days.\16\
---------------------------------------------------------------------------
    \16\Information provided by U.S. Citizenship and Immigration 
Services.

    SSA and DHS agree, as part of the E-Verify system, to 
safeguard the information provided to them by employers and to 
limit access to the information as appropriate by law. An 
employer must agree not to use the pilot for pre-employment 
screening of job applicants or for support of any unlawful 
employment practice, not to verify selectively, and to ensure 
that the information it receives from the government is used 
only to confirm employment eligibility and is not otherwise 
disseminated.
    Over the years, DHS, through U.S. Citizenship and 
Immigration Services (USCIS) (which runs E-Verify) has made 
continual improvements to the program.
    In 2010, USCIS incorporated State Department passport data 
into E-Verify in order to help reduce the number of mismatches 
among foreign-born citizens.\17\ E-Verify had been criticized 
because naturalized U.S. citizens had a higher rate of TNC than 
did native-born U.S. citizens. This occurred many times because 
the naturalized citizen did not update their record with SSA 
once they became a citizen. In May 2008, USCIS addressed this 
problem by updating the E-Verify system to ``automatically 
check U.S. Citizenship and Immigration Services (USCIS) 
naturalization data'' and passport photos.\18\ According to 
USCIS, this step ``reduced citizenship status mismatches by 
approximately 39 percent.''\19\
---------------------------------------------------------------------------
    \17\USCIS Press Release, http://www.uscis.gov/portal/site/uscis/
menuitem.5af9bb95919f35e66
f614176543f6d1a/
?vgnextoid=b33c436d5f2df110VgnVCM1000004718190aRCRD&vgnextchannel;=
c94e6d26d17df110VgnVCM1000004718190aRCRD.
    \18\USCIS, DHS, USCIS Announces Enhancements to E-Verify Program 
(2008).
    \19\Id.
---------------------------------------------------------------------------
    USCIS continues to add new features to E-Verify in an 
attempt to improve the program's accuracy, effectiveness and to 
make it more user friendly. For instance,\20\
---------------------------------------------------------------------------
    \20\Information provided to Committee staff by USCIS, Feb. 22, 
2013.

         LIn September 2007, USCIS introduced the 
        photo-matching tool in which USCIS included the photos 
        from immigrant visas and employment authorization 
        documents in the E-Verify database. Employers can now 
        match the photo in E-Verify to the photo on the 
---------------------------------------------------------------------------
        identity document presented by the employee.

         LUSCIS instituted a system that automatically 
        prompts an employer to double-check the information 
        entered into E-Verify when a query is about to result 
        in a mismatch.\21\
---------------------------------------------------------------------------
    \21\Information provided by U.S. Citizenship and Immigration 
Services. http://www.uscis.gov/portal/site/uscis/
menuitem.eb1d4c2a3e5b9ac89243c6a7543f6d1a/?vgnextoid=84979589cdb76210V
gnVCM100000b92ca60aRCRD&vgnextchannel;=84979589cdb76210VgnVCM100000b92ca6
0aRCR
D, visited Feb. 1, 2011.

         LIn March 2011, USCIS began the Self-Check 
        program which allows an individual to run an E-Verify 
        query on themselves so that they can ensure that if 
        they are run through the system, they are correctly 
        confirmed as work authorized. To date there have been 
---------------------------------------------------------------------------
        over 143,000 Self-Check queries completed.

         LIn order to ensure the authenticity of a 
        state-issued driver's license or identification card, 
        USCIS has begun pilot programs with Mississippi, 
        Florida and Idaho in which the driver's license or 
        identification card number is sent to the state's 
        licensing agency and the state confirms whether or not 
        such a license has been issued.

         LUSCIS is working with SSA to create a SSN 
        ``self-lock'' program in which individuals can ``lock'' 
        their SSN so that it if it is submitted for work 
        authorization purposes the employer who submitted it 
        receives a TNC. This mechanism is aimed at preventing 
        the unauthorized use of another individual's SSN.

         LUSCIS, through its website, launched a 
        searchable database of employers who use E-Verify.

         LIn June 2013, USCIS announced the addition of 
        the ability for an employer to enter an employee's 
        email address into the system when making a query so 
        that both the employer and the employee can be notified 
        of a TNC concurrently. This is a voluntary entry and 
        does not relieve the employer of his or her obligation 
        to notify the employee of a TNC.

         LUSCIS has worked with the Office of Civil 
        Rights and Civil Liberties at the Department of 
        Homeland Security to update existing, and create new, 
        employee rights materials.

         LIn September 2012, USCIS made E-Verify 
        available through all web browsers to ensure that the 
        system can be accessed by any smartphone user. This is 
        one way to make the system more user friendly for 
        employers who may not have regular access to a personal 
        computer (such as agricultural employers). USCIS is 
        also working on an E-Verify application for 
        smartphones.

         LDuring FY 2012, the USCIS Monitoring and 
        Compliance Office referred three cases regarding misuse 
        of E-Verify to Immigration and Customs Enforcement and 
        51 cases to the Office of Special Counsel for 
        Immigration-Related Unfair Employment Practices at the 
        Department of Justice for investigation. USCIS also 
        conducted 35 employer compliance site visits. For FY 
        2013, as of August 5, 2013, the Monitoring and 
        Compliance Office had referred eleven E-Verify misuse 
        cases to Immigration and Customs Enforcement, referred 
        185 cases to the Office of Special Counsel for 
        Immigration-Related Unfair Employment Practices and 
        conducted 53 employer compliance site visits.\22\
---------------------------------------------------------------------------
    \22\Information provided by U.S. Citizenship and Immigration 
Services.

             ACCURACY, EFFICIENCY AND CUSTOMER SATISFACTION

    The accuracy rate has improved dramatically over the years. 
As USCIS testified at a February 2013 hearing of the 
Immigration and Border Security Subcommittee, ``the rate of 
(work) authorized employees who need to follow up (undergo 
secondary verification) with SSA or DHS has declined from 0.7 
percent to 0.3 percent when comparing data from similar time 
periods in 2005 and 2010.''\23\ This means that 99.7 percent of 
work eligible individuals receive immediate confirmation. This 
accuracy rate was determined by a study released in July 2012 
that was conducted by an independent consulting company. The 
report looked at data for the 8.2 million E-Verify queries in 
FY 2009 as well as other information such as interviews with 
Federal staff and contractors, information from the Department 
of Justice's Office of Special Counsel for Immigration-Related 
Unfair Employment Practices, E-Verify manuals, and information 
from USCIS, and the SSA.\24\
---------------------------------------------------------------------------
    \23\Testimony of Soraya Correa, Associate Director of the 
Enterprise Services Directorate, U.S. Citizenship and Immigration 
Services, Subcomm. on Immigration and Border Security, House Comm. on 
the Judiciary, 113th Cong. (2013).
    \24\Westat, Evaluation of the Accuracy of E-Verify Findings, July 
2012 at 1.
---------------------------------------------------------------------------
    Westat found that ``approximately 94 percent of FNCs were 
accurately issued to unauthorized workers.''\25\ And Westat 
went on to estimate that ``if employers informed all workers of 
their TNCs and how to contest them in ways the worker 
understood . . . the FNC accuracy rate would have been almost 
99 percent instead of 94 percent.''\26\
---------------------------------------------------------------------------
    \25\Id. at 2
    \26\Id.
---------------------------------------------------------------------------
    Recent internal USCIS accuracy and efficiency data shows 
that in FY 2012, 98.65 percent of queries resulted in a 
confirmation of work eligibility immediately or within 24 
hours.\27\ The other 1.35 percent of queries includes those 
that resulted in a TNC or FNC for one of several different 
reasons including that the individual was not eligible to work, 
the employee made a mistake in filling out the I-9 form, the 
employer entered incorrect information into the E-Verify 
system, or the employee has not updated information (such as a 
name change after marriage) with the Social Security 
Administration. Thus, it is important to understand that a TNC 
issued to an individual who is work eligible is not necessarily 
or even likely an ``error'' committed by the government.
---------------------------------------------------------------------------
    \27\Testimony of Soraya Correa, Associate Director of the 
Enterprise Services Directorate, U.S. Citizenship and Immigration 
Services, Subcomm. on Immigration and Border Security, House Comm. on 
the Judiciary, 113th Cong. (2013).
---------------------------------------------------------------------------
    According to USCIS:\28\
---------------------------------------------------------------------------
    \28\U.S. Citizenship and Immigration Services website, http://
www.uscis.gov/portal/site/uscis/
menuitem.eb1d4c2a3e5b9ac89243c6a7543f6d1a/
?vgnextoid=7c579589cdb76210VgnVCM100000b
92ca60aRCRD&vgnextchannel;=7c579589cdb76210VgnVCM100000b92ca60aRCRD.
---------------------------------------------------------------------------
          Of the 1.35% of employees who receive initial system 
        mismatches:

            1. L0.26 percent of employees are confirmed as work 
        authorized after contesting and resolving an initial 
        mismatch.

            2. L1.09 percent of employees are not found work 
        authorized.

          Of the 1.09% of employees not found to be work 
        authorized:

             L0.90 percent of employees receive initial 
        mismatches and do not contest the mismatch either 
        because they do not choose to or are unaware of the 
        opportunity to contest and as a result are not found 
        work authorized. The E-Verify program closely monitors 
        uncontested mismatches and actively reaches out to 
        employers to ensure that they are aware of their 
        responsibility to inform employees of the right to 
        contest.

             L0.01 percent of employees receive initial 
        mismatches, contest the mismatch and are not found work 
        authorized.

             L0.18 percent of employees receive initial 
        mismatches which remain unresolved because the employer 
        closed the cases as ``self-terminated'' or as requiring 
        further action by either the employer or employee at 
        the end of FY11.

    In a January 2013 USCIS Customer Satisfaction Survey, E-
Verify received an 86 out of 100 in the American Customer 
Satisfaction Index scale.\29\ The 86 scored by E-Verify is 19 
points higher than the Federal Government's satisfaction index 
of 67.\30\
---------------------------------------------------------------------------
    \29\USCIS Customer Satisfaction Survey, Jan. 2012 at 5.
    \30\Id.
---------------------------------------------------------------------------
    A July 2011 Westat report found that ``The large majority 
of employers continued to report that E-Verify is a highly 
accurate (94 percent) and effective (94 percent) tool for 
employment verification.''\31\ And an October 2012 National 
Restaurant Association and ImmigrationWorks USA survey found 
that eighty percent of restaurant operators who use E-Verify 
would recommend it to a colleague.\32\
---------------------------------------------------------------------------
    \31\Westat, Findings of the E-Verify User Survey, July 2011 at 29.
    \32\National Restaurant Association and ImmigrationWorksUSA, 2012 
E-Verify Survey, Apr. 2013 at 2.
---------------------------------------------------------------------------

               CRITICISMS OF THE CURRENT E-VERIFY PROGRAM

The E-Verify Program currently has an unreasonably high number of 
        erroneous hits, which will negatively impact the ability of 
        citizens and lawful residents to work.
    Secondary verification is required whenever employee-
provided information does not match that in the database. 
Secondary verification is not necessarily caused by database 
error. It most often means that a non work-authorized alien has 
been caught providing erroneous information or that an employee 
had mistakenly provided erroneous information to, or has failed 
to update information with, the SSA or with U.S. Citizenship 
and Immigration Services.
E-Verify leads to discrimination in hiring.
    In the past, because the basic pilot program was used by a 
limited number of employers, a small number of employers did 
not follow the requirement that the program be used on every 
new employee, and instead used it selectively. U.S. Citizenship 
and Immigration Services recognized that problem and improved 
education and training for employers who use the program.
A previous study determined that expanding E-Verify would be far too 
        costly.
    A Temple University Institute for Survey Research and an 
early Westat study estimated the annual cost of operating the 
basic pilot program as mandatory for all employers at over $11 
billion. However, the U.S. Government Accountability Office 
found that the cost would be less because the study had 
evaluated the costs of the system when it was telephone-based, 
rather than web-based (as it is now).\33\
---------------------------------------------------------------------------
    \33\U.S. Government Accountability Office, Immigration Enforcement: 
Weaknesses Hinder Employment Verification and Worksite Enforcement 
Efforts 24 (2005) (GAO-05-813).
---------------------------------------------------------------------------
The system if prone to the use of identity theft to gain employment 
        verification.
    Critics cite a 2009 Westat evaluation regarding 
vulnerability of E-Verify to identify theft, as evidence that 
E-Verify will not work. However, while E-Verify is vulnerable 
to identity theft, the 2009 Westat report estimate that about 
half of the illegal immigrants processed through E-Verify were 
not detected as unauthorized to work, has been misrepresented. 
The evaluation did not identify one single instance in which an 
illegal immigrant was not detected by E-Verify. Its estimate 
was based entirely on the evaluation's speculation as to the 
number of illegal immigrants expected to be in the workforce. 
The evaluation even admits that ``it is important to recognize 
that without direct evidence of the true employment-
authorization status of the workers with cases submitted to E-
Verify, any estimate [of the level of identity theft] will be 
very imprecise.'' H.R. 1772, the ``Legal Workforce Act,'' 
contains provisions aimed at preventing the use of stolen 
identities to gain work authorization through E-Verify.
    For instance, the bill requires DHS to ``lock'' for 
employment verification purposes a SSN that is subject to a 
pattern of unusual multiple use so that if the owner attempts 
to get a job, they are alerted that the SSN may have been 
compromised. And the bill requires DHS to allow individuals to 
``lock'' their own SSN so that it cannot be used to verify work 
eligibility. H.R. 1772 also requires that if SSA determines a 
SSN shows a pattern of unusual multiple use, SSA must send 
those employees who have submitted that SSN a letter alerting 
them that their SSN may have been compromised. The Legal 
Workforce Act creates criminal penalties if an individual 1) 
knowingly provides to an employer for E-Verify use a SSN that 
belongs to another individual, or 2) knowingly provides to E-
Verify a SSN that the individual knows does not belong to the 
person who provided them the number. Finally the bill requires 
DHS to conduct at least two pilot programs to provide for 
identity authentication within employment eligibility 
verification.

                                Hearings

    The Committee's Subcommittee on Immigration and Border 
Security held 1 day of hearings on H.R. 1772 on May 16, 2013. 
Testimony was received from Angelo Amador, Vice-President for 
Labor and Workforce Policy, National Restaurant Association; 
Jill Blitstein, College and University Professional Association 
for Human Resources; Julie Myers Wood, President, Compliance, 
Federal Practice and Software Solution, Guidepost Solutions; 
and Dominick Mondi, Executive Director, New Jersey Nursery and 
Landscape Association. Additional material was submitted by the 
National Restaurant Association, the Associated Builders and 
Contractors, the Essential Worker Immigrant Coalition, the 
National Retail Federation, Darden Restaurants, 
ImmigrationWorks USA and NumbersUSA.

                        Committee Consideration

    On June 26, 2013, the Committee met in open session and 
ordered the bill H.R. 1772 favorably reported, with an 
amendment, by a vote of 22 to 9, a quorum being present.

                            Committee Votes

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, the Committee advises that the 
following rollcall votes occurred during the Committee's 
consideration of H.R. 1772.
    1. The amendment offered by Mr. Conyers makes various 
violations of employee protections in the bill violations of 
the Immigration and Nationality Act Sec. 274A(a)(1)(A) and 
Sec. 274B. The amendment was defeated by a rollcall vote of 13-
18.

                             ROLLCALL NO. 1
------------------------------------------------------------------------
                                                  Ayes    Nays   Present
------------------------------------------------------------------------
Mr. Goodlatte (VA), Chairman...................              X
Mr. Sensenbrenner, Jr. (WI)....................              X
Mr. Coble (NC).................................              X
Mr. Smith (TX).................................              X
Mr. Chabot (OH)................................              X
Mr. Bachus (AL)................................              X
Mr. Issa (CA)..................................
Mr. Forbes (VA)................................              X
Mr. King (IA)..................................              X
Mr. Franks (AZ)................................              X
Mr. Gohmert (TX)...............................              X
Mr. Jordan (OH)................................
Mr. Poe (TX)...................................
Mr. Chaffetz (UT)..............................
Mr. Marino (PA)................................              X
Mr. Gowdy (SC).................................              X
Mr. Amodei (NV)................................
Mr. Labrador (ID)..............................              X
Ms. Farenthold (TX)............................              X
Mr. Holding (NC)...............................              X
Mr. Collins (GA)...............................              X
Mr. DeSantis (FL)..............................              X
Mr. Smith (MO).................................              X
 
Mr. Conyers, Jr. (MI), Ranking Member..........      X
Mr. Nadler (NY)................................
Mr. Scott (VA).................................      X
Mr. Watt (NC)..................................
Ms. Lofgren (CA)...............................      X
Ms. Jackson Lee (TX)...........................      X
Mr. Cohen (TN).................................      X
Mr. Johnson (GA)...............................      X
Mr. Pierluisi (PR).............................      X
Ms. Chu (CA)...................................      X
Mr. Deutch (FL)................................      X
Mr. Gutierrez (IL).............................
Ms. Bass (CA)..................................      X
Mr. Richmond (LA)..............................
Ms. DelBene (WA)...............................      X
Mr. Garcia (FL)................................      X
Mr. Jeffries (NY)..............................      X
                                                ------------------------
    Total......................................     13      18
------------------------------------------------------------------------

    2. The amendment offered by Ms. Lofgren requires that 
employers who use E-Verify prior to the first day of an 
employee's work must notify the DHS Secretary and do so for all 
new hires. The amendment was defeated by a rollcall of 8-20.

                             ROLLCALL NO. 2
------------------------------------------------------------------------
                                                  Ayes    Nays   Present
------------------------------------------------------------------------
Mr. Goodlatte (VA), Chairman...................              X
Mr. Sensenbrenner, Jr. (WI)....................              X
Mr. Coble (NC).................................              X
Mr. Smith (TX).................................              X
Mr. Chabot (OH)................................              X
Mr. Bachus (AL)................................              X
Mr. Issa (CA)..................................
Mr. Forbes (VA)................................              X
Mr. King (IA)..................................              X
Mr. Franks (AZ)................................              X
Mr. Gohmert (TX)...............................              X
Mr. Jordan (OH)................................              X
Mr. Poe (TX)...................................
Mr. Chaffetz (UT)..............................              X
Mr. Marino (PA)................................              X
Mr. Gowdy (SC).................................              X
Mr. Amodei (NV)................................              X
Mr. Labrador (ID)..............................              X
Ms. Farenthold (TX)............................              X
Mr. Holding (NC)...............................              X
Mr. Collins (GA)...............................
Mr. DeSantis (FL)..............................              X
Mr. Smith (MO).................................              X
 
Mr. Conyers, Jr. (MI), Ranking Member..........      X
Mr. Nadler (NY)................................
Mr. Scott (VA).................................      X
Mr. Watt (NC)..................................
Ms. Lofgren (CA)...............................      X
Ms. Jackson Lee (TX)...........................
Mr. Cohen (TN).................................
Mr. Johnson (GA)...............................
Mr. Pierluisi (PR).............................      X
Ms. Chu (CA)...................................      X
Mr. Deutch (FL)................................
Mr. Gutierrez (IL).............................
Ms. Bass (CA)..................................      X
Mr. Richmond (LA)..............................
Ms. DelBene (WA)...............................      X
Mr. Garcia (FL)................................      X
Mr. Jeffries (NY)..............................
                                                ------------------------
    Total......................................      8      20
------------------------------------------------------------------------

    3. An amendment offered by Ms. Lofgren eliminates 
verification requirements for labor unions, hiring halls and 
day labor centers. The amendment was defeated by a rollcall 
vote of 14-21.

                             ROLLCALL NO. 3
------------------------------------------------------------------------
                                                  Ayes    Nays   Present
------------------------------------------------------------------------
Mr. Goodlatte (VA), Chairman...................              X
Mr. Sensenbrenner, Jr. (WI)....................              X
Mr. Coble (NC).................................              X
Mr. Smith (TX).................................              X
Mr. Chabot (OH)................................              X
Mr. Bachus (AL)................................              X
Mr. Issa (CA)..................................
Mr. Forbes (VA)................................              X
Mr. King (IA)..................................              X
Mr. Franks (AZ)................................              X
Mr. Gohmert (TX)...............................              X
Mr. Jordan (OH)................................              X
Mr. Poe (TX)...................................              X
Mr. Chaffetz (UT)..............................              X
Mr. Marino (PA)................................              X
Mr. Gowdy (SC).................................              X
Mr. Amodei (NV)................................              X
Mr. Labrador (ID)..............................              X
Ms. Farenthold (TX)............................              X
Mr. Holding (NC)...............................              X
Mr. Collins (GA)...............................
Mr. DeSantis (FL)..............................              X
Mr. Smith (MO).................................              X
 
Mr. Conyers, Jr. (MI), Ranking Member..........      X
Mr. Nadler (NY)................................
Mr. Scott (VA).................................      X
Mr. Watt (NC)..................................
Ms. Lofgren (CA)...............................      X
Ms. Jackson Lee (TX)...........................      X
Mr. Cohen (TN).................................      X
Mr. Johnson (GA)...............................      X
Mr. Pierluisi (PR).............................      X
Ms. Chu (CA)...................................      X
Mr. Deutch (FL)................................      X
Mr. Gutierrez (IL).............................      X
Ms. Bass (CA)..................................      X
Mr. Richmond (LA)..............................
Ms. DelBene (WA)...............................      X
Mr. Garcia (FL)................................      X
Mr. Jeffries (NY)..............................      X
                                                ------------------------
    Total......................................     14      21
------------------------------------------------------------------------

    4. An amendment offered by Ms. Jackson Lee requires DHS to 
hire and train 500 full-time information technology employees 
to the purposes of executing the employment eligibility 
verification requirements of the bill. The amendment was 
defeated by a rollcall vote of 12-20.

                             ROLLCALL NO. 4
------------------------------------------------------------------------
                                                  Ayes    Nays   Present
------------------------------------------------------------------------
Mr. Goodlatte (VA), Chairman...................              X
Mr. Sensenbrenner, Jr. (WI)....................              X
Mr. Coble (NC).................................              X
Mr. Smith (TX).................................              X
Mr. Chabot (OH)................................              X
Mr. Bachus (AL)................................              X
Mr. Issa (CA)..................................
Mr. Forbes (VA)................................              X
Mr. King (IA)..................................              X
Mr. Franks (AZ)................................              X
Mr. Gohmert (TX)...............................              X
Mr. Jordan (OH)................................              X
Mr. Poe (TX)...................................
Mr. Chaffetz (UT)..............................              X
Mr. Marino (PA)................................
Mr. Gowdy (SC).................................              X
Mr. Amodei (NV)................................              X
Mr. Labrador (ID)..............................              X
Ms. Farenthold (TX)............................              X
Mr. Holding (NC)...............................              X
Mr. Collins (GA)...............................              X
Mr. DeSantis (FL)..............................              X
Mr. Smith (MO).................................              X
 
Mr. Conyers, Jr. (MI), Ranking Member..........      X
Mr. Nadler (NY)................................
Mr. Scott (VA).................................      X
Mr. Watt (NC)..................................
Ms. Lofgren (CA)...............................
Ms. Jackson Lee (TX)...........................      X
Mr. Cohen (TN).................................
Mr. Johnson (GA)...............................      X
Mr. Pierluisi (PR).............................      X
Ms. Chu (CA)...................................      X
Mr. Deutch (FL)................................      X
Mr. Gutierrez (IL).............................      X
Ms. Bass (CA)..................................      X
Mr. Richmond (LA)..............................
Ms. DelBene (WA)...............................      X
Mr. Garcia (FL)................................      X
Mr. Jeffries (NY)..............................      X
                                                ------------------------
    Total......................................     12      20
------------------------------------------------------------------------

    5. An amendment offered by Ms. Jackson Lee establishes an 
ombudsman to resolve questions by employers and employees 
regarding nonconfirmations of work eligibility. The amendment 
was defeated by a rollcall vote of 12-20.

                             ROLLCALL NO. 5
------------------------------------------------------------------------
                                                  Ayes    Nays   Present
------------------------------------------------------------------------
Mr. Goodlatte (VA), Chairman...................              X
Mr. Sensenbrenner, Jr. (WI)....................              X
Mr. Coble (NC).................................              X
Mr. Smith (TX).................................              X
Mr. Chabot (OH)................................              X
Mr. Bachus (AL)................................              X
Mr. Issa (CA)..................................
Mr. Forbes (VA)................................              X
Mr. King (IA)..................................
Mr. Franks (AZ)................................              X
Mr. Gohmert (TX)...............................              X
Mr. Jordan (OH)................................              X
Mr. Poe (TX)...................................              X
Mr. Chaffetz (UT)..............................              X
Mr. Marino (PA)................................              X
Mr. Gowdy (SC).................................              X
Mr. Amodei (NV)................................              X
Mr. Labrador (ID)..............................              X
Ms. Farenthold (TX)............................      X
Mr. Holding (NC)...............................              X
Mr. Collins (GA)...............................              X
Mr. DeSantis (FL)..............................              X
Mr. Smith (MO).................................              X
 
Mr. Conyers, Jr. (MI), Ranking Member..........      X
Mr. Nadler (NY)................................
Mr. Scott (VA).................................      X
Mr. Watt (NC)..................................
Ms. Lofgren (CA)...............................
Ms. Jackson Lee (TX)...........................      X
Mr. Cohen (TN).................................
Mr. Johnson (GA)...............................
Mr. Pierluisi (PR).............................      X
Ms. Chu (CA)...................................      X
Mr. Deutch (FL)................................      X
Mr. Gutierrez (IL).............................      X
Ms. Bass (CA)..................................      X
Mr. Richmond (LA)..............................
Ms. DelBene (WA)...............................      X
Mr. Garcia (FL)................................      X
Mr. Jeffries (NY)..............................      X
                                                ------------------------
    Total......................................     12      20
------------------------------------------------------------------------

    6. An amendment offered by Ms. Jackson Lee authorizes 
random employer audits, including the use of testers, by the 
DHS Office of Civil Rights and Civil Liberties (CRCL); to 
authorize periodic audits of employers for whom CRCL and the 
DOJ Office of Special Counsel for Immigration-Related Unfair 
Employment Practices receive information, complaints or charges 
of discrimination or document abuse. The amendment was defeated 
a rollcall vote of 12-21.

                             ROLLCALL NO. 6
------------------------------------------------------------------------
                                                  Ayes    Nays   Present
------------------------------------------------------------------------
Mr. Goodlatte (VA), Chairman...................              X
Mr. Sensenbrenner, Jr. (WI)....................              X
Mr. Coble (NC).................................              X
Mr. Smith (TX).................................              X
Mr. Chabot (OH)................................              X
Mr. Bachus (AL)................................              X
Mr. Issa (CA)..................................              X
Mr. Forbes (VA)................................              X
Mr. King (IA)..................................
Mr. Franks (AZ)................................              X
Mr. Gohmert (TX)...............................              X
Mr. Jordan (OH)................................              X
Mr. Poe (TX)...................................              X
Mr. Chaffetz (UT)..............................
Mr. Marino (PA)................................              X
Mr. Gowdy (SC).................................              X
Mr. Amodei (NV)................................              X
Mr. Labrador (ID)..............................              X
Ms. Farenthold (TX)............................              X
Mr. Holding (NC)...............................              X
Mr. Collins (GA)...............................              X
Mr. DeSantis (FL)..............................              X
Mr. Smith (MO).................................              X
 
Mr. Conyers, Jr. (MI), Ranking Member..........      X
Mr. Nadler (NY)................................
Mr. Scott (VA).................................      X
Mr. Watt (NC)..................................
Ms. Lofgren (CA)...............................
Ms. Jackson Lee (TX)...........................      X
Mr. Cohen (TN).................................
Mr. Johnson (GA)...............................
Mr. Pierluisi (PR).............................      X
Ms. Chu (CA)...................................      X
Mr. Deutch (FL)................................      X
Mr. Gutierrez (IL).............................      X
Ms. Bass (CA)..................................      X
Mr. Richmond (LA)..............................      X
Ms. DelBene (WA)...............................      X
Mr. Garcia (FL)................................      X
Mr. Jeffries (NY)..............................      X
                                                ------------------------
    Total......................................     12      21
------------------------------------------------------------------------

    7. An amendment offered by Ms. Chu increases penalties for 
unfair immigration-related employment practice violations. The 
amendment was defeated by a rollcall vote of 12-20.

                             ROLLCALL NO. 7
------------------------------------------------------------------------
                                                  Ayes    Nays   Present
------------------------------------------------------------------------
Mr. Goodlatte (VA), Chairman...................              X
Mr. Sensenbrenner, Jr. (WI)....................              X
Mr. Coble (NC).................................              X
Mr. Smith (TX).................................              X
Mr. Chabot (OH)................................              X
Mr. Bachus (AL)................................              X
Mr. Issa (CA)..................................              X
Mr. Forbes (VA)................................              X
Mr. King (IA)..................................              X
Mr. Franks (AZ)................................              X
Mr. Gohmert (TX)...............................
Mr. Jordan (OH)................................              X
Mr. Poe (TX)...................................
Mr. Chaffetz (UT)..............................
Mr. Marino (PA)................................              X
Mr. Gowdy (SC).................................              X
Mr. Amodei (NV)................................              X
Mr. Labrador (ID)..............................              X
Ms. Farenthold (TX)............................              X
Mr. Holding (NC)...............................              X
Mr. Collins (GA)...............................              X
Mr. DeSantis (FL)..............................              X
Mr. Smith (MO).................................              X
 
Mr. Conyers, Jr. (MI), Ranking Member..........      X
Mr. Nadler (NY)................................
Mr. Scott (VA).................................      X
Mr. Watt (NC)..................................
Ms. Lofgren (CA)...............................
Ms. Jackson Lee (TX)...........................      X
Mr. Cohen (TN).................................
Mr. Johnson (GA)...............................
Mr. Pierluisi (PR).............................      X
Ms. Chu (CA)...................................      X
Mr. Deutch (FL)................................      X
Mr. Gutierrez (IL).............................      X
Ms. Bass (CA)..................................      X
Mr. Richmond (LA)..............................      X
Ms. DelBene (WA)...............................      X
Mr. Garcia (FL)................................      X
Mr. Jeffries (NY)..............................      X
                                                ------------------------
    Total......................................     12      20
------------------------------------------------------------------------

    8. Two amendments offered en bloc by Ms. Chu to require the 
DHS Secretary to submit an annual report to Congress regarding 
the financial burden of the bill's requirements on small 
businesses and to create a grant program for small businesses 
to comply with the bill's requirements. Defeated 9-21.

                             ROLLCALL NO. 8
------------------------------------------------------------------------
                                                  Ayes    Nays   Present
------------------------------------------------------------------------
Mr. Goodlatte (VA), Chairman...................              X
Mr. Sensenbrenner, Jr. (WI)....................              X
Mr. Coble (NC).................................              X
Mr. Smith (TX).................................              X
Mr. Chabot (OH)................................              X
Mr. Bachus (AL)................................              X
Mr. Issa (CA)..................................              X
Mr. Forbes (VA)................................              X
Mr. King (IA)..................................
Mr. Franks (AZ)................................              X
Mr. Gohmert (TX)...............................              X
Mr. Jordan (OH)................................              X
Mr. Poe (TX)...................................
Mr. Chaffetz (UT)..............................              X
Mr. Marino (PA)................................              X
Mr. Gowdy (SC).................................              X
Mr. Amodei (NV)................................              X
Mr. Labrador (ID)..............................              X
Ms. Farenthold (TX)............................              X
Mr. Holding (NC)...............................              X
Mr. Collins (GA)...............................              X
Mr. DeSantis (FL)..............................              X
Mr. Smith (MO).................................              X
 
Mr. Conyers, Jr. (MI), Ranking Member..........      X
Mr. Nadler (NY)................................
Mr. Scott (VA).................................      X
Mr. Watt (NC)..................................
Ms. Lofgren (CA)...............................
Ms. Jackson Lee (TX)...........................
Mr. Cohen (TN).................................
Mr. Johnson (GA)...............................
Mr. Pierluisi (PR).............................
Ms. Chu (CA)...................................      X
Mr. Deutch (FL)................................      X
Mr. Gutierrez (IL).............................      X
Ms. Bass (CA)..................................
Mr. Richmond (LA)..............................      X
Ms. DelBene (WA)...............................      X
Mr. Garcia (FL)................................      X
Mr. Jeffries (NY)..............................      X
                                                ------------------------
    Total......................................      9      21
------------------------------------------------------------------------

    9. An amendment by Mr. Deutch strikes the Act's prohibition 
on class actions lawsuits regarding employment eligibility 
verification. The amendment was defeated by a rollcall vote of 
7-20.

                             ROLLCALL NO. 9
------------------------------------------------------------------------
                                                  Ayes    Nays   Present
------------------------------------------------------------------------
Mr. Goodlatte (VA), Chairman...................              X
Mr. Sensenbrenner, Jr. (WI)....................              X
Mr. Coble (NC).................................
Mr. Smith (TX).................................              X
Mr. Chabot (OH)................................              X
Mr. Bachus (AL)................................
Mr. Issa (CA)..................................              X
Mr. Forbes (VA)................................              X
Mr. King (IA)..................................              X
Mr. Franks (AZ)................................              X
Mr. Gohmert (TX)...............................
Mr. Jordan (OH)................................              X
Mr. Poe (TX)...................................              X
Mr. Chaffetz (UT)..............................              X
Mr. Marino (PA)................................              X
Mr. Gowdy (SC).................................              X
Mr. Amodei (NV)................................              X
Mr. Labrador (ID)..............................              X
Ms. Farenthold (TX)............................              X
Mr. Holding (NC)...............................              X
Mr. Collins (GA)...............................              X
Mr. DeSantis (FL)..............................              X
Mr. Smith (MO).................................              X
 
Mr. Conyers, Jr. (MI), Ranking Member..........      X
Mr. Nadler (NY)................................
Mr. Scott (VA).................................      X
Mr. Watt (NC)..................................
Ms. Lofgren (CA)...............................
Ms. Jackson Lee (TX)...........................
Mr. Cohen (TN).................................
Mr. Johnson (GA)...............................
Mr. Pierluisi (PR).............................
Ms. Chu (CA)...................................      X
Mr. Deutch (FL)................................      X
Mr. Gutierrez (IL).............................
Ms. Bass (CA)..................................
Mr. Richmond (LA)..............................
Ms. DelBene (WA)...............................      X
Mr. Garcia (FL)................................      X
Mr. Jeffries (NY)..............................      X
                                                ------------------------
    Total......................................      7      20
------------------------------------------------------------------------

    10. An amendment by Ms. DelBene delays the use of the 
employment eligibility verification procedures by agricultural 
employers until such time as the DHS Secretary certifies that 
the requirements will not cause a significant shortage of 
workers to perform agricultural labor or services in the United 
States. The amendment was defeated by a rollcall vote of 8-19.

                             ROLLCALL NO. 10
------------------------------------------------------------------------
                                                  Ayes    Nays   Present
------------------------------------------------------------------------
Mr. Goodlatte (VA), Chairman...................              X
Mr. Sensenbrenner, Jr. (WI)....................              X
Mr. Coble (NC).................................
Mr. Smith (TX).................................              X
Mr. Chabot (OH)................................              X
Mr. Bachus (AL)................................              X
Mr. Issa (CA)..................................              X
Mr. Forbes (VA)................................              X
Mr. King (IA)..................................              X
Mr. Franks (AZ)................................
Mr. Gohmert (TX)...............................
Mr. Jordan (OH)................................              X
Mr. Poe (TX)...................................
Mr. Chaffetz (UT)..............................              X
Mr. Marino (PA)................................              X
Mr. Gowdy (SC).................................              X
Mr. Amodei (NV)................................              X
Mr. Labrador (ID)..............................              X
Ms. Farenthold (TX)............................              X
Mr. Holding (NC)...............................              X
Mr. Collins (GA)...............................              X
Mr. DeSantis (FL)..............................              X
Mr. Smith (MO).................................              X
 
Mr. Conyers, Jr. (MI), Ranking Member..........      X
Mr. Nadler (NY)................................
Mr. Scott (VA).................................      X
Mr. Watt (NC)..................................
Ms. Lofgren (CA)...............................
Ms. Jackson Lee (TX)...........................
Mr. Cohen (TN).................................
Mr. Johnson (GA)...............................      X
Mr. Pierluisi (PR).............................
Ms. Chu (CA)...................................      X
Mr. Deutch (FL)................................      X
Mr. Gutierrez (IL).............................
Ms. Bass (CA)..................................
Mr. Richmond (LA)..............................
Ms. DelBene (WA)...............................      X
Mr. Garcia (FL)................................      X
Mr. Jeffries (NY)..............................      X
                                                ------------------------
    Total......................................      8      19
------------------------------------------------------------------------

    11. The bill was reported favorably by a rollcall vote of 
22-9.

                             ROLLCALL NO. 11
------------------------------------------------------------------------
                                                  Ayes    Nays   Present
------------------------------------------------------------------------
Mr. Goodlatte (VA), Chairman...................      X
Mr. Sensenbrenner, Jr. (WI)....................      X
Mr. Coble (NC).................................      X
Mr. Smith (TX).................................      X
Mr. Chabot (OH)................................      X
Mr. Bachus (AL)................................      X
Mr. Issa (CA)..................................      X
Mr. Forbes (VA)................................      X
Mr. King (IA)..................................      X
Mr. Franks (AZ)................................      X
Mr. Gohmert (TX)...............................
Mr. Jordan (OH)................................      X
Mr. Poe (TX)...................................      X
Mr. Chaffetz (UT)..............................      X
Mr. Marino (PA)................................      X
Mr. Gowdy (SC).................................      X
Mr. Amodei (NV)................................      X
Mr. Labrador (ID)..............................      X
Ms. Farenthold (TX)............................      X
Mr. Holding (NC)...............................      X
Mr. Collins (GA)...............................      X
Mr. DeSantis (FL)..............................      X
Mr. Smith (MO).................................      X
 
Mr. Conyers, Jr. (MI), Ranking Member..........              X
Mr. Nadler (NY)................................
Mr. Scott (VA).................................              X
Mr. Watt (NC)..................................
Ms. Lofgren (CA)...............................              X
Ms. Jackson Lee (TX)...........................
Mr. Cohen (TN).................................
Mr. Johnson (GA)...............................
Mr. Pierluisi (PR).............................              X
Ms. Chu (CA)...................................              X
Mr. Deutch (FL)................................              X
Mr. Gutierrez (IL).............................
Ms. Bass (CA)..................................
Mr. Richmond (LA)..............................
Ms. DelBene (WA)...............................              X
Mr. Garcia (FL)................................              X
Mr. Jeffries (NY)..............................              X
                                                ------------------------
    Total......................................     22       9
------------------------------------------------------------------------

                      Committee Oversight Findings

    In compliance with clause 3(c)(1) of rule XIII of the Rules 
of the House of Representatives, the Committee advises that the 
findings and recommendations of the Committee, based on 
oversight activities under clause 2(b)(1) of rule X of the 
Rules of the House of Representatives, are incorporated in the 
descriptive portions of this report.

               New Budget Authority and Tax Expenditures

    Clause 3(c)(2) of rule XIII of the Rules of the House of 
Representatives is inapplicable because this legislation does 
not provide new budgetary authority or increased tax 
expenditures.

               Congressional Budget Office Cost Estimate

    In compliance with clause 3(c)(3) of rule XIII of the Rules 
of the House of Representatives, the Committee sets forth, with 
respect to the bill, H.R. 1772, the following estimate and 
comparison prepared by the Director of the Congressional Budget 
Office under section 402 of the Congressional Budget Act of 
1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                 Washington, DC, December 17, 2013.
Hon. Bob Goodlatte, Chairman,
Committee on the Judiciary,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 1772, the ``Legal 
Workforce Act.''
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Mark 
Grabowicz, who can be reached at 226-2860.
            Sincerely,
                                      Douglas W. Elmendorf,
                                                  Director.

Enclosure

cc:
        Honorable John Conyers, Jr.
        Ranking Member




                    H.R. 1772--Legal Workforce Act.

      As ordered reported by the House Committee on the Judiciary 
                           on June 26, 2013.




                                SUMMARY

    H.R. 1772 would replace the Federal Government's existing 
voluntary system for verifying the employment eligibility of 
individuals in the United States with a mandatory system. 
Assuming appropriation of the necessary amounts, CBO estimates 
that implementing H.R. 1772 would cost about $635 million over 
the 2014-2018 period and a similar amount in the subsequent 5-
year period.
    In addition, CBO and staff of the Joint Committee on 
Taxation (JCT) estimate that enacting the bill would decrease 
direct spending and increase on-budget revenues but decrease 
off-budget revenues. (Payroll taxes for Social Security are 
classified as off-budget revenues.) Summing those budgetary 
impacts, CBO and JCT estimate that enacting H.R. 1772 would 
increase budget deficits as measured by the unified Federal 
budget by about $30 billion over the 10-year period.
    Pay-as-you-go procedures apply because enacting the 
legislation would affect direct spending and revenues. CBO and 
JCT estimate that enacting the bill would increase on-budget 
revenues by about $49 billion over the 2014-2023 period and 
would decrease direct spending by $9 billion over the same 
period. Thus, we estimate that enacting H.R. 1772 would 
decrease the on-budget deficit by about $58 billion over the 
10-year period. Only on-budget changes to outlays or revenues 
are subject to pay-as-you-go procedures.
    H.R. 1772 would impose intergovernmental and private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
on employers and other entities that hire, recruit, or refer 
individuals for employment. CBO estimates that the aggregate 
annual cost to comply with those mandates on public entities 
would exceed the intergovernmental threshold ($75 million in 
2013, adjusted annually for inflation) in fiscal year 2014. In 
addition, CBO estimates that the aggregate annual compliance 
costs for private entities would exceed the private-sector 
threshold ($150 million in 2013, adjusted annually for 
inflation) beginning in 2016 once the mandates are fully in 
effect.

                ESTIMATED COST TO THE FEDERAL GOVERNMENT

    The estimated budgetary impact of H.R. 1772 is shown in the 
following table. The costs of this legislation fall within 
budget functions 750 (administration of justice) and 800 
(general government).


                           BASIS OF ESTIMATE

    For this estimate, CBO assumes that the bill will be 
enacted late in 2013, the necessary amounts will be provided 
each year, and spending will follow historical patterns for 
operating the government's employment verification system.
Spending Subject to Appropriation
    H.R. 1772 would replace the Federal Government's existing 
voluntary system for verifying the employment eligibility of 
individuals with a mandatory system. (The existing system is 
known as E-Verify and is administered by the Department of 
Homeland Security--DHS.) The requirement for employers to use 
the system would be phased in over several years, with 
different deadlines for employers of different sizes. Within 30 
months of the bill's enactment, all employers would be required 
to use the system for all employees newly hired in the United 
States.
    Costs to DHS. Based on information from DHS about the costs 
to hire new employees and upgrade computer systems, CBO 
estimates that it would cost $454 million over the 2014-2018 
period to implement the new system. CBO expects that most of 
the additional funding would be used to pay for staff, 
technological components, and overhead to handle the increased 
workload. The E-Verify program has received funding of about 
$100 million annually in recent years, and the current system 
handled roughly 20 million cases in 2012. DHS expects that the 
caseload under the bill would more than double. Because the 
current system has some excess capacity, initial costs to ramp 
up capacity under the bill would be reduced by the use of that 
existing capacity. Estimated costs also include expenses for a 
new office to address state and local government issues, 
programs to prevent fraud involving social security numbers, 
and pilot programs to improve identity authentication and 
verification of employment eligibility.
    Costs to the Social Security Administration (SSA). Based on 
information from SSA, CBO estimates that it would cost $161 
million over the 2014-2018 period to implement the new system. 
CBO estimates that the additional funding would be needed for 
additional staff to handle the increased fallout rate (the 
number of individuals who are initially not verified as 
eligible for employment) under the mandatory system and for 
additional technological components.
    Costs to Other Federal Agencies. H.R. 1772 would require 
Federal agencies to verify the employment eligibility of 
current employees. Federal agencies are now required to verify 
the employment eligibility of new employees, but those hired 
before 2007 were not required to be verified. Currently, there 
are just over 4.5 million Federal Government employees 
(including military personnel), and the employment eligibility 
of about 3.5 million of those employees would need to be 
verified under H.R. 1772. CBO estimates that verifying those 
employees would cost Federal agencies about $20 million over 
2014-2018 period.
Direct Spending
    CBO and JCT estimate that enacting H.R. 1772 would decrease 
net direct spending by about $9 billion over the 2014-2023 
period.
    Refundable Tax Credits. JCT estimates that enacting H.R. 
1772 would reduce outlays for refundable credits by about $9 
billion over the 2014-2023 period. JCT expects that 
implementing the proposed system of mandatory verification for 
employment eligibility would cause more workers to be paid 
outside of the tax system. As a result, fewer workers would 
claim refundable income tax credits, primarily the child tax 
credit. (If refundable tax credits exceed a taxpayer's other 
income tax liability, the excess may be refunded to the 
taxpayer, with the amount of the refund classified as outlays 
in the Federal budget.)
    Compensation for Errors. H.R. 1772 would require employers 
to fire employees who are determined to be ineligible for 
employment by the new verification system. Under the bill, 
individuals who lost their employment because of an error in 
the new system could seek compensation through the Federal Tort 
Claims Act (FTCA). (Under FTCA, the Federal Government waives 
its sovereign immunity and consents to being sued in Federal 
courts in certain cases.)
    CBO expects that the size of compensation awards for such 
errors would primarily stem from employees' lost wages. We 
expect that affected employees would be compensated for about 3 
months' salary. Payments would probably be higher in the 
initial years and decline over the 10-year period. Those 
amounts would be paid through the government's Judgment Fund 
(which is a permanent, indefinite appropriation for claims and 
judgments against the United States). Based on information from 
SSA about the system's likely error rate and data on wages from 
the Bureau of Labor Statistics and using an average of about 3 
months of lost wages per successful claim, CBO expects that the 
Judgment Fund would pay claims totaling about $70 million over 
the 2014-2023 period.
Revenues
    CBO and JCT estimate that enacting H.R. 1772 would increase 
on-budget revenues from income and payroll taxes and civil 
penalties by about $49 billion over the 2014-2023 period and 
would decrease off-budget (Social Security payroll tax) 
revenues by about $88 billion over that period. Thus, we 
estimate that the net revenue loss to the unified budget would 
total $39 billion over the 10-year period.
    Income and Payroll Tax Revenues. Almost all of the total 
estimated effect on revenues of H.R. 1772 reflects JCT's 
expectation that the mandatory verification of employment 
authorization would result in some undocumented workers being 
paid outside of the tax system--that is, they would move into 
the underground economy.
    Under current law, some employers withhold income and 
payroll taxes from the wages of unauthorized workers and 
deposit those amounts in the Treasury, where they are 
classified as Federal revenues. Under H.R. 1772, some employers 
would decrease those tax withholdings as some workers move 
outside of the tax system. A substantial portion of those 
estimated revenue reductions--$88 billion over 10 years, JCT 
estimates--is attributed to lower off-budget revenues from 
Social Security payroll taxes. Those revenue losses would be 
partially offset because employers whose workers move outside 
the tax system would have fewer wage deductions and therefore 
higher taxable business profits on their income-tax returns, 
boosting their income taxes. On net, JCT estimates that on-
budget revenues would increase by about $49 billion.
    Civil Penalties. H.R. 1772 would increase the minimum and 
maximum civil fines imposed under current law on employers who 
violate requirements for verifying the identity and authority 
to work of individuals that they hire. As a result of those 
changes, CBO estimates that civil penalties, which are recorded 
in the budget as revenues, would increase by about $0.1 billion 
over the 2014-2023 period.

                      PAY-AS-YOU-GO CONSIDERATIONS

    The Statutory Pay-As-You-Go Act of 2010 establishes budget-
reporting and enforcement procedures for legislation affecting 
direct spending or revenues. The net changes in outlays and 
revenues that are subject to those pay-as-you-go procedures are 
shown in the following table. Only on-budget changes to outlays 
or revenues are subject to pay-as-you-go procedures.


            INTERGOVERNMENTAL AND THE PRIVATE SECTOR IMPACT

    H.R. 1772 would impose intergovernmental and private-sector 
mandates, as defined in UMRA. The bill would require employers 
and other entities that hire, recruit, or refer individuals for 
employment to verify the employment eligibility of potential 
employees and some current employees. In some cases, the same 
mandate would apply to both public and private-sector entities; 
in other cases, only one sector would face the mandate. Because 
of the number of public employees that would need to be 
verified in a short amount of time, CBO estimates that the 
aggregate annual cost for those entities would exceed the 
intergovernmental threshold ($75 million in 2013) in fiscal 
year 2014. Many private-sector entities also would be affected 
by the bill, and CBO estimates that the aggregate annual costs 
of the mandates imposed on those entities would exceed the 
private-sector threshold ($150 million in 2013) beginning in 
2016.

        MANDATES THAT APPLY TO BOTH PUBLIC AND PRIVATE ENTITIES

    Verifying Work Eligibility. The bill would impose 
intergovernmental and private-sector mandates on many employers 
and other entities that hire, recruit, or refer individuals for 
employment in the United States by requiring them to 
participate in the electronic verification system to confirm 
the work authorization of those individuals. Some employers 
would need to verify all current employees as well as future 
hires, while others would only be required to verify future 
hires.
    Current Employees. All public and some private employers 
would be required to confirm, within 6 months after the bill is 
enacted, the work authorization of current employees who have 
not been verified under the current employment verification 
program. Based on Census data and information from 
organizations representing state governments, CBO estimates 
that about 18 million current public employees would need to be 
verified. CBO estimates that the average cost would be about $5 
per person and the total cost for public entities to comply 
with the mandate would be about $90 million in fiscal year 
2014.
    Current employees working for private employers that would 
need to be verified include certain employees who require a 
Federal security clearance. According to the Department of 
Homeland Security and the National Infrastructure Advisory 
Council, employers that are generally considered part of the 
critical infrastructure already participate in the current 
employment verification program. Many of those employers are 
likely to employ workers with a Federal security clearance. 
Future regulations would determine the number of current 
employees who would be required to have their work 
authorization confirmed. Therefore, the incremental costs of 
the additional verifications are uncertain but would probably 
be small relative to the annual threshold for private-sector 
mandates.
    Newly Hired Employees. The bill would require all public 
and private employers to verify the work eligibility of newly 
hired employees as well as those whose temporary employment 
authorization was expiring. In addition, employers would have 
to maintain a record of the verification for such employees for 
a specific amount of time in a form that would be available for 
government inspection. The requirements would begin 6 months 
after the bill is enacted for some employers and would be 
phased-in over 2 years for other employers depending on the 
number of their employees. Entities that recruit or refer 
workers would have to verify job candidates within 1 year of 
enactment, and employers that employ agricultural workers would 
have to verify new employees within 2 years of enactment.
    Currently, 20 states require some public entities to verify 
work eligibility of new hires. CBO estimates that once all 
public entities are subject to the verification requirements, 
about 2 million public employees that are not currently 
required by state law to be verified would need to meet the new 
requirements each year. We estimate that the average cost for 
verifying work eligibility would be about $5 per person, so the 
cost for public entities to comply with this mandate would be 
about $10 million annually.
    Based on data from the Bureau of Labor Statistics, CBO 
expects that for private entities the number of verifications 
for newly hired employees and employees requiring repeat 
verifications would rise to about 50 million in 2016. Also, 
based on that data, CBO estimates that the direct costs to 
comply with the verification requirement could total $200 
million or more annually from 2016 through 2018 and, thus, 
would exceed the annual threshold for private-sector entities 
in those years.
Mandates Affecting Only State, Local, or Tribal Entities
    The bill would preempt state and local laws related to work 
verification. Although the preemption would limit the 
application of state and local laws, it would impose no duty on 
state or local governments that would result in significant 
spending or loss of revenues.
Mandates Affecting Only Private-Sector Entities
    Under the bill, individuals would be required to provide 
specific documentation to establish their identity for use when 
verifying employment eligibility. The documents required would 
include most standard forms of identification including 
passports, permanent residence cards, state drivers' licenses, 
and military identification cards. CBO estimates that the cost 
to comply with that mandate would be relatively small.

                         ESTIMATE PREPARED BY:

Federal Spending: Mark Grabowicz (DHS); Matthew Pickford (SSA, 
    other Federal agencies)
Federal Revenues: Barbara Edwards and staff of the Joint 
    Committee on Taxation
Impact on State, Local, and Tribal Governments: Melissa Merrell
Impact on the Private Sector: Paige Piper/Bach

                         ESTIMATE APPROVED BY:

Theresa Gullo
Deputy Assistant Director for Budget Analysis

                    Duplication of Federal Programs

    No provision of H.R.1772 establishes or reauthorizes a 
program of the Federal Government known to be duplicative of 
another Federal program, a program that was included in
    any report from the Government Accountability Office to 
Congress pursuant to section 21 of Public Law 111-139, or a 
program related to a program identified in the most recent 
Catalog of Federal Domestic Assistance.

                  Disclosure of Directed Rule Makings

    The Committee estimates that H.R.1772 specifically directs 
the U.S. Secretary of Homeland Security to conduct one rule 
making proceedings within the meaning of 5 U.S.C. 551.

                    Performance Goals and Objectives

    The Committee states that pursuant to clause 3(c)(4) of 
rule XIII of the Rules of the House of Representatives, 
H.R.1772 reforms the employment eligibility verification 
process and requires all employers hiring or employing 
individuals in the United States to use E-Verify to check the 
employment eligibility of their new hires.

                          Advisory on Earmarks

    In accordance with clause 9 of rule XXI of the Rules of the 
House of Representatives, H.R. 1772 does not contain any 
congressional earmarks, limited tax benefits, or limited tariff 
benefits as defined in clause 9(e), 9(f), or 9(g) of Rule XXI.

                      Section-by-Section Analysis

    The following discussion describes the bill as reported by 
the Committee.
Sec. 1. Short title.
    Section 1 sets forth the short title of the bill as the 
``Legal Workforce Act.
Sec. 2. Employment Eligibility Verification Process.
    Section 2(a) requires that an employer attest, in an 
electronic or paper form, that they have verified the 
employment eligibility of the individual seeking employment by 
obtaining the individual's Social Security number (SSN) and/or 
immigrant identification number and examining acceptable 
documents presented by the individual to establish work 
eligibility and identity. This section also requires that the 
employer use E-Verify to check the work eligibility of the 
individual and reduces the number of acceptable documents for 
proof of work eligibility and identity. Section 2 also requires 
that the employer retain a paper, microfiche or electronic copy 
of the attestation form for the later of 3 years or 1 year 
after the date of employment termination. And the section 
requires the employer to record the E-Verify verification code 
for employees who receive a confirmation or final 
nonconfirmation of work authorization. It also allows an 
employee who receives a tentative nonconfirmation to use the 
secondary verification process in place under E-Verify. The 
section provides that an employer may terminate employment of 
an individual who receives a final nonconfirmation and if they 
do not terminate employment they must notify DHS of the 
decision not to do so (which creates a rebuttable presumption 
of noncompliance if the employer does not terminate 
employment). In addition, Section 2(a) allows an employer to 
check the employment eligibility of a prospective employee 
between the date of the offer of a job and 3 days after the 
date of hire and allows the employer to condition a job offer 
on an E-Verify confirmation.
    The section phases-in mandatory E-Verify participation for 
new hires in 6-month increments beginning on the date 6 months 
after enactment, for businesses having more than 10,000 
employees; 12 months after enactment for employers having 
between 500 and 9,999 employees and for as are recruiters and 
referrers; 18 months after enactment for employers having 
between 20 and 499 employees; and 24 months after enactment for 
employers having between 1 and 19 employees.
    On the date of enactment, those employers who are currently 
required by Federal law to use E-Verify (for example certain 
Federal contractors, the Executive Branch, the Legislative 
Branch) will continue to be required to use E-Verify. This 
section requires that employers must use E-Verify for employees 
performing ``agricultural labor or services,'' as defined in 
section 3(f) of the Fair Labor Standards Act of 1938 (29 U.S.C. 
203(f)), within 24 months of the date of enactment. The section 
retains the requirements of the Federal Acquisition Rule (FAR) 
as set out by Executive Order 13465 regarding certain Federal 
contractors who must currently use E-Verify. Section 2 also 
requires employers to verify the work eligibility of aliens 
with temporary work authorization at some point within the 
three business days after the date on which their work 
authorization expires. This requirement is phased-in according 
to the size of an employer over a 24-month period.
    Regarding previously hired individuals, this section 
requires the work eligibility of a current employee to be 
verified if they 1) work for the Federal Government, a State or 
local government, a critical infrastructure site, or on a 
Federal or State contract (though if such an employee has 
already been checked by the current employer using E-Verify, 
then the employee does not have to be rechecked); or 2) submit 
a SSN that DHS determines has a pattern of unusual multiple 
use. The section allows employers to voluntarily verify the 
work authorization of their current workforce as long as all 
employees in the same geographic location or employed within 
the same job category as the employee for whom verification is 
sought are also verified. Section 2 also allows an employer 
using, or who wants to use, the E-Verify pilot program 
established by the Illegal Immigration Reform and Immigrant 
Responsibility Act of 1996, to use the new system created by 
the bill in lieu of the pilot program even if not yet required 
to use the new system.
    The section prohibits the information provided under the 
employment eligibility confirmation process from being used for 
any reason other than the enforcement of the bill's provisions 
and certain criminal provisions. In addition, this section 
provides that an employer has complied with the requirements 
set out in this section if there was a good faith attempt to 
comply with the requirements. The safe harbor does not apply 
when the employer is engaging in a pattern or practice of 
violations. This section allows the DHS Secretary a one-time 6-
month extension of the implementation deadlines if the 
Secretary certifies to Congress that the employment eligibility 
verification system will not be ready within 6 months of the 
date of enactment of the Legal Workforce Act. The Committee 
believes that franchising is a method of doing business where 
an independent entrepreneur pays a fee for the right to use a 
brand name and a business model. Franchisees make their own 
independent decisions about hiring employees and are required 
to use E-Verify, and franchisors have no responsibility or 
liability for those decisions and are not obligated to use E-
Verify for employees of their franchisees.
    Section 2(b) defines the ``date of hire'' as the date of 
actual commencement of employment for wages or other 
remuneration.
Sec. 3. Employment Eligibility Verification System.
    Section 3 requires the DHS Secretary to create an 
employment eligibility verification system (patterned on the 
current E-Verify pilot program) that is accessible by telephone 
and Internet. The system must provide a confirmation or 
tentative nonconfirmation within three working days of the 
employer's initial inquiry. The system must provide a secondary 
process in cases of a tentative nonconfirmation so that the 
employer receives a final confirmation or nonconfirmation 
within ten working days of the notice to the employee that 
there is a tentative nonconfirmation. This section also allows 
the Secretary to extend that deadline once on a case by case 
basis for a period of ten working days, but the Secretary must 
notify the employer and employee of such extension and requires 
the Secretary in consultation with Commissioner to create a 
standard process for such extension and notification. The 
system must include safeguards for privacy, against unlawful 
discriminatory practices and against unauthorized disclosure of 
personal information.
    Section 3 also reiterates that nothing in the bill shall be 
determined to authorize a national identification card. This 
section also requires that SSA and DHS update E-Verify database 
information in a prompt manner to promote maximum accuracy, 
allows the DHS Secretary to require certain entities associated 
with critical infrastructure to use E-Verify if the use will 
assist in the protection of the critical infrastructure and 
provides that if a work eligible individual claims that they 
were wrongly fired due to an incorrect E-Verify non-
confirmation, they may seek remedies under the Federal Tort 
Claims Act. Lastly this section prohibits class action lawsuits 
by individuals who allege that they would not have been 
dismissed from a job but for an error of the system.
Sec. 4. Recruitment and Referral.
    Section 4 requires union hiring halls, day labor sites and 
State workforce agencies to use E-Verify when recruiting or 
referring an individual for employment. This provision ensures 
that employers won't have to waste resources hiring persons 
through these mechanisms who are not legally eligible to work. 
This provision protects employers in instances in which they 
maintain a collective bargaining agreement with a union and the 
union hiring hall refers an individual for employment but the 
individual is found by through an E-Verify check not to be work 
authorized. In such an instance, the employer would otherwise 
be faced with the choice of either having to violate the law by 
knowingly employing an individual who is not work authorized, 
or violate the collective bargaining agreement by not hiring 
the individual.
Sec. 5. Good Faith Defense.
    This section provides a safe harbor for employers who use 
E-Verify in good faith. It also provides that if an employer 
proves that the employer uses a reasonable, secure and 
established technology to authenticate the identity of a new 
employee, that fact shall be taken into consideration for 
purposes of determining good faith use of the system.
Sec. 6. Preemption and States' Rights.
    In order to shield businesses from having to comply with 
multiple and possibly inconsistent E-Verify laws, section 6 
creates one Federal law requiring E-Verify use by preempting 
State laws mandating E-Verify use for employment eligibility 
purposes. However the section promotes States' rights by giving 
States a specific role in helping to enforce the E-Verify 
requirements. The States are allowed to investigate violations 
of this Act and enforce the provisions pursuant to the Federal 
structure. This in turn incentivizes States to help enforce E-
Verify requirements by allowing the States to retain the fines 
assessed under this Act. This section clarifies that an 
employer may be subject only to a State investigation and 
enforcement action or a Federal investigation and enforcement 
action for the same violation of E-Verify laws. Section 6 also 
retains the ability under current law for States and localities 
to condition business licenses on the requirement that the 
employer use E-Verify in accordance with the requirements of 
this Act (274A(h)(2) of the INA). This provision, a balancing 
of many competing interests, would allow State and local 
governments to exercise their authority over business licensing 
(and similar laws) as a penalty upon a business after 
confirming that such business has not enrolled in E-Verify when 
mandated to do so under Federal law. However, States and 
localities do not have their own enforcement or investigative 
authority regarding employment verification obligations. While 
State (or local) business licensing authority does not allow 
States to set up an enforcement scheme parallel to the Federal 
Government's regarding employment verification obligations, 
State (and local) business licensing applications, renewals or 
other related or similar processes may require confirmation of 
whether or not an employer is participating in the electronic 
verification system (E-Verify). Additionally, a State (or 
local) government can restrict business licenses after 
receiving confirmation from the Secretary of Homeland Security 
that a business under its licensing jurisdiction has been found 
by DHS to be in violation of the Legal Workforce Act. While 
States are prohibited from enacting a parallel enforcement or 
penalties scheme, they may choose, at their own expense, to 
apply the Federal enforcement scheme, as described in Federal 
implementing rules and regulations.
Sec. 7. Repeal of Current Law.
    This section repeals Subtitle A of title IV of the Illegal 
Immigration Reform and Immigrant Responsibility Act of 1996, in 
which E-Verify was created as a pilot. It is actually placed in 
the notes to 8 U.S.C. Sec. 1324A and because this bill places 
E-Verify in the actual text of 1324A, there is no longer a need 
for Subtitle A of title IV of IIRIRA.
Sec. 8. Penalties.
    This section increases the civil and criminal penalties for 
employers who violate the laws prohibiting illegal hiring and 
employment. Since the current low fines are often seen by bad 
actors who want to hire illegal immigrant employees as ``the 
cost of doing business,'' higher fines are a priority for the 
Committee in order to discourage intentional illegal immigrant 
hiring and employment. Section 8 also allows, as a penalty, DHS 
to bar a business from receiving Federal contracts, grants or 
other cooperative agreements, if they repeatedly violate the 
requirements in this bill or if they are convicted of a crime 
under this bill. If the business has a contract, grant or 
agreement at the time, then DHS and the Attorney General must 
consider the views of the agency with which the business has a 
contract, grant or agreement to determine whether the business 
should be debarred. Finally, this section creates an office 
within Immigration and Customs Enforcement (ICE), whose sole 
purpose is to respond to (within five business days of the 
complaint), and investigate, State and local governmental 
agency complaints about businesses hiring and/or employing 
illegal immigrants.
Sec. 9. Fraud and Misuse of Documents.
    This section amends U.S. criminal code, at 18 U.S.C. 
Sec. 1546(b), to clarify that employers or prospective 
employees who submit for work eligibility purposes a Social 
Security number or documents related to identity or work 
authorization, knowing that the Social Security number or 
documents do not belong to the person presenting them, are 
subject to criminal penalties.
Sec. 10. Protection of Social Security Administration Programs.
    Section 10(a) requires DHS to enter into an annual 
agreement with the SSA to reimburse, in a timely manner, SSA 
for the costs SSA incurs in operating their part of E-Verify. 
In previous years, interagency negotiations over such 
agreements stalled and the Committee believes that fair and 
reasonable reimbursement should take place each year.
    Section 10(b) provides that if such an agreement is not 
reached during the fiscal year, then the agreement in place for 
the prior fiscal year remains in effect until a new agreement 
is reached.
Sec. 11. Fraud Prevention.
    Given the propensity of identity theft in the realm of 
hiring and employment, the Committee believes that it is 
important to provide individuals avenues to help protect their 
identities from being used by unscrupulous individuals to find 
and engage in employment. This Section provides such avenues 
through which to ``lock'' SSNs for work eligibility purposes.
    Section 11(a) requires DHS to ``lock'' a SSN that is 
subject to unusual multiple use so that if the owner attempts 
to get a job, they are alerted that the SSN may have been 
compromised. The phrase ``unusual multiple use'' does not mean 
simply that a number is used multiple times, as many legitimate 
SSN owners have more than one job. Instead, the phrase covers 
situations that present clear evidence of illegal SSN use--for 
instance, use of a SSN multiple times in different geographic 
regions and different employment industries.
    Section 11(b) requires DHS to allow individuals to 
voluntarily ``lock'' their own SSN so that it cannot be used to 
verify work eligibility, in order to combat identity theft.
    Section 11(c) requires DHS to allow parents or legal 
guardians to ``lock'' the SSN of their minor child so that it 
cannot be used for employment eligibility purposes, in order to 
combat theft of the minor child's identity. Such theft of 
children's identities is on the rise.
Sec. 12. Use of Employment Eligibility Verification Photo Tool.
    This section requires that an employer who utilizes the 
photo matching tool that is part of E-Verify, to match the 
photo tool photograph to both the photograph on the identity or 
employment eligibility document provided by the employee and to 
the face of the employee submitting the document for employment 
verification purposes. Current USCIS procedures only allow the 
employer to match the photo matching tool photograph to the 
photograph on the document submitted to the employee, not to 
the actual face of the employee. This is nonsensical if the 
goal is to actually prevent identity theft.
Sec. 13. Identity Authentication Employment Eligibility Verification 
        Pilot Programs.
    This section requires DHS to conduct at least two pilot 
programs that allow employers to use an identity-
authentication-based technology for work eligibility check 
purposes. The programs must each use a separate and distinct 
technology. This section also requires DHS to report to the 
House and Senate Judiciary Committees on the findings of the 
pilot programs within 12 months of the programs' completions.
Sec. 14. Inspector General Audits.
    Section 14(a) requires, in order to help identify misuse of 
SSNs within the current workforce, the SSA Inspector General to 
complete audits of certain categories of SSNs for which there 
is a likelihood of use by unauthorized workers.
    Section 14(b) requires such audits to be submitted to the 
House Committee on Ways and Means and the Senate Finance 
Committee who will determine the appropriate information to be 
given to DHS in order to investigate incidents of SSN misuse 
and unauthorized employment.

         Changes in Existing Law Made by the Bill, as Reported

    In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italics, existing law in which no change 
is proposed is shown in roman):

                    IMMIGRATION AND NATIONALITY ACT



           *       *       *       *       *       *       *
TITLE II--IMMIGRATION

           *       *       *       *       *       *       *


Chapter 8--General Penalty Provisions

           *       *       *       *       *       *       *


                     unlawful employment of aliens

    Sec. 274A. (a) Making Employment of Unauthorized Aliens 
Unlawful.--
            (1) In general.--It is unlawful for a person or 
        other entity--
                    (A) to hire, or to recruit or refer [for a 
                fee], for employment in the United States an 
                alien knowing the alien is an unauthorized 
                alien (as defined in subsection (h)(3)) with 
                respect to such employment, or
                    [(B)(i) to hire for employment in the 
                United States an individual without complying 
                with the requirements of subsection (b) or (ii) 
                if the person or entity is an agricultural 
                association, agricultural employer, or farm 
                labor contractor (as defined in section 3 of 
                the Migrant and Seasonal Agricultural Worker 
                Protection Act), to hire, or to recruit or 
                refer for a fee, for employment in the United 
                States an individual without complying with the 
                requirements of subsection (b).]
                    (B) to hire, continue to employ, or to 
                recruit or refer for employment in the United 
                States an individual without complying with the 
                requirements of subsection (b).
            (2) Continuing employment.--It is unlawful for a 
        person or other entity, [after hiring an alien for 
        employment in accordance with paragraph (1),] after 
        complying with paragraph (1), to continue to employ the 
        alien in the United States knowing the alien is (or has 
        become) an unauthorized alien with respect to such 
        employment.
            [(3) Defense.--A person or entity that establishes 
        that it has complied in good faith with the 
        requirements of subsection (b) with respect to the 
        hiring, recruiting, or referral for employment of an 
        alien in the United States has established an 
        affirmative defense that the person or entity has not 
        violated paragraph (1)(A) with respect to such hiring, 
        recruiting, or referral.]
            (3) Good faith defense.--
                    (A) Defense.--An employer (or person or 
                entity that hires, employs, recruits, or refers 
                (as defined in subsection (h)(5)), or is 
                otherwise obligated to comply with this 
                section) who establishes that it has complied 
                in good faith with the requirements of 
                subsection (b)--
                            (i) shall not be liable to a job 
                        applicant, an employee, the Federal 
                        Government, or a State or local 
                        government, under Federal, State, or 
                        local criminal or civil law for any 
                        employment-related action taken with 
                        respect to a job applicant or employee 
                        in good-faith reliance on information 
                        provided through the system established 
                        under subsection (d); and
                            (ii) has established compliance 
                        with its obligations under 
                        subparagraphs (A) and (B) of paragraph 
                        (1) and subsection (b) absent a showing 
                        by the Secretary of Homeland Security, 
                        by clear and convincing evidence, that 
                        the employer had knowledge that an 
                        employee is an unauthorized alien.
                    (B) Mitigation element.--For purposes of 
                subparagraph (A)(i), if an employer proves by a 
                preponderance of the evidence that the employer 
                uses a reasonable, secure, and established 
                technology to authenticate the identity of the 
                new employee, that fact shall be taken into 
                account for purposes of determining good faith 
                use of the system established under subsection 
                (d).
                    (C) Failure to seek and obtain 
                verification.--Subject to the effective dates 
                and other deadlines applicable under subsection 
                (b), in the case of a person or entity in the 
                United States that hires, or continues to 
                employ, an individual, or recruits or refers an 
                individual for employment, the following 
                requirements apply:
                            (i) Failure to seek verification.--
                                    (I) In general.--If the 
                                person or entity has not made 
                                an inquiry, under the mechanism 
                                established under subsection 
                                (d) and in accordance with the 
                                timeframes established under 
                                subsection (b), seeking 
                                verification of the identity 
                                and work eligibility of the 
                                individual, the defense under 
                                subparagraph (A) shall not be 
                                considered to apply with 
                                respect to any employment, 
                                except as provided in subclause 
                                (II).
                                    (II) Special rule for 
                                failure of verification 
                                mechanism.--If such a person or 
                                entity in good faith attempts 
                                to make an inquiry in order to 
                                qualify for the defense under 
                                subparagraph (A) and the 
                                verification mechanism has 
                                registered that not all 
                                inquiries were responded to 
                                during the relevant time, the 
                                person or entity can make an 
                                inquiry until the end of the 
                                first subsequent working day in 
                                which the verification 
                                mechanism registers no 
                                nonresponses and qualify for 
                                such defense.
                            (ii) Failure to obtain 
                        verification.--If the person or entity 
                        has made the inquiry described in 
                        clause (i)(I) but has not received an 
                        appropriate verification of such 
                        identity and work eligibility under 
                        such mechanism within the time period 
                        specified under subsection (d)(2) after 
                        the time the verification inquiry was 
                        received, the defense under 
                        subparagraph (A) shall not be 
                        considered to apply with respect to any 
                        employment after the end of such time 
                        period.

           *       *       *       *       *       *       *

    [(b) Employment Verification System.--The requirements 
referred to in paragraphs (1)(B) and (3) of subsection (a) are, 
in the case of a person or other entity hiring, recruiting, or 
referring an individual for employment in the United States, 
the requirements specified in the following three paragraphs:
            [(1) Attestation after examination of 
        documentation.--
                    [(A) In general.--The person or entity must 
                attest, under penalty of perjury and on a form 
                designated or established by the Attorney 
                General by regulation, that it has verified 
                that the individual is not an unauthorized 
                alien by examining--
                            [(i) a document described in 
                        subparagraph (B), or
                            [(ii) a document described in 
                        subparagraph (C) and a document 
                        described in subparagraph (D).
                A person or entity has complied with the 
                requirement of this paragraph with respect to 
                examination of a document if the document 
                reasonably appears on its face to be genuine. 
                If an individual provides a document or 
                combination of documents that reasonably 
                appears on its face to be genuine and that is 
                sufficient to meet the requirements of the 
                first sentence of this paragraph, nothing in 
                this paragraph shall be construed as requiring 
                the person or entity to solicit the production 
                of any other document or as requiring the 
                individual to produce such another document.
                    [(B) Documents establishing both employment 
                authorization and identity.--A document 
                described in this subparagraph is an 
                individual's--
                            [(i) United States passport;
                            [(ii) resident alien card, alien 
                        registration card, or other document 
                        designated by the Attorney General, if 
                        the document--
                                    [(I) contains a photograph 
                                of the individual and such 
                                other personal identifying 
                                information relating to the 
                                individual as the Attorney 
                                General finds, by regulation, 
                                sufficient for purposes of this 
                                subsection,
                                    [(II) is evidence of 
                                authorization of employment in 
                                the United States, and
                                    [(III) contains security 
                                features to make it resistant 
                                to tampering, counterfeiting, 
                                and fraudulent use.
                    [(C) Documents evidencing employment 
                authorization.--A document described in this 
                subparagraph is an individual's--
                            [(i) social security account number 
                        card (other than such a card which 
                        specifies on the face that the issuance 
                        of the card does not authorize 
                        employment in the United States); or
                            [(ii) other documentation 
                        evidencing authorization of employment 
                        in the United States which the Attorney 
                        General finds, by regulation, to be 
                        acceptable for purposes of this 
                        section.
                    [(D) Documents establishing identity of 
                individual.--A document described in this 
                subparagraph is an individual's--
                            [(i) driver's license or similar 
                        document issued for the purpose of 
                        identification by a State, if it 
                        contains a photograph of the individual 
                        or such other personal identifying 
                        information relating to the individual 
                        as the Attorney General finds, by 
                        regulation, sufficient for purposes of 
                        this section; or
                            [(ii) in the case of individuals 
                        under 16 years of age or in a State 
                        which does not provide for issuance of 
                        an identification document (other than 
                        a driver's license) referred to in 
                        clause (i), documentation of personal 
                        identity of such other type as the 
                        Attorney General finds, by regulation, 
                        provides a reliable means of 
                        identification.
                    [(E) Authority to prohibit use of certain 
                documents.--If the Attorney General finds, by 
                regulation, that any document described in 
                subparagraph (B), (C), or (D) as establishing 
                employment authorization or identity does not 
                reliably establish such authorization or 
                identity or is being used fraudulently to an 
                unacceptable degree, the Attorney General may 
                prohibit or place conditions on its use for 
                purposes of this subsection.
            [(2) Individual attestation of employment 
        authorization.--The individual must attest, under 
        penalty of perjury on the form designated or 
        established for purposes of paragraph (1), that the 
        individual is a citizen or national of the United 
        States, an alien lawfully admitted for permanent 
        residence, or an alien who is authorized under this Act 
        or by the Attorney General to be hired, recruited, or 
        referred for such employment.
            [(3) Retention of verification form.--After 
        completion of such form in accordance with paragraphs 
        (1) and (2), the person or entity must retain the form 
        and make it available for inspection by officers of the 
        Service, the Special Counsel for Immigration-Related 
        Unfair Employment Practices, or the Department of Labor 
        during a period beginning on the date of the hiring, 
        recruiting, or referral of the individual and ending--
                    [(A) in the case of the recruiting or 
                referral for a fee (without hiring) of an 
                individual, three years after the date of the 
                recruiting or referral, and
                    [(B) in the case of the hiring of an 
                individual--
                            [(i) three years after the date of 
                        such hiring, or
                            [(ii) one year after the date the 
                        individual's employment is terminated,
                whichever is later.
            [(4) Copying of documentation permitted.--
        Notwithstanding any other provision of law, the person 
        or entity may copy a document presented by an 
        individual pursuant to this subsection and may retain 
        the copy, but only (except as otherwise permitted under 
        law) for the purpose of complying with the requirements 
        of this subsection.
            [(5) Limitation on use of attestation form.--A form 
        designated or established by the Attorney General under 
        this subsection and any information contained in or 
        appended to such form, may not be used for purposes 
        other than for enforcement of this Act and sections 
        1001, 1028, 1546, and 1621 of title 18, United States 
        Code.
            [(6) Good faith compliance.--
                    [(A) In general.--Except as provided in 
                subparagraphs (B) and (C), a person or entity 
                is considered to have complied with a 
                requirement of this subsection notwithstanding 
                a technical or procedural failure to meet such 
                requirement if there was a good faith attempt 
                to comply with the requirement.
                    [(B) Exception if failure to correct after 
                notice.--Subparagraph (A) shall not apply if--
                            [(i) the Service (or another 
                        enforcement agency) has explained to 
                        the person or entity the basis for the 
                        failure,
                            [(ii) the person or entity has been 
                        provided a period of not less than 10 
                        business days (beginning after the date 
                        of the explanation) within which to 
                        correct the failure, and
                            [(iii) the person or entity has not 
                        corrected the failure voluntarily 
                        within such period.
                    [(C) Exception for pattern or practice 
                violators.--Subparagraph (A) shall not apply to 
                a person or entity that has or is engaging in a 
                pattern or practice of violations of subsection 
                (a)(1)(A) or (a)(2).]
    (b) Employment Eligibility Verification Process.--
            (1) New hires, recruitment, and referral.--The 
        requirements referred to in paragraphs (1)(B) and (3) 
        of subsection (a) are, in the case of a person or other 
        entity hiring, recruiting, or referring an individual 
        for employment in the United States, the following:
                    (A) Attestation after examination of 
                documentation.--
                            (i) Attestation.--During the 
                        verification period (as defined in 
                        subparagraph (E)), the person or entity 
                        shall attest, under penalty of perjury 
                        and on a form, including electronic and 
                        telephonic formats, designated or 
                        established by the Secretary by 
                        regulation not later than 6 months 
                        after the date of the enactment of the 
                        Legal Workforce Act, that it has 
                        verified that the individual is not an 
                        unauthorized alien by--
                                    (I) obtaining from the 
                                individual the individual's 
                                social security account number 
                                and recording the number on the 
                                form (if the individual claims 
                                to have been issued such a 
                                number), and, if the individual 
                                does not attest to United 
                                States nationality under 
                                subparagraph (B), obtaining 
                                such identification or 
                                authorization number 
                                established by the Department 
                                of Homeland Security for the 
                                alien as the Secretary of 
                                Homeland Security may specify, 
                                and recording such number on 
                                the form; and
                                    (II) examining--
                                            (aa) a document 
                                        relating to the 
                                        individual presenting 
                                        it described in clause 
                                        (ii); or
                                            (bb) a document 
                                        relating to the 
                                        individual presenting 
                                        it described in clause 
                                        (iii) and a document 
                                        relating to the 
                                        individual presenting 
                                        it described in clause 
                                        (iv).
                            (ii) Documents evidencing 
                        employment authorization and 
                        establishing identity.--A document 
                        described in this subparagraph is an 
                        individual's--
                                    (I) unexpired United States 
                                passport or passport card;
                                    (II) unexpired permanent 
                                resident card that contains a 
                                photograph;
                                    (III) unexpired employment 
                                authorization card that 
                                contains a photograph;
                                    (IV) in the case of a 
                                nonimmigrant alien authorized 
                                to work for a specific employer 
                                incident to status, a foreign 
                                passport with Form I-94 or Form 
                                I-94A, or other documentation 
                                as designated by the Secretary 
                                specifying the alien's 
                                nonimmigrant status as long as 
                                the period of status has not 
                                yet expired and the proposed 
                                employment is not in conflict 
                                with any restrictions or 
                                limitations identified in the 
                                documentation;
                                    (V) passport from the 
                                Federated States of Micronesia 
                                (FSM) or the Republic of the 
                                Marshall Islands (RMI) with 
                                Form I-94 or Form I-94A, or 
                                other documentation as 
                                designated by the Secretary, 
                                indicating nonimmigrant 
                                admission under the Compact of 
                                Free Association Between the 
                                United States and the FSM or 
                                RMI; or
                                    (VI) other document 
                                designated by the Secretary of 
                                Homeland Security, if the 
                                document--
                                            (aa) contains a 
                                        photograph of the 
                                        individual and 
                                        biometric 
                                        identification data 
                                        from the individual and 
                                        such other personal 
                                        identifying information 
                                        relating to the 
                                        individual as the 
                                        Secretary of Homeland 
                                        Security finds, by 
                                        regulation, sufficient 
                                        for purposes of this 
                                        clause;
                                            (bb) is evidence of 
                                        authorization of 
                                        employment in the 
                                        United States; and
                                            (cc) contains 
                                        security features to 
                                        make it resistant to 
                                        tampering, 
                                        counterfeiting, and 
                                        fraudulent use.
                            (iii) Documents evidencing 
                        employment authorization.--A document 
                        described in this subparagraph is an 
                        individual's social security account 
                        number card (other than such a card 
                        which specifies on the face that the 
                        issuance of the card does not authorize 
                        employment in the United States).
                            (iv) Documents establishing 
                        identity of individual.--A document 
                        described in this subparagraph is--
                                    (I) an individual's 
                                unexpired State issued driver's 
                                license or identification card 
                                if it contains a photograph and 
                                information such as name, date 
                                of birth, gender, height, eye 
                                color, and address;
                                    (II) an individual's 
                                unexpired U.S. military 
                                identification card;
                                    (III) an individual's 
                                unexpired Native American 
                                tribal identification document 
                                issued by a tribal entity 
                                recognized by the Bureau of 
                                Indian Affairs; or
                                    (IV) in the case of an 
                                individual under 18 years of 
                                age, a parent or legal 
                                guardian's attestation under 
                                penalty of law as to the 
                                identity and age of the 
                                individual.
                            (v) Authority to prohibit use of 
                        certain documents.--If the Secretary of 
                        Homeland Security finds, by regulation, 
                        that any document described in clause 
                        (i), (ii), or (iii) as establishing 
                        employment authorization or identity 
                        does not reliably establish such 
                        authorization or identity or is being 
                        used fraudulently to an unacceptable 
                        degree, the Secretary may prohibit or 
                        place conditions on its use for 
                        purposes of this paragraph.
                            (vi) Signature.--Such attestation 
                        may be manifested by either a hand-
                        written or electronic signature.
                    (B) Individual attestation of employment 
                authorization.--During the verification period 
                (as defined in subparagraph (E)), the 
                individual shall attest, under penalty of 
                perjury on the form designated or established 
                for purposes of subparagraph (A), that the 
                individual is a citizen or national of the 
                United States, an alien lawfully admitted for 
                permanent residence, or an alien who is 
                authorized under this Act or by the Secretary 
                of Homeland Security to be hired, recruited, or 
                referred for such employment. Such attestation 
                may be manifested by either a hand-written or 
                electronic signature. The individual shall also 
                provide that individual's social security 
                account number (if the individual claims to 
                have been issued such a number), and, if the 
                individual does not attest to United States 
                nationality under this subparagraph, such 
                identification or authorization number 
                established by the Department of Homeland 
                Security for the alien as the Secretary may 
                specify.
                    (C) Retention of verification form and 
                verification.--
                            (i) In general.--After completion 
                        of such form in accordance with 
                        subparagraphs (A) and (B), the person 
                        or entity shall--
                                    (I) retain a paper, 
                                microfiche, microfilm, or 
                                electronic version of the form 
                                and make it available for 
                                inspection by officers of the 
                                Department of Homeland 
                                Security, the Special Counsel 
                                for Immigration-Related Unfair 
                                Employment Practices, or the 
                                Department of Labor during a 
                                period beginning on the date of 
                                the recruiting or referral of 
                                the individual, or, in the case 
                                of the hiring of an individual, 
                                the date on which the 
                                verification is completed, and 
                                ending--
                                            (aa) in the case of 
                                        the recruiting or 
                                        referral of an 
                                        individual, 3 years 
                                        after the date of the 
                                        recruiting or referral; 
                                        and
                                            (bb) in the case of 
                                        the hiring of an 
                                        individual, the later 
                                        of 3 years after the 
                                        date the verification 
                                        is completed or one 
                                        year after the date the 
                                        individual's employment 
                                        is terminated; and
                                    (II) during the 
                                verification period (as defined 
                                in subparagraph (E)), make an 
                                inquiry, as provided in 
                                subsection (d), using the 
                                verification system to seek 
                                verification of the identity 
                                and employment eligibility of 
                                an individual.
                            (ii) Confirmation.--
                                    (I) Confirmation 
                                received.--If the person or 
                                other entity receives an 
                                appropriate confirmation of an 
                                individual's identity and work 
                                eligibility under the 
                                verification system within the 
                                time period specified, the 
                                person or entity shall record 
                                on the form an appropriate code 
                                that is provided under the 
                                system and that indicates a 
                                final confirmation of such 
                                identity and work eligibility 
                                of the individual.
                                    (II) Tentative 
                                nonconfirmation received.--If 
                                the person or other entity 
                                receives a tentative 
                                nonconfirmation of an 
                                individual's identity or work 
                                eligibility under the 
                                verification system within the 
                                time period specified, the 
                                person or entity shall so 
                                inform the individual for whom 
                                the verification is sought. If 
                                the individual does not contest 
                                the nonconfirmation within the 
                                time period specified, the 
                                nonconfirmation shall be 
                                considered final. The person or 
                                entity shall then record on the 
                                form an appropriate code which 
                                has been provided under the 
                                system to indicate a final 
                                nonconfirmation. If the 
                                individual does contest the 
                                nonconfirmation, the individual 
                                shall utilize the process for 
                                secondary verification provided 
                                under subsection (d). The 
                                nonconfirmation will remain 
                                tentative until a final 
                                confirmation or nonconfirmation 
                                is provided by the verification 
                                system within the time period 
                                specified. In no case shall an 
                                employer terminate employment 
                                of an individual because of a 
                                failure of the individual to 
                                have identity and work 
                                eligibility confirmed under 
                                this section until a 
                                nonconfirmation becomes final. 
                                Nothing in this clause shall 
                                apply to a termination of 
                                employment for any reason other 
                                than because of such a failure. 
                                In no case shall an employer 
                                rescind the offer of employment 
                                to an individual because of a 
                                failure of the individual to 
                                have identity and work 
                                eligibility confirmed under 
                                this subsection until a 
                                nonconfirmation becomes final. 
                                Nothing in this subclause shall 
                                apply to a recission of the 
                                offer of employment for any 
                                reason other than because of 
                                such a failure.
                                    (III) Final confirmation or 
                                nonconfirmation received.--If a 
                                final confirmation or 
                                nonconfirmation is provided by 
                                the verification system 
                                regarding an individual, the 
                                person or entity shall record 
                                on the form an appropriate code 
                                that is provided under the 
                                system and that indicates a 
                                confirmation or nonconfirmation 
                                of identity and work 
                                eligibility of the individual.
                                    (IV) Extension of time.--If 
                                the person or other entity in 
                                good faith attempts to make an 
                                inquiry during the time period 
                                specified and the verification 
                                system has registered that not 
                                all inquiries were received 
                                during such time, the person or 
                                entity may make an inquiry in 
                                the first subsequent working 
                                day in which the verification 
                                system registers that it has 
                                received all inquiries. If the 
                                verification system cannot 
                                receive inquiries at all times 
                                during a day, the person or 
                                entity merely has to assert 
                                that the entity attempted to 
                                make the inquiry on that day 
                                for the previous sentence to 
                                apply to such an inquiry, and 
                                does not have to provide any 
                                additional proof concerning 
                                such inquiry.
                                    (V) Consequences of 
                                nonconfirmation.--
                                            (aa) Termination or 
                                        notification of 
                                        continued employment.--
                                        If the person or other 
                                        entity has received a 
                                        final nonconfirmation 
                                        regarding an 
                                        individual, the person 
                                        or entity may terminate 
                                        employment of the 
                                        individual (or decline 
                                        to recruit or refer the 
                                        individual). If the 
                                        person or entity does 
                                        not terminate 
                                        employment of the 
                                        individual or proceeds 
                                        to recruit or refer the 
                                        individual, the person 
                                        or entity shall notify 
                                        the Secretary of 
                                        Homeland Security of 
                                        such fact through the 
                                        verification system or 
                                        in such other manner as 
                                        the Secretary may 
                                        specify.
                                            (bb) Failure to 
                                        notify.--If the person 
                                        or entity fails to 
                                        provide notice with 
                                        respect to an 
                                        individual as required 
                                        under item (aa), the 
                                        failure is deemed to 
                                        constitute a violation 
                                        of subsection (a)(1)(A) 
                                        with respect to that 
                                        individual.
                                    (VI) Continued employment 
                                after final nonconfirmation.--
                                If the person or other entity 
                                continues to employ (or to 
                                recruit or refer) an individual 
                                after receiving final 
                                nonconfirmation, a rebuttable 
                                presumption is created that the 
                                person or entity has violated 
                                subsection (a)(1)(A).
                    (D) Effective dates of new procedures.--
                            (i) Hiring.--Except as provided in 
                        clause (iii), the provisions of this 
                        paragraph shall apply to a person or 
                        other entity hiring an individual for 
                        employment in the United States as 
                        follows:
                                    (I) With respect to 
                                employers having 10,000 or more 
                                employees in the United States 
                                on the date of the enactment of 
                                the Legal Workforce Act, on the 
                                date that is 6 months after the 
                                date of the enactment of such 
                                Act.
                                    (II) With respect to 
                                employers having 500 or more 
                                employees in the United States, 
                                but less than 10,000 employees 
                                in the United States, on the 
                                date of the enactment of the 
                                Legal Workforce Act, on the 
                                date that is 12 months after 
                                the date of the enactment of 
                                such Act.
                                    (III) With respect to 
                                employers having 20 or more 
                                employees in the United States, 
                                but less than 500 employees in 
                                the United States, on the date 
                                of the enactment of the Legal 
                                Workforce Act, on the date that 
                                is 18 months after the date of 
                                the enactment of such Act.
                                    (IV) With respect to 
                                employers having 1 or more 
                                employees in the United States, 
                                but less than 20 employees in 
                                the United States, on the date 
                                of the enactment of the Legal 
                                Workforce Act, on the date that 
                                is 24 months after the date of 
                                the enactment of such Act.
                            (ii) Recruiting and referring.--
                        Except as provided in clause (iii), the 
                        provisions of this paragraph shall 
                        apply to a person or other entity 
                        recruiting or referring an individual 
                        for employment in the United States on 
                        the date that is 12 months after the 
                        date of the enactment of the Legal 
                        Workforce Act.
                            (iii) Agricultural labor or 
                        services.--With respect to an employee 
                        performing agricultural labor or 
                        services, this paragraph shall not 
                        apply with respect to the verification 
                        of the employee until the date that is 
                        24 months after the date of the 
                        enactment of the Legal Workforce Act. 
                        For purposes of the preceding sentence, 
                        the term ``agricultural labor or 
                        services'' has the meaning given such 
                        term by the Secretary of Agriculture in 
                        regulations and includes agricultural 
                        labor as defined in section 3121(g) of 
                        the Internal Revenue Code of 1986, 
                        agriculture as defined in section 3(f) 
                        of the Fair Labor Standards Act of 1938 
                        (29 U.S.C. 203(f)), the handling, 
                        planting, drying, packing, packaging, 
                        processing, freezing, or grading prior 
                        to delivery for storage of any 
                        agricultural or horticultural commodity 
                        in its unmanufactured state, all 
                        activities required for the 
                        preparation, processing or 
                        manufacturing of a product of 
                        agriculture (as such term is defined in 
                        such section 3(f)) for further 
                        distribution, and activities similar to 
                        all the foregoing as they relate to 
                        fish or shellfish in aquaculture 
                        facilities. An employee described in 
                        this clause shall not be counted for 
                        purposes of clause (i).
                            (iv) Transition rule.--Subject to 
                        paragraph (4), the following shall 
                        apply to a person or other entity 
                        hiring, recruiting, or referring an 
                        individual for employment in the United 
                        States until the effective date or 
                        dates applicable under clauses (i) 
                        through (iii):
                                    (I) This subsection, as in 
                                effect before the enactment of 
                                the Legal Workforce Act.
                                    (II) Subtitle A of title IV 
                                of the Illegal Immigration 
                                Reform and Immigrant 
                                Responsibility Act of 1996 (8 
                                U.S.C. 1324a note), as in 
                                effect before the effective 
                                date in section 7(c) of the 
                                Legal Workforce Act.
                                    (III) Any other provision 
                                of Federal law requiring the 
                                person or entity to participate 
                                in the E-Verify Program 
                                described in section 403(a) of 
                                the Illegal Immigration Reform 
                                and Immigrant Responsibility 
                                Act of 1996 (8 U.S.C. 1324a 
                                note), as in effect before the 
                                effective date in section 7(c) 
                                of the Legal Workforce Act, 
                                including Executive Order 13465 
                                (8 U.S.C. 1324a note; relating 
                                to Government procurement).
                    (E) Verification period defined.--
                            (i) In general.--For purposes of 
                        this paragraph:
                                    (I) In the case of 
                                recruitment or referral, the 
                                term ``verification period'' 
                                means the period ending on the 
                                date recruiting or referring 
                                commences.
                                    (II) In the case of hiring, 
                                the term ``verification 
                                period'' means the period 
                                beginning on the date on which 
                                an offer of employment is 
                                extended and ending on the date 
                                that is 3 business days after 
                                the date of hire, except as 
                                provided in clause (iii). The 
                                offer of employment may be 
                                conditioned in accordance with 
                                clause (ii).
                            (ii) Job offer may be 
                        conditional.--A person or other entity 
                        may offer a prospective employee an 
                        employment position that is conditioned 
                        on final verification of the identity 
                        and employment eligibility of the 
                        employee using the procedures 
                        established under this paragraph.
                            (iii) Special rule.--
                        Notwithstanding clause (i)(II), in the 
                        case of an alien who is authorized for 
                        employment and who provides evidence 
                        from the Social Security Administration 
                        that the alien has applied for a social 
                        security account number, the 
                        verification period ends three business 
                        days after the alien receives the 
                        social security account number.
            (2) Reverification for individuals with limited 
        work authorization.--
                    (A) In general.--Except as provided in 
                subparagraph (B), a person or entity shall make 
                an inquiry, as provided in subsection (d), 
                using the verification system to seek 
                reverification of the identity and employment 
                eligibility of all individuals with a limited 
                period of work authorization employed by the 
                person or entity during the 3 business days 
                after the date on which the employee's work 
                authorization expires as follows:
                            (i) With respect to employers 
                        having 10,000 or more employees in the 
                        United States on the date of the 
                        enactment of the Legal Workforce Act, 
                        beginning on the date that is 6 months 
                        after the date of the enactment of such 
                        Act.
                            (ii) With respect to employers 
                        having 500 or more employees in the 
                        United States, but less than 10,000 
                        employees in the United States, on the 
                        date of the enactment of the Legal 
                        Workforce Act, beginning on the date 
                        that is 12 months after the date of the 
                        enactment of such Act.
                            (iii) With respect to employers 
                        having 20 or more employees in the 
                        United States, but less than 500 
                        employees in the United States, on the 
                        date of the enactment of the Legal 
                        Workforce Act, beginning on the date 
                        that is 18 months after the date of the 
                        enactment of such Act.
                            (iv) With respect to employers 
                        having 1 or more employees in the 
                        United States, but less than 20 
                        employees in the United States, on the 
                        date of the enactment of the Legal 
                        Workforce Act, beginning on the date 
                        that is 24 months after the date of the 
                        enactment of such Act.
                    (B) Agricultural labor or services.--With 
                respect to an employee performing agricultural 
                labor or services, or an employee recruited or 
                referred by a farm labor contractor (as defined 
                in section 3 of the Migrant and Seasonal 
                Agricultural Worker Protection Act (29 U.S.C. 
                1801)), subparagraph (A) shall not apply with 
                respect to the reverification of the employee 
                until the date that is 24 months after the date 
                of the enactment of the Legal Workforce Act. 
                For purposes of the preceding sentence, the 
                term ``agricultural labor or services'' has the 
                meaning given such term by the Secretary of 
                Agriculture in regulations and includes 
                agricultural labor as defined in section 
                3121(g) of the Internal Revenue Code of 1986, 
                agriculture as defined in section 3(f) of the 
                Fair Labor Standards Act of 1938 (29 U.S.C. 
                203(f)), the handling, planting, drying, 
                packing, packaging, processing, freezing, or 
                grading prior to delivery for storage of any 
                agricultural or horticultural commodity in its 
                unmanufactured state, all activities required 
                for the preparation, processing, or 
                manufacturing of a product of agriculture (as 
                such term is defined in such section 3(f)) for 
                further distribution, and activities similar to 
                all the foregoing as they relate to fish or 
                shellfish in aquaculture facilities. An 
                employee described in this subparagraph shall 
                not be counted for purposes of subparagraph 
                (A).
                    (C) Reverification.--Paragraph (1)(C)(ii) 
                shall apply to reverifications pursuant to this 
                paragraph on the same basis as it applies to 
                verifications pursuant to paragraph (1), except 
                that employers shall--
                            (i) use a form designated or 
                        established by the Secretary by 
                        regulation for purposes of this 
                        paragraph; and
                            (ii) retain a paper, microfiche, 
                        microfilm, or electronic version of the 
                        form and make it available for 
                        inspection by officers of the 
                        Department of Homeland Security, the 
                        Special Counsel for Immigration-Related 
                        Unfair Employment Practices, or the 
                        Department of Labor during the period 
                        beginning on the date the 
                        reverification commences and ending on 
                        the date that is the later of 3 years 
                        after the date of such reverification 
                        or 1 year after the date the 
                        individual's employment is terminated.
            (3) Previously hired individuals.--
                    (A) On a mandatory basis for certain 
                employees.--
                            (i) In general.--Not later than the 
                        date that is 6 months after the date of 
                        the enactment of the Legal Workforce 
                        Act, an employer shall make an inquiry, 
                        as provided in subsection (d), using 
                        the verification system to seek 
                        verification of the identity and 
                        employment eligibility of any 
                        individual described in clause (ii) 
                        employed by the employer whose 
                        employment eligibility has not been 
                        verified under the E-Verify Program 
                        described in section 403(a) of the 
                        Illegal Immigration Reform and 
                        Immigrant Responsibility Act of 1996 (8 
                        U.S.C. 1324a note).
                            (ii) Individuals described.--An 
                        individual described in this clause is 
                        any of the following:
                                    (I) An employee of any unit 
                                of a Federal, State, or local 
                                government.
                                    (II) An employee who 
                                requires a Federal security 
                                clearance working in a Federal, 
                                State or local government 
                                building, a military base, a 
                                nuclear energy site, a weapons 
                                site, or an airport or other 
                                facility that requires workers 
                                to carry a Transportation 
                                Worker Identification 
                                Credential (TWIC).
                                    (III) An employee assigned 
                                to perform work in the United 
                                States under a Federal 
                                contract, except that this 
                                subclause--
                                            (aa) is not 
                                        applicable to 
                                        individuals who have a 
                                        clearance under 
                                        Homeland Security 
                                        Presidential Directive 
                                        12 (HSPD 12 clearance), 
                                        are administrative or 
                                        overhead personnel, or 
                                        are working solely on 
                                        contracts that provide 
                                        Commercial Off The 
                                        Shelf goods or services 
                                        as set forth by the 
                                        Federal Acquisition 
                                        Regulatory Council, 
                                        unless they are subject 
                                        to verification under 
                                        subclause (II); and
                                            (bb) only applies 
                                        to contracts over the 
                                        simple acquisition 
                                        threshold as defined in 
                                        section 2.101 of title 
                                        48, Code of Federal 
                                        Regulations.
                    (B) On a mandatory basis for multiple users 
                of same social security account number.--In the 
                case of an employer who is required by this 
                subsection to use the verification system 
                described in subsection (d), or has elected 
                voluntarily to use such system, the employer 
                shall make inquiries to the system in 
                accordance with the following:
                            (i) The Commissioner of Social 
                        Security shall notify annually 
                        employees (at the employee address 
                        listed on the Wage and Tax Statement) 
                        who submit a social security account 
                        number to which more than one employer 
                        reports income and for which there is a 
                        pattern of unusual multiple use. The 
                        notification letter shall identify the 
                        number of employers to which income is 
                        being reported as well as sufficient 
                        information notifying the employee of 
                        the process to contact the Social 
                        Security Administration Fraud Hotline 
                        if the employee believes the employee's 
                        identity may have been stolen. The 
                        notice shall not share information 
                        protected as private, in order to avoid 
                        any recipient of the notice from being 
                        in the position to further commit or 
                        begin committing identity theft.
                            (ii) If the person to whom the 
                        social security account number was 
                        issued by the Social Security 
                        Administration has been identified and 
                        confirmed by the Commissioner, and 
                        indicates that the social security 
                        account number was used without their 
                        knowledge, the Secretary and the 
                        Commissioner shall lock the social 
                        security account number for employment 
                        eligibility verification purposes and 
                        shall notify the employers of the 
                        individuals who wrongfully submitted 
                        the social security account number that 
                        the employee may not be work eligible.
                            (iii) Each employer receiving such 
                        notification of an incorrect social 
                        security account number under clause 
                        (ii) shall use the verification system 
                        described in subsection (d) to check 
                        the work eligibility status of the 
                        applicable employee within 10 business 
                        days of receipt of the notification.
                    (C) On a voluntary basis.--Subject to 
                paragraph (2), and subparagraphs (A) through 
                (C) of this paragraph, beginning on the date 
                that is 30 days after the date of the enactment 
                of the Legal Workforce Act, an employer may 
                make an inquiry, as provided in subsection (d), 
                using the verification system to seek 
                verification of the identity and employment 
                eligibility of any individual employed by the 
                employer. If an employer chooses voluntarily to 
                seek verification of any individual employed by 
                the employer, the employer shall seek 
                verification of all individuals employed at the 
                same geographic location or, at the option of 
                the employer, all individuals employed within 
                the same job category, as the employee with 
                respect to whom the employer seeks voluntarily 
                to use the verification system. An employer's 
                decision about whether or not voluntarily to 
                seek verification of its current workforce 
                under this subparagraph may not be considered 
                by any government agency in any proceeding, 
                investigation, or review provided for in this 
                Act.
                    (D) Verification.--Paragraph (1)(C)(ii) 
                shall apply to verifications pursuant to this 
                paragraph on the same basis as it applies to 
                verifications pursuant to paragraph (1), except 
                that employers shall--
                            (i) use a form designated or 
                        established by the Secretary by 
                        regulation for purposes of this 
                        paragraph; and
                            (ii) retain a paper, microfiche, 
                        microfilm, or electronic version of the 
                        form and make it available for 
                        inspection by officers of the 
                        Department of Homeland Security, the 
                        Special Counsel for Immigration-Related 
                        Unfair Employment Practices, or the 
                        Department of Labor during the period 
                        beginning on the date the verification 
                        commences and ending on the date that 
                        is the later of 3 years after the date 
                        of such verification or 1 year after 
                        the date the individual's employment is 
                        terminated.
            (4) Early compliance.--
                    (A) Former E-Verify required users, 
                including federal contractors.--Notwithstanding 
                the deadlines in paragraphs (1) and (2), 
                beginning on the date of the enactment of the 
                Legal Workforce Act, the Secretary is 
                authorized to commence requiring employers 
                required to participate in the E-Verify Program 
                described in section 403(a) of the Illegal 
                Immigration Reform and Immigrant Responsibility 
                Act of 1996 (8 U.S.C. 1324a note), including 
                employers required to participate in such 
                program by reason of Federal acquisition laws 
                (and regulations promulgated under those laws, 
                including the Federal Acquisition Regulation), 
                to commence compliance with the requirements of 
                this subsection (and any additional 
                requirements of such Federal acquisition laws 
                and regulation) in lieu of any requirement to 
                participate in the E-Verify Program.
                    (B) Former e-verify voluntary users and 
                others desiring early compliance.--
                Notwithstanding the deadlines in paragraphs (1) 
                and (2), beginning on the date of the enactment 
                of the Legal Workforce Act, the Secretary shall 
                provide for the voluntary compliance with the 
                requirements of this subsection by employers 
                voluntarily electing to participate in the E-
                Verify Program described in section 403(a) of 
                the Illegal Immigration Reform and Immigrant 
                Responsibility Act of 1996 (8 U.S.C. 1324a 
                note) before such date, as well as by other 
                employers seeking voluntary early compliance.
            (5) Copying of documentation permitted.--
        Notwithstanding any other provision of law, the person 
        or entity may copy a document presented by an 
        individual pursuant to this subsection and may retain 
        the copy, but only (except as otherwise permitted under 
        law) for the purpose of complying with the requirements 
        of this subsection.
            (6) Limitation on use of forms.--A form designated 
        or established by the Secretary of Homeland Security 
        under this subsection and any information contained in 
        or appended to such form, may not be used for purposes 
        other than for enforcement of this Act and any other 
        provision of Federal criminal law.
            (7) Good faith compliance.--
                    (A) In general.--Except as otherwise 
                provided in this subsection, a person or entity 
                is considered to have complied with a 
                requirement of this subsection notwithstanding 
                a technical or procedural failure to meet such 
                requirement if there was a good faith attempt 
                to comply with the requirement.
                    (B) Exception if failure to correct after 
                notice.--Subparagraph (A) shall not apply if--
                            (i) the failure is not de minimus;
                            (ii) the Secretary of Homeland 
                        Security has explained to the person or 
                        entity the basis for the failure and 
                        why it is not de minimus;
                            (iii) the person or entity has been 
                        provided a period of not less than 30 
                        calendar days (beginning after the date 
                        of the explanation) within which to 
                        correct the failure; and
                            (iv) the person or entity has not 
                        corrected the failure voluntarily 
                        within such period.
                    (C) Exception for pattern or practice 
                violators.--Subparagraph (A) shall not apply to 
                a person or entity that has or is engaging in a 
                pattern or practice of violations of subsection 
                (a)(1)(A) or (a)(2).
            (8) Single extension of deadlines upon 
        certification.--In a case in which the Secretary of 
        Homeland Security has certified to the Congress that 
        the employment eligibility verification system required 
        under subsection (d) will not be fully operational by 
        the date that is 6 months after the date of the 
        enactment of the Legal Workforce Act, each deadline 
        established under this section for an employer to make 
        an inquiry using such system shall be extended by 6 
        months. No other extension of such a deadline shall be 
        made.

           *       *       *       *       *       *       *

    [(d) Evaluation and Changes in Employment Verification 
System.--
            [(1) Presidential monitoring and improvements in 
        system.--
                    [(A) Monitoring.--The President shall 
                provide for the monitoring and evaluation of 
                the degree to which the employment verification 
                system established under subsection (b) 
                provides a secure system to determine 
                employment eligibility in the United States and 
                shall examine the suitability of existing 
                Federal and State identification systems for 
                use for this purpose.
                    [(B) Improvements to establish secure 
                system.--To the extent that the system 
                established under subsection (b) is found not 
                to be a secure system to determine employment 
                eligibility in the United States, the President 
                shall, subject to paragraph (3) and taking into 
                account the results of any demonstration 
                projects conducted under paragraph (4), 
                implement such changes in (including additions 
                to) the requirements of subsection (b) as may 
                be necessary to establish a secure system to 
                determine employment eligibility in the United 
                States. Such changes in the system may be 
                implemented only if the changes conform to the 
                requirements of paragraph (2).
            [(2) Restrictions on changes in system.--Any change 
        the President proposes to implement under paragraph (1) 
        in the verification system must be designed in a manner 
        so the verification system, as so changed, meets the 
        following requirements:
                    [(A) Reliable determination of identity.--
                The system must be capable of reliably 
                determining whether--
                            [(i) a person with the identity 
                        claimed by an employee or prospective 
                        employee is eligible to work, and
                            [(ii) the employee or prospective 
                        employee is claiming the identity of 
                        another individual.
                    [(B) Using of counterfeit-resistant 
                documents.--If the system requires that a 
                document be presented to or examined by an 
                employer, the document must be in a form which 
                is resistant to counterfeiting and tampering.
                    [(C) Limited use of system.--Any personal 
                information utilized by the system may not be 
                made available to Government agencies, 
                employers, and other persons except to the 
                extent necessary to verify that an individual 
                is not an unauthorized alien.
                    [(D) Privacy of information.--The system 
                must protect the privacy and security of 
                personal information and identifiers utilized 
                in the system.
                    [(E) Limited denial of verification.--A 
                verification that an employee or prospective 
                employee is eligible to be employed in the 
                United States may not be withheld or revoked 
                under the system for any reason other than that 
                the employee or prospective employee is an 
                unauthorized alien.
                    [(F) Limited use for law enforcement 
                purposes.--The system may not be used for law 
                enforcement purposes, other than for 
                enforcement of this Act or sections 1001, 1028, 
                1546, and 1621 of title 18, United States Code.
                    [(G) Restriction on use of new documents.--
                If the system requires individuals to present a 
                new card or other document (designed 
                specifically for use for this purpose) at the 
                time of hiring, recruitment, or referral, then 
                such document may not be required to be 
                presented for any purpose other than under this 
                Act (or enforcement of sections 1001, 1028, 
                1546, and 1621 of title 18, United States Code) 
                nor to be carried on one's person.
            [(3) Notice to congress before implementing 
        changes.--
                    [(A) In general.--The President may not 
                implement any change under paragraph (1) unless 
                at least--
                            [(i) 60 days,
                            [(ii) one year, in the case of a 
                        major change described in subparagraph 
                        (D)(iii), or
                            [(iii) two years, in the case of a 
                        major change described in clause (i) or 
                        (ii) of subparagraph (D),
                before the date of implementation of the 
                change, the President has prepared and 
                transmitted to the Committee on the Judiciary 
                of the House of Representatives and to the 
                Committee on the Judiciary of the Senate a 
                written report setting forth the proposed 
                change. If the President proposes to make any 
                change regarding social security account number 
                cards, the President shall transmit to the 
                Committee on Ways and Means of the House of 
                Representatives and to the Committee on Finance 
                of the Senate a written report setting forth 
                the proposed change. The President promptly 
                shall cause to have printed in the Federal 
                Register the substance of any major change 
                (described in subparagraph (D)) proposed and 
                reported to Congress.
                    [(B) Contents of report.--In any report 
                under subparagraph (A) the President shall 
                include recommendations for the establishment 
                of civil and criminal sanctions for 
                unauthorized use or disclosure of the 
                information or identifiers contained in such 
                system.
                    [(C) Congressional review of major 
                changes.--
                            [(i) Hearings and review.--The 
                        Committees on the Judiciary of the 
                        House of Representatives and of the 
                        Senate shall cause to have printed in 
                        the Congressional Record the substance 
                        of any major change described in 
                        subparagraph (D), shall hold hearings 
                        respecting the feasibility and 
                        desirability of implementing such a 
                        change, and, within the two year period 
                        before implementation, shall report to 
                        their respective Houses findings on 
                        whether or not such a change should be 
                        implemented.
                            [(ii) Congressional action.--No 
                        major change may be implemented unless 
                        the Congress specifically provides, in 
                        an appropriations or other Act, for 
                        funds for implementation of the change.
                    [(D) Major changes defined.--As used in 
                this paragraph, the term ``major change'' means 
                a change which would--
                            [(i) require an individual to 
                        present a new card or other document 
                        (designed specifically for use for this 
                        purpose) at the time of hiring, 
                        recruitment, or referral,
                            [(ii) provide for a telephone 
                        verification system under which an 
                        employer, recruiter, or referrer must 
                        transmit to a Federal official 
                        information concerning the immigration 
                        status of prospective employees and the 
                        official transmits to the person, and 
                        the person must record, a verification 
                        code, or
                            [(iii) require any change in any 
                        card used for accounting purposes under 
                        the Social Security Act, including any 
                        change requiring that the only social 
                        security account number cards which may 
                        be presented in order to comply with 
                        subsection (b)(1)(C)(i) are such cards 
                        as are in a counterfeit-resistant form 
                        consistent with the second sentence of 
                        section 205(c)(2)(D) of the Social 
                        Security Act.
                    [(E) General revenue funding of social 
                security card changes.--Any costs incurred in 
                developing and implementing any change 
                described in subparagraph (D)(iii) for purposes 
                of this subsection shall not be paid for out of 
                any trust fund established under the Social 
                Security Act.
            [(4) Demonstration projects.--
                    [(A) Authority.--The President may 
                undertake demonstration projects (consistent 
                with paragraph (2)) of different changes in the 
                requirements of subsection (b). No such project 
                may extend over a period of longer than five 
                years.
                    [(B) Reports on projects.--The President 
                shall report to the Congress on the results of 
                demonstration projects conducted under this 
                paragraph.]
    (d) Employment Eligibility Verification System.--
            (1) In general.--Patterned on the employment 
        eligibility confirmation system established under 
        section 404 of the Illegal Immigration Reform and 
        Immigrant Responsibility Act of 1996 (8 U.S.C. 1324a 
        note), the Secretary of Homeland Security shall 
        establish and administer a verification system through 
        which the Secretary (or a designee of the Secretary, 
        which may be a nongovernmental entity)--
                    (A) responds to inquiries made by persons 
                at any time through a toll-free telephone line 
                and other toll-free electronic media concerning 
                an individual's identity and whether the 
                individual is authorized to be employed; and
                    (B) maintains records of the inquiries that 
                were made, of verifications provided (or not 
                provided), and of the codes provided to 
                inquirers as evidence of their compliance with 
                their obligations under this section.
            (2) Initial response.--The verification system 
        shall provide confirmation or a tentative 
        nonconfirmation of an individual's identity and 
        employment eligibility within 3 working days of the 
        initial inquiry. If providing confirmation or tentative 
        nonconfirmation, the verification system shall provide 
        an appropriate code indicating such confirmation or 
        such nonconfirmation.
            (3) Secondary confirmation process in case of 
        tentative nonconfirmation.--In cases of tentative 
        nonconfirmation, the Secretary shall specify, in 
        consultation with the Commissioner of Social Security, 
        an available secondary verification process to confirm 
        the validity of information provided and to provide a 
        final confirmation or nonconfirmation not later than 10 
        working days after the date on which the notice of the 
        tentative nonconfirmation is received by the employee. 
        The Secretary, in consultation with the Commissioner, 
        may extend this deadline once on a case-by-case basis 
        for a period of 10 working days, and if the time is 
        extended, shall document such extension within the 
        verification system. The Secretary, in consultation 
        with the Commissioner, shall notify the employee and 
        employer of such extension. The Secretary, in 
        consultation with the Commissioner, shall create a 
        standard process of such extension and notification and 
        shall make a description of such process available to 
        the public. When final confirmation or nonconfirmation 
        is provided, the verification system shall provide an 
        appropriate code indicating such confirmation or 
        nonconfirmation.
            (4) Design and operation of system.--The 
        verification system shall be designed and operated--
                    (A) to maximize its reliability and ease of 
                use by persons and other entities consistent 
                with insulating and protecting the privacy and 
                security of the underlying information;
                    (B) to respond to all inquiries made by 
                such persons and entities on whether 
                individuals are authorized to be employed and 
                to register all times when such inquiries are 
                not received;
                    (C) with appropriate administrative, 
                technical, and physical safeguards to prevent 
                unauthorized disclosure of personal 
                information;
                    (D) to have reasonable safeguards against 
                the system's resulting in unlawful 
                discriminatory practices based on national 
                origin or citizenship status, including--
                            (i) the selective or unauthorized 
                        use of the system to verify 
                        eligibility; or
                            (ii) the exclusion of certain 
                        individuals from consideration for 
                        employment as a result of a perceived 
                        likelihood that additional verification 
                        will be required, beyond what is 
                        required for most job applicants;
                    (E) to maximize the prevention of identity 
                theft use in the system; and
                    (F) to limit the subjects of verification 
                to the following individuals:
                            (i) Individuals hired, referred, or 
                        recruited, in accordance with paragraph 
                        (1) or (4) of subsection (b).
                            (ii) Employees and prospective 
                        employees, in accordance with paragraph 
                        (1), (2), (3), or (4) of subsection 
                        (b).
                            (iii) Individuals seeking to 
                        confirm their own employment 
                        eligibility on a voluntary basis.
            (5) Responsibilities of commissioner of social 
        security.--As part of the verification system, the 
        Commissioner of Social Security, in consultation with 
        the Secretary of Homeland Security (and any designee of 
        the Secretary selected to establish and administer the 
        verification system), shall establish a reliable, 
        secure method, which, within the time periods specified 
        under paragraphs (2) and (3), compares the name and 
        social security account number provided in an inquiry 
        against such information maintained by the Commissioner 
        in order to validate (or not validate) the information 
        provided regarding an individual whose identity and 
        employment eligibility must be confirmed, the 
        correspondence of the name and number, and whether the 
        individual has presented a social security account 
        number that is not valid for employment. The 
        Commissioner shall not disclose or release social 
        security information (other than such confirmation or 
        nonconfirmation) under the verification system except 
        as provided for in this section or section 205(c)(2)(I) 
        of the Social Security Act.
            (6) Responsibilities of secretary of homeland 
        security.--As part of the verification system, the 
        Secretary of Homeland Security (in consultation with 
        any designee of the Secretary selected to establish and 
        administer the verification system), shall establish a 
        reliable, secure method, which, within the time periods 
        specified under paragraphs (2) and (3), compares the 
        name and alien identification or authorization number 
        (or any other information as determined relevant by the 
        Secretary) which are provided in an inquiry against 
        such information maintained or accessed by the 
        Secretary in order to validate (or not validate) the 
        information provided, the correspondence of the name 
        and number, whether the alien is authorized to be 
        employed in the United States, or to the extent that 
        the Secretary determines to be feasible and 
        appropriate, whether the records available to the 
        Secretary verify the identity or status of a national 
        of the United States.
            (7) Updating information.--The Commissioner of 
        Social Security and the Secretary of Homeland Security 
        shall update their information in a manner that 
        promotes the maximum accuracy and shall provide a 
        process for the prompt correction of erroneous 
        information, including instances in which it is brought 
        to their attention in the secondary verification 
        process described in paragraph (3).
            (8) Limitation on use of the verification system 
        and any related systems.--
                    (A) No national identification card.--
                Nothing in this section shall be construed to 
                authorize, directly or indirectly, the issuance 
                or use of national identification cards or the 
                establishment of a national identification 
                card.
                    (B) Critical infrastructure.--The Secretary 
                may authorize or direct any person or entity 
                responsible for granting access to, protecting, 
                securing, operating, administering, or 
                regulating part of the critical infrastructure 
                (as defined in section 1016(e) of the Critical 
                Infrastructure Protection Act of 2001 (42 
                U.S.C. 5195c(e))) to use the verification 
                system to the extent the Secretary determines 
                that such use will assist in the protection of 
                the critical infrastructure.
            (9) Remedies.--If an individual alleges that the 
        individual would not have been dismissed from a job but 
        for an error of the verification mechanism, the 
        individual may seek compensation only through the 
        mechanism of the Federal Tort Claims Act, and 
        injunctive relief to correct such error. No class 
        action may be brought under this paragraph.
    (e) Compliance.--
            (1) Complaints and investigations.--The [Attorney 
        General] Secretary of Homeland Security shall establish 
        procedures--
                    (A) * * *

           *       *       *       *       *       *       *

                    (C) for the investigation of such other 
                violations of subsection (a) or (g)(1) as the 
                [Attorney General] Secretary of Homeland 
                Security determines to be appropriate, and
                    (D) for the designation in the [Service] 
                Department of Homeland Security of a unit which 
                has, as its primary duty, the prosecution of 
                cases of violations of subsection (a) or (g)(1) 
                under this subsection.

           *       *       *       *       *       *       *

            (4) Cease and desist order with civil money penalty 
        for hiring, recruiting, and referral violations.--With 
        respect to a violation of subsection (a)(1)(A) or 
        (a)(2), the order under this subsection--
                    (A) shall require the person or entity to 
                cease and desist from such violations and to 
                pay a civil penalty in an amount, subject to 
                paragraph (10), of--
                            (i) [not less than $250 and not 
                        more than $2,000] not less than $2,500 
                        and not more than $5,000 for each 
                        unauthorized alien with respect to whom 
                        a violation of either such subsection 
                        occurred,
                            (ii) [not less than $2,000 and not 
                        more than $5,000] not less than $5,000 
                        and not more than $10,000 for each such 
                        alien in the case of a person or entity 
                        previously subject to one order under 
                        this paragraph, or
                            (iii) [not less than $3,000 and not 
                        more than $10,000] not less than 
                        $10,000 and not more than $25,000 for 
                        each such alien in the case of a person 
                        or entity previously subject to more 
                        than one order under this paragraph; 
                        and
                    [(B) may require the person or entity--
                            [(i) to comply with the 
                        requirements of subsection (b) (or 
                        subsection (d) if applicable) with 
                        respect to individuals hired (or 
                        recruited or referred for employment 
                        for a fee) during a period of up to 
                        three years, and
                            [(ii) to take such other remedial 
                        action as is appropriate.]
                    (B) may require the person or entity to 
                take such other remedial action as is 
                appropriate.
        In applying this subsection in the case of a person or 
        entity composed of distinct, physically separate 
        subdivisions each of which provides separately for the 
        hiring, recruiting, or referring for employment, 
        without reference to the practices of, and not under 
        the control of or common control with, another 
        subdivision, each such subdivision shall be considered 
        a separate person or entity.
            (5) Order for civil money penalty for [paperwork] 
        violations.--With respect to a violation of subsection 
        (a)(1)(B), the order under this subsection shall 
        require the person or entity to pay a civil penalty in 
        an amount, subject to paragraphs (10) through (12), of 
        not less than [$100] $1,000 and not more than [$1,000] 
        $25,000 for each individual with respect to whom such 
        violation occurred. In determining the amount of the 
        penalty, due consideration shall be given to the size 
        of the business of the employer being charged, the good 
        faith of the employer, the seriousness of the 
        violation, whether or not the individual was an 
        unauthorized alien, and the history of previous 
        violations. Failure by a person or entity to utilize 
        the employment eligibility verification system as 
        required by law, or providing information to the system 
        that the person or entity knows or reasonably believes 
        to be false, shall be treated as a violation of 
        subsection (a)(1)(A).

           *       *       *       *       *       *       *

            (10) Exemption from penalty for good faith 
        violation.--In the case of imposition of a civil 
        penalty under paragraph (4)(A) with respect to a 
        violation of subsection (a)(1)(A) or (a)(2) for hiring 
        or continuation of employment or recruitment or 
        referral by person or entity and in the case of 
        imposition of a civil penalty under paragraph (5) for a 
        violation of subsection (a)(1)(B) for hiring or 
        recruitment or referral by a person or entity, the 
        penalty otherwise imposed may be waived or reduced if 
        the violator establishes that the violator acted in 
        good faith.
            (11) Authority to debar employers for certain 
        violations.--
                    (A) In general.--If a person or entity is 
                determined by the Secretary of Homeland 
                Security to be a repeat violator of paragraph 
                (1)(A) or (2) of subsection (a), or is 
                convicted of a crime under this section, such 
                person or entity may be considered for 
                debarment from the receipt of Federal 
                contracts, grants, or cooperative agreements in 
                accordance with the debarment standards and 
                pursuant to the debarment procedures set forth 
                in the Federal Acquisition Regulation.
                    (B) Does not have contract, grant, 
                agreement.--If the Secretary of Homeland 
                Security or the Attorney General wishes to have 
                a person or entity considered for debarment in 
                accordance with this paragraph, and such an 
                person or entity does not hold a Federal 
                contract, grant or cooperative agreement, the 
                Secretary or Attorney General shall refer the 
                matter to the Administrator of General Services 
                to determine whether to list the person or 
                entity on the List of Parties Excluded from 
                Federal Procurement, and if so, for what 
                duration and under what scope.
                    (C) Has contract, grant, agreement.--If the 
                Secretary of Homeland Security or the Attorney 
                General wishes to have a person or entity 
                considered for debarment in accordance with 
                this paragraph, and such person or entity holds 
                a Federal contract, grant or cooperative 
                agreement, the Secretary or Attorney General 
                shall advise all agencies or departments 
                holding a contract, grant, or cooperative 
                agreement with the person or entity of the 
                Government's interest in having the person or 
                entity considered for debarment, and after 
                soliciting and considering the views of all 
                such agencies and departments, the Secretary or 
                Attorney General may refer the matter to any 
                appropriate lead agency to determine whether to 
                list the person or entity on the List of 
                Parties Excluded from Federal Procurement, and 
                if so, for what duration and under what scope.
                    (D) Review.--Any decision to debar a person 
                or entity in accordance with this paragraph 
                shall be reviewable pursuant to part 9.4 of the 
                Federal Acquisition Regulation.
            (12) Office for state and local government 
        complaints.--The Secretary of Homeland Security shall 
        establish an office--
                    (A) to which State and local government 
                agencies may submit information indicating 
                potential violations of subsection (a), (b), or 
                (g)(1) that were generated in the normal course 
                of law enforcement or the normal course of 
                other official activities in the State or 
                locality;
                    (B) that is required to indicate to the 
                complaining State or local agency within 5 
                business days of the filing of such a complaint 
                by identifying whether the Secretary will 
                further investigate the information provided;
                    (C) that is required to investigate those 
                complaints filed by State or local government 
                agencies that, on their face, have a 
                substantial probability of validity;
                    (D) that is required to notify the 
                complaining State or local agency of the 
                results of any such investigation conducted; 
                and
                    (E) that is required to report to the 
                Congress annually the number of complaints 
                received under this paragraph, the States and 
                localities that filed such complaints, and the 
                resolution of the complaints investigated by 
                the Secretary.
    (f) Criminal Penalties and Injunctions for Pattern or 
Practice Violations.--
            [(1) Criminal penalty.--Any person or entity which 
        engages in a pattern or practice of violations of 
        subsection (a)(1)(A) or (a)(2) shall be fined not more 
        than $3,000 for each unauthorized alien with respect to 
        whom such a violation occurs, imprisoned for not more 
        than six months for the entire pattern or practice, or 
        both, notwithstanding the provisions of any other 
        Federal law relating to fine levels.]
            (1) Criminal penalty.--Any person or entity which 
        engages in a pattern or practice of violations of 
        subsection (a)(1) or (2) shall be fined not more than 
        $5,000 for each unauthorized alien with respect to 
        which such a violation occurs, imprisoned for not more 
        than 18 months, or both, notwithstanding the provisions 
        of any other Federal law relating to fine levels.

           *       *       *       *       *       *       *

    (h) Miscellaneous Provisions.--
            (1) * * *
            [(2) Preemption.--The provisions of this section 
        preempt any State or local law imposing civil or 
        criminal sanctions (other than through licensing and 
        similar laws) upon those who employ, or recruit or 
        refer for a fee for employment, unauthorized aliens.]
            (2) Preemption.--
                    (A) Single, national policy.--The 
                provisions of this section preempt any State or 
                local law, ordinance, policy, or rule, 
                including any criminal or civil fine or penalty 
                structure, insofar as they may now or hereafter 
                relate to the hiring, continued employment, or 
                status verification for employment eligibility 
                purposes, of unauthorized aliens.
                    (B) State enforcement of federal law.--
                            (i) Business licensing.--A State, 
                        locality, municipality, or political 
                        subdivision may exercise its authority 
                        over business licensing and similar 
                        laws as a penalty for failure to use 
                        the verification system described in 
                        subsection (d) to verify employment 
                        eligibility when and as required under 
                        subsection (b).
                            (ii) General rules.--A State, at 
                        its own cost, may enforce the 
                        provisions of this section, but only 
                        insofar as such State follows the 
                        Federal regulations implementing this 
                        section, applies the Federal penalty 
                        structure set out in this section, and 
                        complies with all Federal rules and 
                        guidance concerning implementation of 
                        this section. Such State may collect 
                        any fines assessed under this section. 
                        An employer may not be subject to 
                        enforcement, including audit and 
                        investigation, by both a Federal agency 
                        and a State for the same violation 
                        under this section. Whichever entity, 
                        the Federal agency or the State, is 
                        first to initiate the enforcement 
                        action, has the right of first refusal 
                        to proceed with the enforcement action. 
                        The Secretary must provide copies of 
                        all guidance, training, and field 
                        instructions provided to Federal 
                        officials implementing the provisions 
                        of this section to each State.

           *       *       *       *       *       *       *

            (4) Definition of date of hire.--As used in this 
        section, the term ``date of hire'' means the date of 
        actual commencement of employment for wages or other 
        remuneration, unless otherwise specified.
            (5) Definition of recruit or refer.--As used in 
        this section, the term ``refer'' means the act of 
        sending or directing a person who is in the United 
        States or transmitting documentation or information to 
        another, directly or indirectly, with the intent of 
        obtaining employment in the United States for such 
        person. Only persons or entities referring for 
        remuneration (whether on a retainer or contingency 
        basis) are included in the definition, except that 
        union hiring halls that refer union members or nonunion 
        individuals who pay union membership dues are included 
        in the definition whether or not they receive 
        remuneration, as are labor service entities or labor 
        service agencies, whether public, private, for-profit, 
        or nonprofit, that refer, dispatch, or otherwise 
        facilitate the hiring of laborers for any period of 
        time by a third party. As used in this section, the 
        term ``recruit'' means the act of soliciting a person 
        who is in the United States, directly or indirectly, 
        and referring the person to another with the intent of 
        obtaining employment for that person. Only persons or 
        entities referring for remuneration (whether on a 
        retainer or contingency basis) are included in the 
        definition, except that union hiring halls that refer 
        union members or nonunion individuals who pay union 
        membership dues are included in this definition whether 
        or not they receive remuneration, as are labor service 
        entities or labor service agencies, whether public, 
        private, for-profit, or nonprofit that recruit, 
        dispatch, or otherwise facilitate the hiring of 
        laborers for any period of time by a third party.

           *       *       *       *       *       *       *

                              ----------                              


  ILLEGAL IMMIGRATION REFORM AND IMMIGRANT RESPONSIBILITY ACT OF 1996

DIVISION C--ILLEGAL IMMIGRATION REFORM AND IMMIGRANT RESPONSIBILITY ACT 
                                OF 1996

SEC. 1. SHORT TITLE OF DIVISION; AMENDMENTS TO IMMIGRATION AND 
                    NATIONALITY ACT; APPLICATION OF DEFINITIONS OF SUCH 
                    ACT; TABLE OF CONTENTS OF DIVISION; SEVERABILITY.

    (a) Short Title.--This division may be cited as the 
``Illegal Immigration Reform and Immigrant Responsibility Act 
of 1996''.

           *       *       *       *       *       *       *

    (d) Table of Contents of Division.--The table of contents 
of this division is as follows:

Sec. 1. Short title of division; amendments to Immigration and 
          Nationality Act; application of definitions of such Act; table 
          of contents of division; severability.
     * * * * * * *

        TITLE IV--ENFORCEMENT OF RESTRICTIONS AGAINST EMPLOYMENT

   [Subtitle A--Pilot Programs for Employment Eligibility Confirmation

[Sec. 401. Establishment of programs.
[Sec. 402. Voluntary election to participate in a pilot program.
[Sec. 403. Procedures for participants in pilot programs.
[Sec. 404. Employment eligibility confirmation system.
[Sec. 405. Reports.]

           *       *       *       *       *       *       *


        TITLE IV--ENFORCEMENT OF RESTRICTIONS AGAINST EMPLOYMENT

  [Subtitle A--Pilot Programs for Employment Eligibility Confirmation

[SEC. 401. ESTABLISHMENT OF PROGRAMS.

    [(a) In General.--The Secretary of Homeland Security shall 
conduct 3 pilot programs of employment eligibility confirmation 
under this subtitle.
    [(b) Implementation Deadline; Termination.--The Secretary 
of Homeland Security shall implement the pilot programs in a 
manner that permits persons and other entities to have 
elections under section 402 of this division made and in effect 
no later than 1 year after the date of the enactment of this 
Act. Unless the Congress otherwise provides, the Secretary of 
Homeland Security shall terminate a pilot program on September 
30, 2015.
    [(c) Scope of Operation of Pilot Programs.--The Secretary 
of Homeland Security shall provide for the operation--
            [(1) of the E-Verify Program (described in section 
        403(a) of this division) in, at a minimum, 5 of the 7 
        States with the highest estimated population of aliens 
        who are not lawfully present in the United States, and 
        the Secretary of Homeland Security shall expand the 
        operation of the program to all 50 States not later 
        than December 1, 2004;
            [(2) of the citizen attestation pilot program 
        (described in section 403(b) of this division) in at 
        least 5 States (or, if fewer, all of the States) that 
        meet the condition described in section 403(b)(2)(A) of 
        this division; and
            [(3) of the machine-readable-document pilot program 
        (described in section 403(c) of this division) in at 
        least 5 States (or, if fewer, all of the States) that 
        meet the condition described in section 403(c)(2) of 
        this division.
    [(d) References in Subtitle.--In this subtitle--
            [(1) Pilot program references.--The terms 
        ``program'' or ``pilot program'' refer to any of the 3 
        pilot programs provided for under this subtitle.
            [(2) Confirmation system.--The term ``confirmation 
        system'' means the confirmation system established 
        under section 404 of this division.
            [(3) References to section 274a.--Any reference in 
        this subtitle to section 274A (or a subdivision of such 
        section) is deemed a reference to such section (or 
        subdivision thereof) of the Immigration and Nationality 
        Act.
            [(4) I-9 or similar form.--The term ``I-9 or 
        similar form'' means the form used for purposes of 
        section 274A(b)(1)(A) or such other form as the 
        Secretary of Homeland Security determines to be 
        appropriate.
            [ (5) Limited application to recruiters and 
        referrers.--Any reference to recruitment or referral 
        (or a recruiter or referrer) in relation to employment 
        is deemed a reference only to such recruitment or 
        referral (or recruiter or referrer) that is subject to 
        section 274A(a)(1)(B)(ii).
            [(6) United states citizenship.--The term ``United 
        States citizenship'' includes United States 
        nationality.
            [(7) State.--The term ``State'' has the meaning 
        given such term in section 101(a)(36) of the 
        Immigration and Nationality Act.

[SEC. 402. VOLUNTARY ELECTION TO PARTICIPATE IN A PILOT PROGRAM.

    [(a) Voluntary Election.--Subject to subsection (c)(3)(B), 
any person or other entity that conducts any hiring (or 
recruitment or referral) in a State in which a pilot program is 
operating may elect to participate in that pilot program. 
Except as specifically provided in subsection (e), the 
Secretary of Homeland Security may not require any person or 
other entity to participate in a pilot program.
    [(b) Benefit of Rebuttable Presumption.--
            [(1) In general.--If a person or other entity is 
        participating in a pilot program and obtains 
        confirmation of identity and employment eligibility in 
        compliance with the terms and conditions of the program 
        with respect to the hiring (or recruitment or referral) 
        of an individual for employment in the United States, 
        the person or entity has established a rebuttable 
        presumption that the person or entity has not violated 
        section 274A(a)(1)(A) with respect to such hiring (or 
        such recruitment or referral).
            [(2) Construction.--Paragraph (1) shall not be 
        construed as preventing a person or other entity that 
        has an election in effect under subsection (a) from 
        establishing an affirmative defense under section 
        274A(a)(3) if the person or entity complies with the 
        requirements of section 274A(a)(1)(B) but fails to 
        obtain confirmation under paragraph (1).
    [(c) General Terms of Elections.--
            [(1) In general.--An election under subsection (a) 
        shall be in such form and manner, under such terms and 
        conditions, and shall take effect, as the Secretary of 
        Homeland Security shall specify. The Secretary of 
        Homeland Security may not impose any fee as a condition 
        of making an election or participating in a pilot 
        program.
            [(2) Scope of election.--
                    [(A) In general.--Subject to paragraph (3), 
                any electing person or other entity may provide 
                that the election under subsection (a) shall 
                apply (during the period in which the election 
                is in effect)--
                            [(i) to all its hiring (and all 
                        recruitment or referral) in the State 
                        (or States) in which the pilot program 
                        is operating, or
                            [(ii) to its hiring (or recruitment 
                        or referral) in one or more pilot 
                        program States or one or more places of 
                        hiring (or recruitment or referral, as 
                        the case may be) in the pilot program 
                        States.
                    [(B) Application of programs in non-pilot 
                program states.--In addition, the Secretary of 
                Homeland Security may permit a person or entity 
                electing the citizen attestation pilot program 
                (described in 403(b) of this division) or the 
                machine-readable-document pilot program 
                (described in section 403(c) of this division) 
                to provide that the election applies to its 
                hiring (or recruitment or referral) in one or 
                more States or places of hiring (or recruitment 
                or referral) in which the pilot program is not 
                otherwise operating but only if such States 
                meet the requirements of 403(b)(2)(A) and 
                403(c)(2) of this division, respectively.
            [(3) Termination of elections.--The Secretary of 
        Homeland Security may terminate an election by a person 
        or other entity under this section because the person 
        or entity has substantially failed to comply with its 
        obligations under the pilot program. A person or other 
        entity may terminate an election in such form and 
        manner as the Secretary of Homeland Security shall 
        specify.
    [(d) Consultation, Education, and Publicity.--
            [(1) Consultation.--The Secretary of Homeland 
        Security shall closely consult with representatives of 
        employers (and recruiters and referrers) in the 
        development and implementation of the pilot programs, 
        including the education of employers (and recruiters 
        and referrers) about such programs.
            [(2) Publicity.--The Secretary of Homeland Security 
        shall widely publicize the election process and pilot 
        programs, including the voluntary nature of the pilot 
        programs and the advantages to employers (and 
        recruiters and referrers) of making an election under 
        this section.
            [(3) Assistance through district offices.--The 
        Secretary of Homeland Security shall designate one or 
        more individuals in each District office of the 
        Immigration and Naturalization Service for a Service 
        District in which a pilot program is being 
        implemented--
                    [(A) to inform persons and other entities 
                that seek information about pilot programs of 
                the voluntary nature of such programs, and
                    [(B) to assist persons and other entities 
                in electing and participating in any pilot 
                programs in effect in the District, in 
                complying with the requirements of section 
                274A, and in facilitating confirmation of the 
                identity and employment eligibility of 
                individuals consistent with such section.
    [(e) Select Entities Required to Participate in a Pilot 
Program.--
            [(1) Federal government.--
                    [(A) Executive departments.--
                            [(i) In general.--Each Department 
                        of the Federal Government shall elect 
                        to participate in a pilot program and 
                        shall comply with the terms and 
                        conditions of such an election.
                            [(ii) Election.--Subject to clause 
                        (iii), the Secretary of each such 
                        Department--
                                    [(I) shall elect the pilot 
                                program (or programs) in which 
                                the Department shall 
                                participate, and
                                    [(II) may limit the 
                                election to hiring occurring in 
                                certain States (or geographic 
                                areas) covered by the program 
                                (or programs) and in specified 
                                divisions within the 
                                Department, so long as all 
                                hiring by such divisions and in 
                                such locations is covered.
                            [(iii) Role of attorney general.--
                        The Secretary of Homeland Security 
                        shall assist and coordinate elections 
                        under this subparagraph in such manner 
                        as assures that--
                                    [(I) a significant portion 
                                of the total hiring within each 
                                Department within States 
                                covered by a pilot program is 
                                covered under such a program, 
                                and
                                    [(II) there is significant 
                                participation by the Federal 
                                Executive branch in each of the 
                                pilot programs.
                    [(B) Legislative branch.--Each Member of 
                Congress, each officer of Congress, and the 
                head of each agency of the legislative branch, 
                that conducts hiring in a State in which a 
                pilot program is operating shall elect to 
                participate in a pilot program, may specify 
                which pilot program or programs (if there is 
                more than one) in which the Member, officer, or 
                agency will participate, and shall comply with 
                the terms and conditions of such an election.
            [(2) Application to certain violators.--An order 
        under section 274A(e)(4) or section 274B(g) of the 
        Immigration and Nationality Act may require the subject 
        of the order to participate in, and comply with the 
        terms of, a pilot program with respect to the subject's 
        hiring (or recruitment or referral) of individuals in a 
        State covered by such a program.
            [(3) Consequence of failure to participate.--If a 
        person or other entity is required under this 
        subsection to participate in a pilot program and fails 
        to comply with the requirements of such program with 
        respect to an individual--
                    [(A) such failure shall be treated as a 
                violation of section 274A(a)(1)(B) with respect 
                to that individual, and
                    [(B) a rebuttable presumption is created 
                that the person or entity has violated section 
                274A(a)(1)(A).
        Subparagraph (B) shall not apply in any prosecution 
        under section 274A(f)(1).
    [(f) Construction.--This subtitle shall not affect the 
authority of the Secretary of Homeland Security under any other 
law (including section 274A(d)(4)) to conduct demonstration 
projects in relation to section 274A.

[SEC. 403. PROCEDURES FOR PARTICIPANTS IN PILOT PROGRAMS.

    [(a) E-Verify Program.--A person or other entity that 
elects to participate in the E-Verify Program described in this 
subsection agrees to conform to the following procedures in the 
case of the hiring (or recruitment or referral) for employment 
in the United States of each individual covered by the 
election:
            [(1) Provision of additional information.--The 
        person or entity shall obtain from the individual (and 
        the individual shall provide) and shall record on the 
        I-9 or similar form--
                    [(A) the individual's social security 
                account number, if the individual has been 
                issued such a number, and
                    [(B) if the individual does not attest to 
                United States citizenship under section 
                274A(b)(2), such identification or 
                authorization number established by the 
                Immigration and Naturalization Service for the 
                alien as the Secretary of Homeland Security 
                shall specify,

        and shall retain the original form and make it 
        available for inspection for the period and in the 
        manner required of I-9 forms under section 274A(b)(3).
            [(2) Presentation of documentation.--
                    [(A) In general.--The person or other 
                entity, and the individual whose identity and 
                employment eligibility are being confirmed, 
                shall, subject to subparagraph (B), fulfill the 
                requirements of section 274A(b) with the 
                following modifications:
                            [(i) A document referred to in 
                        section 274A(b)(1)(B)(ii) (as 
                        redesignated by section 412(a) of this 
                        division) must be designated by the 
                        Secretary of Homeland Security as 
                        suitable for the purpose of 
                        identification in a pilot program.
                            [(ii) A document referred to in 
                        section 274A(b)(1)(D) must contain a 
                        photograph of the individual.
                            [(iii) The person or other entity 
                        has complied with the requirements of 
                        section 274A(b)(1) with respect to 
                        examination of a document if the 
                        document reasonably appears on its face 
                        to be genuine and it reasonably appears 
                        to pertain to the individual whose 
                        identity and work eligibility is being 
                        confirmed.
                    [(B) Limitation of requirement to examine 
                documentation.--If the Secretary of Homeland 
                Security finds that a pilot program would 
                reliably determine with respect to an 
                individual whether--
                            [(i) the person with the identity 
                        claimed by the individual is authorized 
                        to work in the United States, and
                            [(ii) the individual is claiming 
                        the identity of another person,

                if a person or entity could fulfill the 
                requirement to examine documentation contained 
                in subparagraph (A) of section 274A(b)(1) by 
                examining a document specified in either 
                subparagraph (B) or (D) of such section, the 
                Secretary of Homeland Security may provide 
                that, for purposes of such requirement, only 
                such a document need be examined. In such case, 
                any reference in section 274A(b)(1)(A) to a 
                verification that an individual is not an 
                unauthorized alien shall be deemed to be a 
                verification of the individual's identity.
            [(3) Seeking confirmation.--
                    [(A) In general.--The person or other 
                entity shall make an inquiry, as provided in 
                section 404(a)(1) of this division, using the 
                confirmation system to seek confirmation of the 
                identity and employment eligibility of an 
                individual, by not later than the end of 3 
                working days (as specified by the Secretary of 
                Homeland Security) after the date of the hiring 
                (or recruitment or referral, as the case may 
                be).
                    [(B) Extension of time period.--If the 
                person or other entity in good faith attempts 
                to make an inquiry during such 3 working days 
                and the confirmation system has registered that 
                not all inquiries were received during such 
                time, the person or entity can make an inquiry 
                in the first subsequent working day in which 
                the confirmation system registers that it has 
                received all inquiries. If the confirmation 
                system cannot receive inquiries at all times 
                during a day, the person or entity merely has 
                to assert that the entity attempted to make the 
                inquiry on that day for the previous sentence 
                to apply to such an inquiry, and does not have 
                to provide any additional proof concerning such 
                inquiry.
            [(4) Confirmation or nonconfirmation.--
                    [(A) Confirmation upon initial inquiry.--If 
                the person or other entity receives an 
                appropriate confirmation of an individual's 
                identity and work eligibility under the 
                confirmation system within the time period 
                specified under section 404(b) of this 
                division, the person or entity shall record on 
                the I-9 or similar form an appropriate code 
                that is provided under the system and that 
                indicates a final confirmation of such identity 
                and work eligibility of the individual.
                    [(B) Nonconfirmation upon initial inquiry 
                and secondary verification.--
                            [(i) Nonconfirmation.--If the 
                        person or other entity receives a 
                        tentative nonconfirmation of an 
                        individual's identity or work 
                        eligibility under the confirmation 
                        system within the time period specified 
                        under 404(b) of this division, the 
                        person or entity shall so inform the 
                        individual for whom the confirmation is 
                        sought.
                            [(ii) No contest.--If the 
                        individual does not contest the 
                        nonconfirmation within the time period 
                        specified in section 404(c) of this 
                        division, the nonconfirmation shall be 
                        considered final. The person or entity 
                        shall then record on the I-9 or similar 
                        form an appropriate code which has been 
                        provided under the system to indicate a 
                        tentative nonconfirmation.
                            [(iii) Contest.--If the individual 
                        does contest the nonconfirmation, the 
                        individual shall utilize the process 
                        for secondary verification provided 
                        under section 404(c) of this division. 
                        The nonconfirmation will remain 
                        tentative until a final confirmation or 
                        nonconfirmation is provided by the 
                        confirmation system within the time 
                        period specified in such section. In no 
                        case shall an employer terminate 
                        employment of an individual because of 
                        a failure of the individual to have 
                        identity and work eligibility confirmed 
                        under this section until a 
                        nonconfirmation becomes final. Nothing 
                        in this clause shall apply to a 
                        termination of employment for any 
                        reason other than because of such a 
                        failure.
                            [(iv) Recording of conclusion on 
                        form.--If a final confirmation or 
                        nonconfirmation is provided by the 
                        confirmation system under section 
                        404(c) of this division regarding an 
                        individual, the person or entity shall 
                        record on the I-9 or similar form an 
                        appropriate code that is provided under 
                        the system and that indicates a 
                        confirmation or nonconfirmation of 
                        identity and work eligibility of the 
                        individual.
                    [(C) Consequences of nonconfirmation.--
                            [(i) Termination or notification of 
                        continued employment.--If the person or 
                        other entity has received a final 
                        nonconfirmation regarding an individual 
                        under subparagraph (B), the person or 
                        entity may terminate employment (or 
                        recruitment or referral) of the 
                        individual. If the person or entity 
                        does not terminate employment (or 
                        recruitment or referral) of the 
                        individual, the person or entity shall 
                        notify the Secretary of Homeland 
                        Security of such fact through the 
                        confirmation system or in such other 
                        manner as the Secretary of Homeland 
                        Security may specify.
                            [(ii) Failure to notify.--If the 
                        person or entity fails to provide 
                        notice with respect to an individual as 
                        required under clause (i), the failure 
                        is deemed to constitute a violation of 
                        section 274A(a)(1)(B) with respect to 
                        that individual and the applicable 
                        civil monetary penalty under section 
                        274A(e)(5) shall be (notwithstanding 
                        the amounts specified in such section) 
                        no less than $500 and no more than 
                        $1,000 for each individual with respect 
                        to whom such violation occurred.
                            [(iii) Continued employment after 
                        final nonconfirmation.--If the person 
                        or other entity continues to employ (or 
                        to recruit or refer) an individual 
                        after receiving final nonconfirmation, 
                        a rebuttable presumption is created 
                        that the person or entity has violated 
                        section 274A(a)(1)(A). The previous 
                        sentence shall not apply in any 
                        prosecution under section 274A(f)(1).
    [(b) Citizen Attestation Pilot Program.--
            [(1) In general.--Except as provided in paragraphs 
        (3) through (5), the procedures applicable under the 
        citizen attestation pilot program under this subsection 
        shall be the same procedures as those under the E-
        Verify Program under subsection (a).
            [(2) Restrictions.--
                    [(A) State document requirement to 
                participate in pilot program.--The Secretary of 
                Homeland Security may not provide for the 
                operation of the citizen attestation pilot 
                program in a State unless each driver's license 
                or similar identification document described in 
                section 274A(b)(1)(D)(i) issued by the State--
                            [(i) contains a photograph of the 
                        individual involved, and
                            [(ii) has been determined by the 
                        Secretary of Homeland Security to have 
                        security features, and to have been 
                        issued through application and issuance 
                        procedures, which make such document 
                        sufficiently resistant to 
                        counterfeiting, tampering, and 
                        fraudulent use that it is a reliable 
                        means of identification for purposes of 
                        this section.
                    [(B) Authorization to limit employer 
                participation.--The Secretary of Homeland 
                Security may restrict the number of persons or 
                other entities that may elect to participate in 
                the citizen attestation pilot program under 
                this subsection as the Secretary of Homeland 
                Security determines to be necessary to produce 
                a representative sample of employers and to 
                reduce the potential impact of fraud.
            [(3) No confirmation required for certain 
        individuals attesting to u.s. citizenship.--In the case 
        of a person or other entity hiring (or recruiting or 
        referring) an individual under the citizen attestation 
        pilot program, if the individual attests to United 
        States citizenship (under penalty of perjury on an I-9 
        or similar form which form states on its face the 
        criminal and other penalties provided under law for a 
        false representation of United States citizenship)--
                    [(A) the person or entity may fulfill the 
                requirement to examine documentation contained 
                in subparagraph (A) of section 274A(b)(1) by 
                examining a document specified in either 
                subparagraph (B)(i) or (D) of such section; and
                    [(B) the person or other entity is not 
                required to comply with respect to such 
                individual with the procedures described in 
                paragraphs (3) and (4) of subsection (a), but 
                only if the person or entity retains the form 
                and makes it available for inspection in the 
                same manner as in the case of an I-9 form under 
                section 274A(b)(3).
            [(4) Waiver of document presentation requirement in 
        certain cases.--
                    [(A) In general.--In the case of a person 
                or entity that elects, in a manner specified by 
                the Secretary of Homeland Security consistent 
                with subparagraph (B), to participate in the 
                pilot program under this paragraph, if an 
                individual being hired (or recruited or 
                referred) attests (in the manner described in 
                paragraph (3)) to United States citizenship and 
                the person or entity retains the form on which 
                the attestation is made and makes it available 
                for inspection in the same manner as in the 
                case of an I-9 form under section 274A(b)(3), 
                the person or entity is not required to comply 
                with the procedures described in section 
                274A(b).
                    [(B) Restriction.--The Secretary of 
                Homeland Security shall restrict the election 
                under this paragraph to no more than 1,000 
                employers and, to the extent practicable, shall 
                select among employers seeking to make such 
                election in a manner that provides for such an 
                election by a representative sample of 
                employers.
            [(5) Nonreviewable determinations.--The 
        determinations of the Secretary of Homeland Security 
        under paragraphs (2) and (4) are within the discretion 
        of the Secretary of Homeland Security and are not 
        subject to judicial or administrative review.
    [(c) Machine-Readable-Document Pilot Program.--
            [(1) In general.--Except as provided in paragraph 
        (3), the procedures applicable under the machine-
        readable-document pilot program under this subsection 
        shall be the same procedures as those under the E-
        Verify Program under subsection (a).
            [(2) State document requirement to participate in 
        pilot program.--The Secretary of Homeland Security may 
        not provide for the operation of the machine-readable-
        document pilot program in a State unless driver's 
        licenses and similar identification documents described 
        in section 274A(b)(1)(D)(i) issued by the State include 
        a machine-readable social security account number.
            [(3) Use of machine-readable documents.--If the 
        individual whose identity and employment eligibility 
        must be confirmed presents to the person or entity 
        hiring (or recruiting or referring) the individual a 
        license or other document described in paragraph (2) 
        that includes a machine-readable social security 
        account number, the person or entity must make an 
        inquiry through the confirmation system by using a 
        machine-readable feature of such document. If the 
        individual does not attest to United States citizenship 
        under section 274A(b)(2), the individual's 
        identification or authorization number described in 
        subsection (a)(1)(B) shall be provided as part of the 
        inquiry.
    [(d) Protection From Liability for Actions Taken on the 
Basis of Information Provided by the Confirmation System.--No 
person or entity participating in a pilot program shall be 
civilly or criminally liable under any law for any action taken 
in good faith reliance on information provided through the 
confirmation system.

[SEC. 404. EMPLOYMENT ELIGIBILITY CONFIRMATION SYSTEM.

    [(a) In General.--The Secretary of Homeland Security shall 
establish a pilot program confirmation system through which the 
Secretary of Homeland Security (or a designee of the Secretary 
of Homeland Security, which may be a nongovernmental entity)--
            [(1) responds to inquiries made by electing persons 
        and other entities (including those made by the 
        transmittal of data from machine-readable documents 
        under the machine-readable pilot program) at any time 
        through a toll-free telephone line or other toll-free 
        electronic media concerning an individual's identity 
        and whether the individual is authorized to be 
        employed, and
            [(2) maintains records of the inquiries that were 
        made, of confirmations provided (or not provided), and 
        of the codes provided to inquirers as evidence of their 
        compliance with their obligations under the pilot 
        programs.
To the extent practicable, the Secretary of Homeland Security 
shall seek to establish such a system using one or more 
nongovernmental entities.
    [(b) Initial Response.--The confirmation system shall 
provide confirmation or a tentative nonconfirmation of an 
individual's identity and employment eligibility within 3 
working days of the initial inquiry. If providing confirmation 
or tentative nonconfirmation, the confirmation system shall 
provide an appropriate code indicating such confirmation or 
such nonconfirmation.
    [(c) Secondary Verification Process in Case of Tentative 
Nonconfirmation.--In cases of tentative nonconfirmation, the 
Secretary of Homeland Security shall specify, in consultation 
with the Commissioner of Social Security and the Commissioner 
of the Immigration and Naturalization Service, an available 
secondary verification process to confirm the validity of 
information provided and to provide a final confirmation or 
nonconfirmation within 10 working days after the date of the 
tentative nonconfirmation. When final confirmation or 
nonconfirmation is provided, the confirmation system shall 
provide an appropriate code indicating such confirmation or 
nonconfirmation.
    [(d) Design and Operation of System.--The confirmation 
system shall be designed and operated--
            [(1) to maximize its reliability and ease of use by 
        persons and other entities making elections under 
        section 402(a) of this division consistent with 
        insulating and protecting the privacy and security of 
        the underlying information;
            [(2) to respond to all inquiries made by such 
        persons and entities on whether individuals are 
        authorized to be employed and to register all times 
        when such inquiries are not received;
            [(3) with appropriate administrative, technical, 
        and physical safeguards to prevent unauthorized 
        disclosure of personal information; and
            [(4) to have reasonable safeguards against the 
        system's resulting in unlawful discriminatory practices 
        based on national origin or citizenship status, 
        including--
                    [(A) the selective or unauthorized use of 
                the system to verify eligibility;
                    [(B) the use of the system prior to an 
                offer of employment; or
                    [(C) the exclusion of certain individuals 
                from consideration for employment as a result 
                of a perceived likelihood that additional 
                verification will be required, beyond what is 
                required for most job applicants.
    [(e) Responsibilities of the Commissioner of Social 
Security.--As part of the confirmation system, the Commissioner 
of Social Security, in consultation with the entity responsible 
for administration of the system, shall establish a reliable, 
secure method, which, within the time periods specified under 
subsections (b) and (c), compares the name and social security 
account number provided in an inquiry against such information 
maintained by the Commissioner in order to confirm (or not 
confirm) the validity of the information provided regarding an 
individual whose identity and employment eligibility must be 
confirmed, the correspondence of the name and number, and 
whether the individual has presented a social security account 
number that is not valid for employment. The Commissioner shall 
not disclose or release social security information (other than 
such confirmation or nonconfirmation).
    [(f) Responsibilities of the Commissioner of the 
Immigration and Naturalization Service.--As part of the 
confirmation system, the Commissioner of the Immigration and 
Naturalization Service, in consultation with the entity 
responsible for administration of the system, shall establish a 
reliable, secure method, which, within the time periods 
specified under subsections (b) and (c), compares the name and 
alien identification or authorization number described in 
section 403(a)(1)(B) of this division which are provided in an 
inquiry against such information maintained by the Commissioner 
in order to confirm (or not confirm) the validity of the 
information provided, the correspondence of the name and 
number, and whether the alien is authorized to be employed in 
the United States.
    [(g) Updating Information.--The Commissioners of Social 
Security and the Immigration and Naturalization Service shall 
update their information in a manner that promotes the maximum 
accuracy and shall provide a process for the prompt correction 
of erroneous information, including instances in which it is 
brought to their attention in the secondary verification 
process described in subsection (c).
    [(h) Limitation on Use of the Confirmation System and Any 
Related Systems.--
            [(1) In general.--Notwithstanding any other 
        provision of law, nothing in this subtitle shall be 
        construed to permit or allow any department, bureau, or 
        other agency of the United States Government to utilize 
        any information, data base, or other records assembled 
        under this subtitle for any other purpose other than as 
        provided for under this subtitle.
            [(2) No national identification card.--Nothing in 
        this subtitle shall be construed to authorize, directly 
        or indirectly, the issuance or use of national 
        identification cards or the establishment of a national 
        identification card.

[SEC. 405. REPORTS.

    [(a) In General.--The Secretary of Homeland Security shall 
submit to the Committees on the Judiciary of the House of 
Representatives and of the Senate reports on the pilot programs 
within 3 months after the end of the third and fourth years in 
which the programs are in effect. Such reports shall--
            [(1) assess the degree of fraudulent attesting of 
        United States citizenship,
            [(2) include recommendations on whether or not the 
        pilot programs should be continued or modified, and
            [(3) assess the benefits of the pilot programs to 
        employers and the degree to which they assist in the 
        enforcement of section 274A.
    [(b) Report on Expansion.--Not later than June 1, 2004, the 
Secretary of Homeland Security shall submit to the Committees 
on the Judiciary of the House of Representatives and the Senate 
a report--
            [(1) evaluating whether the problems identified by 
        the report submitted under subsection (a) have been 
        substantially resolved; and
            [(2) describing what actions the Secretary of 
        Homeland Security shall take before undertaking the 
        expansion of the E-Verify Program to all 50 States in 
        accordance with section 401(c)(1), in order to resolve 
        any outstanding problems raised in the report filed 
        under subsection (a).]

           *       *       *       *       *       *       *

                              ----------                              


                      TITLE 18, UNITED STATES CODE



           *       *       *       *       *       *       *
PART I--CRIMES

           *       *       *       *       *       *       *


CHAPTER 75--PASSPORTS AND VISAS

           *       *       *       *       *       *       *


Sec. 1546. Fraud and misuse of visas, permits, and other documents

    (a) * * *
    (b) Whoever uses--
            (1) an [identification document,] identification 
        document or document meant to establish work 
        authorization (including the documents described in 
        section 274A(b) of the Immigration and Nationality 
        Act), knowing (or having reason to know) that the 
        document was not issued lawfully for the use of the 
        possessor,
            (2) an [identification document] identification 
        document or document meant to establish work 
        authorization (including the documents described in 
        section 274A(b) of the Immigration and Nationality 
        Act), knowing (or having reason to know) that the 
        document is false, or

           *       *       *       *       *       *       *


                            Dissenting Views

    If H.R. 1772, the ``Legal Workforce Act,'' were to become 
law, every employer in the United States within 2 years from 
the date of enactment would be required to verify the 
employment authorization of new hires using E-Verify, the 
Department of Homeland Security's Electronic Employment 
Verification System. Employers also would be required to use E-
Verify to reverify the employment authorization of many 
existing employees. Although the expanded use of E-Verify is 
widely understood to be an important part of any top-to-bottom 
fix of our broken immigration system, in the absence of such 
reforms it would be devastating to our nation's economy. And 
because errors in the E-Verify process will prevent American 
citizens and employment-authorized noncitizens from getting or 
retaining jobs, it is critical that any mandatory expansion of 
the system contain procedural safeguards to protect against 
such harms.
    In the 112th Congress, the Judiciary Committee marked up 
H.R. 2885, a version of the Legal Workforce Act similar in 
nearly every respect to H.R. 1772. The Committee voted on a 
party-line basis to report H.R. 2885 to the Floor over strong 
opposition from a broad coalition of interests comprised of 
organized labor, agricultural associations and growers, small 
businesses, civil liberties groups, religious organizations, 
libertarians, privacy advocates, and supporters of immigration 
reform. Most, but not all, of these groups opposed the bill 
primarily because it was offered in the absence of broader 
reforms to fix our broken immigration system. Those groups 
recognized that every serious comprehensive immigration reform 
proposal since 2006 has mandated the use of E-Verify by all 
employers. S. 2611, the ``Comprehensive Immigration Reform Act 
of 2006,'' passed the Senate in May 2006 by vote of 62-36 with 
just such a requirement. The same is true of S. 744, the 
``Border Security, Economic Opportunity, and Immigration 
Modernization Act,'' which passed the Senate in June 2013 by a 
vote of 68-32. But those groups also recognized that mandating 
the use of E-Verify by all employers without reforming our 
immigration system more broadly would destroy entire industries 
and weaken our recovering economy.
    Ignoring the lessons from the 112th Congress, the Legal 
Workforce Act once again mandates the use of E-Verify without 
taking other necessary actions. H.R. 1772 has few due process 
protections for American workers who are wrongfully denied job 
opportunities or are terminated as a result of E-Verify errors. 
This legislation will also likely increase employment 
discrimination and worker abuse, because of the manner in which 
it permits E-Verify to be used and the lack of meaningful 
penalties for employers who abuse the system. Even further, 
because it is offered in the absence of broader reforms to our 
broken immigration reform, H.R. 1772 will result in billions of 
dollars in lost government revenue, harm American workers, and 
stifle economic growth. In fact, the Congressional Budget 
Office (CBO) and the Joint Committee on Taxation (JCT) have 
concluded that H.R. 1772 would result in a net revenue loss to 
the unified budget of $39 billion over 10 years and increase 
budget deficits over that period by about $30 billion.\1\ 
Contrast that with CBO and JCT's finding that S. 744 would 
reduce budget deficits by $158 billion over the first 10 years 
and by about $685 billion over the next 10 years.\2\ For these 
reasons, and those discussed below, the bill is opposed by a 
broad cross-section of organizations.\3\ We respectfully 
dissent and urge our colleagues to reject this proven job-
killing measure.
---------------------------------------------------------------------------
    \1\Congressional Budget Office, Cost Estimate, H.R. 1772 (Dec. 17, 
2013), available at http://www.cbo.gov/sites/default/files/cbofiles/
attachments/hr1772.pdf.
    \2\Letter from Douglas W. Elmendorf, Director, Congressional Budget 
Office, to Hon. Patrick J. Leahy, Chairman (July 3, 2013), available at 
http://www.cbo.gov/sites/default/files/cbofiles/attachments/
s744aspassed.pdf.
    \3\Letter from American Federation of State, County and Municipal 
Employees, American Friends Service Committee, American Civil Liberties 
Union, et al., to Hon. John Boehner, Speaker, and Nancy Pelosi, 
Minority Leader (Oct. 22, 2013) (on file with the H. Comm. on the 
Judiciary, Democratic Staff).
---------------------------------------------------------------------------

                       DESCRIPTION AND BACKGROUND

                          SUMMARY OF H.R. 1772

    H.R. 1772 requires all employers to use E-Verify on all new 
hires and greatly expands the category of existing employees 
who must be reverified under the system. E-Verify was created 
in 1996 under the Illegal Immigration Reform and Immigrant 
Responsibility Act (IIRIRA) as a voluntary electronic 
employment eligibility confirmation program called the Basic 
Pilot Program.\4\ The Basic Pilot Program, which was renamed 
``E-Verify'' in 2007 by the Department of Homeland Security 
(DHS), was intended to supplement the I-9 process created by 
Congress in 1986 under the Immigration Reform and Control Act 
(IRCA). IRCA, for the first time, made it illegal for employers 
to knowingly hire, recruit, or continue to employ undocumented 
workers. Prior to IRCA, employers were not prohibited from 
hiring undocumented workers and were not required to verify the 
immigration or citizenship status of the workers they hired.\5\
---------------------------------------------------------------------------
    \4\Illegal Immigration Reform and Immigrant Responsibility Act of 
1996 (enacted as Division C of Omnibus Consolidated Appropriations Act, 
1997, Pub. L. No. 104-208, 110 Stat. 3009).
    \5\Problems in the Current Employment Confirmation and Worksite 
Enforcement System: Hearing Before the Subcomm. on Immigration, 
Citizenship, Refugees, Border Security, and International Law of the H. 
Comm. on the Judiciary, 110th Cong. 45 (Apr. 24, 2007) (statement of 
Stephen Yale-Loehr, Adjunct Professor, Cornell Law School).
---------------------------------------------------------------------------
    Under current federal law, only a small percentage of 
employers are required to use E-Verify to check the employment 
eligibility of their new hires and an even smaller percentage 
are required to use the system to check existing employees.\6\ 
According to the National Conference of State Legislatures, 20 
states require at least some public and/or private employers to 
use E-Verify, as of November 30, 2012.\7\
---------------------------------------------------------------------------
    \6\In 2007, the Office of Management and Budget (OMB) instructed 
federal agencies to use E-Verify for all new hires. Since September 8, 
2009, a Federal Acquisition Regulation (FAR) final rule has required 
federal contractors and subcontractors--with certain exceptions--to use 
E-Verify for both new hires and existing employees working directly 
under the contract. See Federal Acquisition Regulation subpt. 22.18.
    \7\See National Conference of State Legislatures, E-Verify, http://
www.ncsl.org/research/
immigration/everify-faq.aspx (last visited Dec. 9, 2014).
---------------------------------------------------------------------------

                      SECTION-BY-SECTION ANALYSIS

Sec. 2. EMPLOYMENT ELIGIBILITY VERIFICATION PROCESS.
    Sec. 2(a)--Employment Eligibility Verification Process. 
Section 2(a) replaces section 274A(b) of the Immigration and 
Nationality Act (INA) with new provisions governing the 
verification of individuals for employment. The following 
describes INA Sec. 274A(b) as amended by the bill:
            LINA Sec. 274A(b)(1) New Hires, Recruitment, Referral
                LINA Sec. 274A(b)(1)(A): Attestation After Examination 
                    of Documentation
    Clause (i) requires that during the ``verification 
period,'' defined in the bill as the period between the date on 
which an offer of employment is extended and the date that is 
three days after the date of hire, the employer must sign and 
attest on a DHS form that the employer has verified that the 
individual is not unauthorized to work by:

         Lobtaining and recording the prospective 
        employee's social security number if he or she claims 
        to have one, or if the individual does not claim to be 
        a U.S. citizen, obtaining and recording the 
        identification number designated by DHS; and

         Lexamining the prescribed documents that 
        establish identity and employment authorization.

    Whereas employers are currently prohibited from using E-
Verify until after an employee's date of hire, this provision 
authorizes employers to pre-screen job applicants before such 
date.
    Clause (ii) identifies the documents that demonstrate both 
employment authorization and identity (List A on the Form I-9 
``List of Acceptable Documents'').
    Clause (iii) limits the documents that demonstrate 
employment authorization only (List C on the Form I-9 ``List of 
Acceptable Documents'') to an SSN card unless that card 
specifies on its face that it does not authorize employment in 
the United States. Under current law, other acceptable 
documents include, among other things, a Native American tribal 
document, Certification of Birth Abroad issued by the State 
Department (Form FS-545), and an original or certified copy of 
a birth certificate issued by a State, county, municipal 
authority, or territory of the United States bearing an 
official seal.
    Clause (iv) limits the documents that demonstrate identity 
only (List B on the Form I-9 ``List of Acceptable Documents'') 
by omitting various documents accepted under current law, 
including, but not limited to, a Federal, state, or local 
government-issued ID card, a school ID card bearing a 
photograph, and a voter's registration card.
    Clause (v) retains DHS authority to restrict the use of 
documents it finds unreliable.
    Clause (vi) permits employers to provide their attestation 
by hand-written or electronic signature.
                LINA Sec. 274A(b)(1)(B): Individual Attestation of 
                    Employment Authorization
    Requires that during the verification period the individual 
being verified attest by signature that he or she is a U.S. 
citizen or national, lawful permanent resident, or noncitizen 
authorized to work in the United States. The individual must 
provide information demonstrating identity and employment 
authorization as specified above, as well as his or her SSN, if 
he or she claims to have one.
                LINA Sec. 274A(b)(1)(C): Retention of Verification Form 
                    and Verification
    Clause (i) requires employers to verify identity and 
employment eligibility during the verification period and 
retain a copy of the verification form for a specified period 
of time and make it available for inspection.
    Clause (ii) provides information about initial responses 
from the verification system.

        Confirmation: Subclause (I) requires employers who 
        receive confirmation of an individual's identity and 
        work authorization to record it on the verification 
        form.

        Tentative Nonconfirmation (TNC): Subclause (II) 
        requires employers to notify the individual in question 
        if the verification system returns a TNC. If the 
        individual does not contest the TNC within the 
        specified time period, the TNC is considered final. The 
        bill prescribes a process for individuals who contest 
        the TNC. Until nonconfirmation becomes final, the bill 
        prohibits employers from rescinding an offer of 
        employment or terminating an employee.

        Final Confirmation or Nonconfirmation: Subclause (III) 
        requires employers to record final confirmations and 
        nonconfirmations.

        Extension of Time: Subclause (IV) provides an extension 
        of one working day if an employer makes a good faith 
        effort to make an inquiry but the verification system 
        registers that not all inquiries were received within 
        the required time frame.

        Consequences of Final Nonconfirmation (FNC): Subclause 
        (V) states that an employer who receives an FNC must 
        either terminate employment (or decline to recruit or 
        refer the individual) or notify DHS that the employer 
        will not do so. Failure to notify DHS is deemed a 
        violation of the existing prohibition on unlawful 
        employment of aliens at INA Sec. 274A(a)(1)(A).

        Continued Employment After FNC: Subclause (VI) creates 
        a rebuttable presumption that an employer who continues 
        to employ or recruit or refer a person after an FNC has 
        violated the existing prohibition on unlawful 
        employment of aliens at INA Sec. 274A(a)(1)(A).
                LINA Sec. 274A(b)(1)(D): Effective Dates of New 
                    Procedure
    Clause (i) establishes effective dates for the new 
verification system for new hires based upon the size and type 
of employer as follows:

         LEmployers with 10,000 or more employees: 6 
        months after enactment

         LEmployers with 500-9,999 employees: 12 months 
        after enactment

         LEmployers with 20-499 employees: 18 months 
        after enactment

         LEmployers with 1-19 employees: 24 months 
        after enactment

    Clause (ii) requires use of the new verification system 12 
months after enactment by companies or other entities that 
recruit or refer workers.
    Clause (iii) requires use of the new verification system 24 
months after enactment for employees performing agricultural 
labor or services or recruited or referred by a farm labor 
contractor.
    Clause (iv) states that until the verification system takes 
effect on the above effective dates for each employer or other 
entity, existing E-Verify requirements will remain in effect.

                LINA Sec. 274A(b)(1)(E): Verification Period Defined
    Clause (i) expands the period of time during which an 
employer may use E-Verify to include the period of time between 
the extension of an offer of employment and the actual date of 
hire.
    Clause (ii) authorizes employers to condition offers of 
employment on final confirmation.
    Clause (iii) provides for an extended verification period 
for persons who have applied to the Social Security 
Administration for an SSN.
            LINA Sec. 274A(b)(2) Reverification for Individuals with 
                    Limited Work Authorization
    Subparagraphs (A) and (B) require that existing employees 
with a limited period of work authorization be reverified 
during the three business days following the expiration of such 
authorization.
    Subparagraph (C) specifies that the reverification process 
is the same as for verification of new hires, recruits, or 
referrals, except that employers shall use a specific form 
designated by DHS regulations and retain electronic or paper 
copies for 3 years after reverification or 1 year after 
termination, whichever is later. Although the bill requires DHS 
to notify employers of the date on which limited work 
authorization expires, it provides employers neither a grace 
period, nor a reduced penalty, for a failure by DHS to issue 
this notice.
            LINA Sec. 274A(b)(3) Previously Hired Individuals
                LSubparagraph (A): On a Mandatory Basis for Certain 
                    Employees
    Provides that within 6 months of enactment, the following 
existing employees must have their employment authorization 
reverified if it has not already been verified through E-
Verify:

         Lany Federal, State and local government 
        employee;

         Lany employee who requires Federal security 
        clearance working in any government building, military 
        base, nuclear energy or weapons site, airport or other 
        site that requires Transportation Worker Identification 
        Credential; and

         Lany employee assigned to perform work in the 
        U.S. under federal or state contracts over $100,000, 
        with the exception of the following: (1) those who have 
        clearance under Homeland Security Presidential 
        Directive 12; (2) administrative or overhead personnel; 
        and (3) those working solely on contracts that provide 
        Commercial Off The Shelf goods or services as defined 
        in the FAR.
                LINA Sec. 274A(b)(3)(B): On a Mandatory Basis for 
                    Multiple Users of Same Social Security Account 
                    Number
    Clause (i) requires SSA to notify annually all employees 
who submit a SSN to which more than one employer reports income 
if there is a pattern of unusual multiple use. The notice shall 
provide sufficient information to allow such persons to contact 
the SSA Fraud Hotline if the person believes his or her 
identity has been stolen.
    Clause (ii) requires SSA to lock a SSN for employment 
eligibility purposes if a person confirms that the number was 
used without his or her knowledge. In such a case, SSA also 
must notify each employer of such a person that the person who 
submitted the SSN may not be work eligible.
    Clause (iii) requires employers receiving such notices to 
verify the employee within ten business days of receipt of the 
notice.
                INA Sec. 274A(b)(3)(C): On a Voluntary Basis
    Permits an employer to voluntarily reverify the employment 
eligibility of an existing employee so long as the employer 
reverifies all employees at that employee's geographic location 
or in that employee's job category. An employer's decision 
whether to voluntarily reverify shall not be considered by a 
government agency in any proceedings, investigation or review.
                INA Sec. 274A(b)(3)(D): Verification
    Specifies that the reverification process is the same as 
for verifications of new hires except that employers shall use 
a specific form designated by DHS regulations and retain 
electronic or paper copies for 3 years after reverification or 
1 year after termination, whichever is later.
            LINA Sec. 274A(b)(4) Early Compliance
                LINA Sec. 274A(b)(4)(A): Former E-Verify Required 
                    Users, Including Federal Contractors
    Authorizes DHS to require certain employers to comply with 
the verification system while complying with any additional 
requirements of the Federal Acquisition laws and regulations. 
During this time these employers would no longer be required to 
comply with the current E-Verify system. The specified 
employers are those that are required to participate in E-
Verify as described in IIRIRA Sec. 403(a) and employers who are 
required to participate in E-Verify under the Federal 
Acquisition laws and regulations.
                LINA Sec. 274A(b)(4)(B): Former E-Verify Voluntary 
                    Users and Others Desiring Early Compliance
    Requires DHS to permit employers who have voluntarily used 
E-Verify under the existing system to voluntarily comply early 
with the verification system established in the bill.
            LINA Sec. 274A(b)(5) Copying of Documentation Permitted
    Permits employers to copy documents presented by employees 
or prospective employees only for the purpose of complying with 
the verification system.
            LINA Sec. 274A(b)(6) Limitation on Use of Forms
    Provides that the forms DHS designates for use with the 
verification system may be used only for the purpose of 
enforcing the INA and any provision of Federal criminal law.
            LINA Sec. 274A(b)(7) Good Faith Compliance
    Provides a safe harbor for employers who made a good faith 
effort to comply with the law, but were unable to do so as a 
result of technical or procedural failures. The good faith 
defense does not apply if: (1) the failure to comply was not de 
minimus; (2) DHS explained the basis for the failure and how it 
was not a de minimus error; and (3) the employer did not 
correct the failure voluntarily within 30 days after being 
given an opportunity to do so. The good faith protection also 
does not apply to employers engaging in a pattern or practice 
of violating existing prohibitions against unlawful hiring or 
employment of authorized aliens.
            LINA Sec. 274A(b)(8) Single Extension of Deadlines Upon 
                    Certification
    Provides that if DHS certifies to Congress that the 
verification system will not be fully operational 6 months 
after enactment of the bill, each deadline for an employer to 
make an inquiry under the system shall be extended by 6 months. 
No other extensions may be made.
    Sec. 2(b)--Date of Hire. Section 2(b). Amends INA 
Sec. 274A(h) to define ``date of hire'' to mean the date of 
actual commencement of employment for wages.
Sec. 3. EMPLOYMENT ELIGIBILITY VERIFICATION SYSTEM.
    Section 3 replaces section 274A(d) of the INA with new 
provisions describing the system to be used to verify 
employment eligibility. The following describes INA 
Sec. 274A(d) as amended by the bill:
            LSection 274A(d) Employment Eligibility Verification System
    Paragraph (1) establishes a verification system 
``patterned'' on the existing E-Verify system that will respond 
to telephonic and other electronic inquiries at any time 
concerning an individual's identity and work authorization and 
maintain records of inquiries made and responses provided to 
employers.
    Paragraph (2) requires the verification system to respond 
to an inquiry with a confirmation or TNC within three working 
days of submission.
    Paragraph (3) states that where a TNC is issued, DHS and 
SSA shall specify a secondary verification process to provide 
final confirmation or nonconfirmation within ten working days 
of the date on which the notice of the TNC is received by the 
employee. The deadline may be extended on a case-by-case basis.
    Paragraph (4) states that the verification system is to be 
designed and operated to maximize reliability and ease of use, 
to respond to all inquiries, to prevent unauthorized 
disclosures of information, to protect against unlawful 
discrimination based on national origin or citizenship status, 
to maximize the prevention of identity theft use in the system, 
and to limit verification to persons being hired, referred or 
recruited, existing employees, potential employees, and persons 
who wish to confirm their own authorization to work.
    Paragraph (5) details program requirements for the 
Commissioner of Social Security.
    Paragraph (6) details program requirements for the 
Secretary of Homeland Security.
    Paragraph (7) requires the Commissioner of Social Security 
and Secretary of Homeland Security to update data in order to 
maximize accuracy and provide a process to correct erroneous 
information.
    Paragraph (8) states that nothing in this section shall be 
construed as creating a national identification card and 
permits DHS to authorize or direct employers working on 
critical infrastructure to use the verification system if it 
will help protect critical infrastructure.
    Paragraph (9) limits the remedies available to workers who 
are dismissed from a job due to a verification error to claims 
under the Federal Tort Claims Act and injunctive relief. Class 
actions also are prohibited.
Sec. 4. RECRUITMENT AND REFERRAL.
    Defines the terms ``recruit'' and ``refer'' for purposes of 
the verification requirements under the bill. Although each 
definition specifies that the term applies only to persons or 
entities that recruit or refer for remuneration, each 
definition contains an exception to the rule that requires 
union hiring halls and day labor centers that assist workers to 
find jobs to use the verification system even if they receive 
no remuneration for their services.
Sec. 5. GOOD FAITH DEFENSE.
    Amends INA Sec. 274A(a)(3) to provide employers a good 
faith defense when they take an employment-related action based 
on information provided by E-Verify. Absent a showing of clear 
and convincing evidence by DHS that the employer had knowledge 
that the employee is unauthorized to work, the employer would 
not be liable to a job applicant or the Federal, local, or 
state government under civil or criminal law. If the employer 
demonstrates by a preponderance of the evidence that the 
employer used a reasonable, secure, and established technology 
for identity authentication purposes of a new employee, that 
fact shall be considered when making a determination regarding 
an employer's good faith.
    An employer who fails to seek verification and continues to 
employ an individual may not use the good faith defense. If the 
verification system registers that not all inquiries were 
responded to within the required timeframe, the employer can 
submit another inquiry the next working day to preserve the 
good faith defense.
Sec. 6. PREEMPTION OF STATE AND LOCAL LAWS.
    Preempts any State or local law, ordinance, policy or rule, 
including any criminal or civil fine or penalty structure, as 
they relate to the hiring, continued employment, or status 
verification for employment eligibility of unauthorized aliens. 
Section 6 also authorizes State or political subdivisions to 
exercise their authority over business licensing and similar 
laws in order to impose a penalty for failure to use E-Verify. 
This is consistent with the Supreme Court's holding in Chamber 
of Commerce v. Whiting.\8\
---------------------------------------------------------------------------
    \8\Chamber of Commerce of the United States v. Whiting, 563 U.S. 
___ (U.S. May 26, 2011).
---------------------------------------------------------------------------
    This section contains a new provision permitting States, at 
their own expense, to enforce all of the civil and criminal 
provisions for unauthorized hiring in section 274A of the INA. 
The provision requires that in doing so, States must follow 
federal regulations, apply the federal penalty structure, and 
comply with all federal rules and guidelines. The section 
attempts to protect employers from overlapping audits, 
investigations, and other enforcement actions by giving the 
right of first refusal to whichever governmental entity first 
initiated the action.
Sec. 7. REPEAL.
    Repeals Subtitle A of title IV of the Illegal Immigration 
Reform and Immigrant Responsibility Act. Any reference to the 
E-Verify program is deemed to refer to the verification system 
established under the INA as amended in this Act. This section 
takes effect 3 years after the date of enactment.
Sec. 8. PENALTIES.
    Amends the penalties in INA Sec. 274A. As amended:
    INA Sec. 274A(e)(4) and (e)(5) contain substantially higher 
civil penalties for the unlawful hiring or employment of 
unauthorized persons. The new language also makes it a 
violation of the prohibition on the employment of unauthorized 
workers for an employer to fail to use the verification system 
or to enter information into the system that a person 
reasonably believes to be false.
    INA Sec. 274A(e)(10) authorizes DHS to waive or reduce such 
civil monetary penalties if the violator acted in good faith.
    INA Sec. 274A(e)(11) authorizes the Secretary of Homeland 
Security to debar repeat offenders of prohibitions against the 
unlawful employment of aliens or those convicted of a crime 
under section 274A of the INA from the receipt of Federal 
contracts, grants, or cooperative agreements under the Federal 
Acquisition Regulation. If an entity does not have a federal 
contract, the Secretary of Homeland Security or the Attorney 
General can refer the matter to GSA to determine whether the 
entity should be placed on the list of those excluded from 
federal procurement.
    INA Sec. 274A(e)(12) creates a new DHS Office for State and 
Local Government Complaints to which State and local 
governments can report suspected violations of the prohibitions 
on unauthorized hiring and employment. Such reports must be 
investigated by the office and State and local governments and 
Congress must be informed of the results of such 
investigations.
    INA Sec. 274A(f)(1) contains increased penalties for 
employers who engage in a pattern or practice of hiring 
unauthorized workers by raising the fine from $3,000 to $5,000 
and the maximum length of imprisonment from 6 months to 18 
months.
Sec. 9. FRAUD AND MISUSE OF DOCUMENTS.
    Amends 18 U.S.C. Sec. 1546(b) to make it a crime for a 
person to use in the verification system an identification 
document or any document meant to establish work authorization 
if the person knows or has reason to know that the document was 
not issued to the person or is false.
Sec. 10. PROTECTION OF SOCIAL SECURITY ADMINISTRATION PROGRAMS.
    Requires DHS and SSA to enter into an agreement providing 
SSA the funds it needs to establish, carry out, and maintain 
its duties and responsibilities under the INA as amended in 
this Act.
Sec. 11. FRAUD PREVENTION.
    Subsection (a) requires DHS and SSA to create a program 
that allows SSNs that have been identified as subject to 
unusual multiple use or suspected or determined to have been 
compromised by identity fraud, to be blocked from use in the 
verification system, unless the user of the SSN is able to show 
that the SSN is his or hers.
    Subsection (b) requires DHS and SSA to create a program to 
allow victims of identity fraud to suspend the use of their 
SSNs in the verification system. The Secretary of Homeland 
Security may make this a pilot program before making it 
available to all individuals.
    Subsection (c) requires DHS and SSA to create a program to 
allow parents or legal guardians to suspend or limit, for 
verification purposes, the use of an SSN or other identifying 
information belonging to a minor child under such person's 
care. This program also may be initiated as a pilot program.
Sec. 12. USE OF EMPLOYMENT ELIGIBILITY VERIFICATION PHOTO TOOL.
    Requires employers who match a photograph contained on a 
document presented by an employee to a photograph contained on 
a stored digital image of that document presented by the photo 
matching tool in the verification system to additionally match 
those photos to the face of the employee presenting the 
document for employment verification purposes.
Sec. 13. IDENTITY AUTHENTICATION EMPLOYMENT ELIGIBILITY VERIFICATION 
        PILOT PROGRAM.
    Requires the Secretary of Homeland Security, in 
consultation with the Commissioner of Social Security and the 
Director of the National Institute of Standards and Technology, 
to create two identity authentication pilot programs within 48 
months of enactment.
Sec. 14. SSA OFFICE OF INSPECTOR GENERAL AUDITS.
    Requires the SSA OIG to complete audits of: (1) workers who 
dispute wages reported on their social security account number 
when they believe someone else has used such number and name to 
report wages; (2) children's SSNs used for work purposes; and 
(3) employers whose workers present significant numbers of 
mismatched social security account numbers or names for wage 
reporting.

                        CONCERNS WITH H.R. 1772

 I. WITHOUT TOP-TO-BOTTOM REFORMS OF OUR IMMIGRATION SYSTEM, H.R. 1772 
             WILL DECIMATE AMERICA'S AGRICULTURAL INDUSTRY

A. LH.R. 1772 Will Decimate the U.S. Agricultural Industry
    Enacting the Legal Workforce Act without also reforming our 
broken immigration system will decimate American farms by 
drastically reducing the pool of available farm workers. The 
U.S. agricultural industry currently depends upon the work of 
undocumented immigrants, who make up more than 50 percent of 
the on-the-farm labor force. Losing those 1 to 1.25 million 
workers would be devastating, because there are nowhere near 
that many U.S. workers who are willing and able to fill these 
jobs. Comprehensive immigration reform would avoid this damage 
by providing current undocumented farmworkers with a path to 
earned permanent legal status and creating a fair and workable 
agricultural guestworker program to meet our future labor 
needs.
    According to the American Farm Bureau and dozens of major 
growers' associations who wrote to the Committee in the 112th 
Congress to oppose the Legal Workforce Act in the absence of 
broader reforms, ``[m]andatory E-Verify legislation for farmers 
threatens $5 to $9 billion in annual agricultural production. 
This is wealth--in fruits, vegetables, dairy, livestock and 
other commodities--that will leave U.S. soil, be grown outside 
our country, then shipped to the U.S. by our competitors and 
sold to American consumers''\9\ A separate Farm Bureau study 
found that mandatory E-Verify could lead to a decrease of 
between $1.5 and $3 billion per year in net farm income.\10\ 
Although the American Farm Bureau Federation has taken no 
position on H.R. 1772, the Farm Bureau is clear that ``[i]f the 
mandatory E-Verify program goes forward by itself, without 
providing producers a source of legal workers, it would present 
a potentially insurmountable challenge for many agricultural 
employers.''\11\
---------------------------------------------------------------------------
    \9\Letter from Agriculture Coalition for Immigration Reform, 
American Farm Bureau Federation, et al. to Hon. Lamar Smith, Chairman, 
(July 27, 2011) (emphasis in original) (on file with the H. Comm. on 
the Judiciary, Democratic Staff).
    \10\The Voice of Agriculture, E-Verify is E-normous Problem for 
Agriculture, American Farm Bureau Federation, June 20, 2011, available 
at http://www.fb.org/index.php?action=
newsroom.newsclip&id;=69608.
    \11\American Farm Bureau Federation, Agricultural Labor--E-Verify, 
Sept. 2013, available at http://www.fb.org/issues/docs/everify13.pdf.
---------------------------------------------------------------------------
    This is not mere speculation. In Georgia, within 2 months 
of enacting an enforcement-only immigration bill that requires 
all employers to use E-Verify,\12\ Georgia farmers found it 
impossible to recruit enough workers to harvest their crops. 
According to a state survey, farmers were unable to fill more 
than 11,000 farm jobs.\13\ In order to fill this shortage, 
Governor Nathan Deal sent probationers into the fields to pick 
fruits and vegetables.\14\ Unsurprisingly, that effort failed 
and the Georgia Agribusiness Council estimates that Georgia's 
farmers lost $300 million and could lose $1 billion.\15\ 
Predicting that farmers in the state might respond to the labor 
shortage by shifting from lucrative handpicked crops to 
mechanically harvested crops like peanuts and cotton, the 
Center for American Progress and the Immigration Policy Center 
estimated that the state would lose $800 million per year in 
farm gate value.\16\
---------------------------------------------------------------------------
    \12\H.B. 87, Gen. Assem., 2011 Sess. (Ga. 2011).
    \13\Jeremy Redmon, State Survey: 11,080 farm jobs unfilled, Atlanta 
J-Const., June 14, 2011, available at http://www.ajc.com/news/news/
local-govt-politics/state-survey-11080-farm-jobs-unfilled/nQwPH.
    \14\Id.
    \15\Reid J. Epstein, Georgia Immigrant Crackdown Backfires, 
Politico, June 22, 2011, available at http://www.politico.com/news/
stories/0611/57551.html.
    \16\Tom Baxter, How Georgia's Anti-Immigration Law Could Hurt the 
State's (and the Nation's) Economy, Center for American Progress and 
Immigration Policy Center, Oct. 4, 2011, http://
www.americanprogress.org/issues/2011/10/georgia_immigration.html.
---------------------------------------------------------------------------
    In Alabama, some farmers reported losing half of their 
workforce as a result of that state's decision to enact an 
anti-immigrant law mandating the use of E-Verify.\17\ 
Notwithstanding Georgia's failed experiment sending 
probationers into the fields, Alabama also turned to its prison 
work-release program to provide farmers with necessary 
labor.\18\ Some growers, like Jerry Spencer, chief executive of 
the Birmingham-based Grow Alabama, attempted to recruit 
unemployed Americans to fill the worker void created by 
Alabama's law.\19\ After two weeks, Spencer declared the effort 
a failure, because ``of more than 50 people he recruited for 
the work, only a few worked more than two or three days, and 
just one stuck with the job for the last two weeks.''\20\
---------------------------------------------------------------------------
    \17\M.J. Ellington, Immigration Law Already Hurting Farms, 
(Florence) TimesDaily, Aug. 8, 2011, available at http://
www.tuscaloosanews.com/article/20110808/NEWS/110809782.
    \18\Mary Sell, McMillan: Inmates short-term option for farmers 
desperate for help, Montgomery Advertiser, Oct. 7, 2011, available at 
http://www.montgomeryadvertiser.com/article/20111007/NEWS02/110070314
    \19\Jay Reeves, Efforts to Replace Immigrant Workers in Alabama 
Fields Coming Up Short, Associated Press, Oct. 17, 2011, available at 
http://blog.al.com/wire/2011/10/state_
program_to_replace_immig.html.
    \20\Id.
---------------------------------------------------------------------------
    Seasoned farmers know that the work currently performed by 
migrant workers cannot easily be replaced. Kay Hollabaugh of 
Hollabaugh Bros. Farm in Adams County, Pennsylvania, rejected 
the idea that the work could be performed just as well by 
probationers or a random cross-section of the unemployed. 
According to one article, ```The insinuation that just anybody 
can do this work is not true,' Hollabaugh said, and when a 
harvest hits, `we don't have time' for training.''\21\
---------------------------------------------------------------------------
    \21\Michael Matza, Farmers Say Stricter Immigration Screening Could 
Hurt Their Businesses, Phil. Inquirer, Oct. 10, 2011, available at 
http://articles.philly.com/2011-10-10/news/30263542_1_e-verify-legal-
workforce-act-illegal-immigration.
---------------------------------------------------------------------------
B. LThe Disintegration of the Agricultural Industry Will Lead To The 
        Elimination of Millions of American Jobs
    Destroying the U.S. agricultural industry will put millions 
of Americans out of work at a time when everyone in government 
should be focusing on putting Americans back to work. Although 
more than 50 percent of on-the-farm workers lack immigration 
status, this means that nearly half of the workers are U.S. 
citizens and non-citizens with employment authorization. 
Hundreds of thousands of these people will lose their jobs when 
farms begin to go under.
    Unfortunately, the massive job losses caused by enactment 
of the Legal Workforce Act in the absence of broader reforms 
will not be limited to on-the-farm jobs. According to U.S. 
Department of Agriculture studies, every on-the-farm job 
creates and supports about 3.1 ``upstream'' and ``downstream'' 
jobs.\22\ These are jobs typically held by American citizens in 
food processing, packaging, transportation, marketing, and 
retail sectors. Eliminating more than a million on-the-farm 
jobs through mandatory E-Verify will eliminate three times as 
many jobs for U.S. citizens in other sectors.
---------------------------------------------------------------------------
    \22\The Labor Needs of American Agriculture: Hearing Before the H. 
Comm. on Agriculture, 110th Cong. 16 (2007) (statement of James S. 
Holt, Ph.D., President and Principal, James S. Holt & Co., LLC).
---------------------------------------------------------------------------
    In order to prevent significant damage to the industry and 
to millions of upstream and downstream jobs, Representative 
Suzan DelBene (D-WA) offered an amendment to delay 
implementation of mandatory E-Verify in the agricultural 
industry until the Secretary of Homeland Security, in 
consultation with the Secretary of Agriculture, certifies that 
such implementation will not cause a significant shortage of 
persons available to perform necessary farmwork in the country. 
The amendment was defeated on a party-line vote of 8-19.\23\
---------------------------------------------------------------------------
    \23\Tr. of Markup of H.R. 1772, the Legal Workforce Act, by the H. 
Comm. on Judiciary, 113th Cong. 225 (2013) [hereinafter Markup Tr.]
---------------------------------------------------------------------------
C. LOff-Shoring Our Food Production Would Decrease Product Safety and 
        Increase U.S. Reliance on Foreign Imports
    Destroying our agricultural industry will also jeopardize 
America's long-term security, which depends on being able to 
produce a safe, stable, domestic food supply. Increasing our 
reliance on foreign imports necessarily decreases our ability 
to ensure adequate product safety. Moreover, the more we rely 
on imported food, the more we increase the chance of food-borne 
illnesses and terrorist attacks through our food supply. In 
Fiscal Year 2011, the Food and Drug Administration (FDA) was 
only able to physically examine ``about 243,000 food and feed 
import lines, or about 2 percent of the total number of food 
import lines imported during the year.''\24\ The Congressional 
Research Service (CRS) reports that ``[a]mong the cited reasons 
for this low incidence of inspections were limited and 
declining resources, including too few inspectors to cover the 
more than 360 U.S. ports of entry despite ever-increasing 
import volumes.''\25\ An increased reliance on imported food 
could increase our risk of food contamination, such as E. coli 
or Salmonella.
---------------------------------------------------------------------------
    \24\Renee Johnson, Food Safety Issues for the 113th Congress, 
Congressional Research Service, Jan. 9, 2013 (R42885), 17.
    \25\Id. n. 58.
---------------------------------------------------------------------------
    Our broken immigration system is one reason that growers 
have already begun to move their farms to Mexico where they can 
find sufficient workers to harvest their crops. According to 
Phil Glaize, Virginia apple grower and former U.S. Apple 
Association Chairman, farms have been leaving the United States 
for years as a result of the inability of farmers to find 
workers. In 2010, Glaize testified that:

        In the 1950's, colleagues tell me there was a thriving 
        greenhouse vegetable industry southwest of Toledo, 
        Ohio. It is gone, largely to Canada. Colleagues in the 
        West report that at least 80,000 acres of high-value 
        vegetable production has left southern Arizona and 
        California for Mexico. Florida tomatoes and citrus are 
        leaving for Mexico and Brazil. In 2008, Texas A&M; 
        University noted that 77% of Texas vegetable producers 
        surveyed had reduced the size or scope of their 
        business due to lack of employees. One quarter reported 
        moving some of their operations out of the U.S. Another 
        third were considering such a move.\26\
---------------------------------------------------------------------------
    \26\Protecting America's Harvest: Hearing Before the Subcomm. on 
Immigration, Citizenship, Refugees, Border Security, and International 
Law of the H. Comm. on the Judiciary, 111th Cong. 22 (Sept. 24, 2010) 
(statement of Phil B. Glaize, Chairman, U.S. Apple Association).

Glaize's experience is reflected in our trade deficit in fresh 
and processed fruits and vegetables. In 2011, U.S. fruit and 
vegetable imports exceeded exports by $11.2 billion.\27\ The 
trade deficit has widened significantly and rapidly over the 
years, such that the country went from having a net trade 
balance in the mid-1990s to being a net importer today.\28\
---------------------------------------------------------------------------
    \27\Renee Johnson, The U.S. Trade Situation for Fruit and Vegetable 
Products, Congressional Research Service, Dec. 17, 2012 (RL34468), 1.
    \28\Id.
---------------------------------------------------------------------------
    Writing in opposition to the Legal Workforce Act in the 
112th Congress, Laurie Fischer, Executive Director, Dairy 
Business Association noted, ``Without American farms, you can 
bet more food production would continue to move overseas, 
forcing America to rely on foreign countries for food. That's a 
foreign policy nightmare making us vulnerable to a number of 
threats.''\29\ The Agriculture Coalition for Immigration Reform 
also warns that China, one of the leading importers of fruits 
and vegetables into the United States, is frequently cited for 
``food and product contamination that leads to illness and 
death.''\30\ As Glaize noted in testimony before the Committee, 
``China has requested access to our market for fresh apples and 
they are the world's largest producer. If the U.S. apple 
industry were to go out of business, the Chinese are ready to 
step in and supply our apples.''\31\
---------------------------------------------------------------------------
    \29\Laurie Fischer, E-Verify Proposal a Bad Idea for Dairy State, 
The Cap Times, Aug. 13, 2011, available at http://host.madison.com/ct/
news/opinion/column/article_2ff44f54-a5f4-5ef4-9d40-4d8d678990db.html.
    \30\E-Verify--Preserving Jobs for American Workers: Hearing Before 
the Subcomm. on Immigration Policy and Enforcement of the H. Comm. on 
the Judiciary, 112th Cong. 107 (2011) (statement of the Agriculture 
Coalition for Immigration Reform).
    \31\Glaize testimony, supra note 26, at 22.
---------------------------------------------------------------------------

                II. H.R. 1772 WILL HARM AMERICAN WORKERS

A. LAuthorized Workers Will be Wrongfully Denied the Right to Work Due 
        to Database Errors and Employer Misuse
    Few people argue with the idea that employers should have a 
cheap, quick, and easy way to confirm the employment 
authorization of people they intend to hire. That is precisely 
what E-Verify promises to be. Unfortunately we know from years 
of experience that E-Verify is not infallible; the databases 
that are checked to confirm U.S. citizenship or employment 
authorization contain errors and employers entering data into 
the system make mistakes and sometimes fail to give workers an 
opportunity to correct errors. Because the law prohibits 
employers from knowingly hiring or employing a person who is 
not authorized to work, mistakes such as these can prevent U.S. 
citizens and employment authorized noncitizens from getting or 
retaining jobs.
    In the 110th Congress, the Immigration Subcommittee held 
several hearings on the need to protect U.S. workers who may be 
erroneously identified as unauthorized to work by E-Verify. In 
December 2006, the Inspector General of the SSA found that 17.8 
million SSA records (4.1 percent) contained errors that could 
result in ``incorrect feedback: when those workers are queried 
through the E-Verify system.\32\ At one such hearing, the 
Service Employees International Union testified that ``[u]nless 
database errors are cured, 24,000 of the estimated 300,000 
workers in each congressional district would be required to 
spend several hours attempting to straighten out SSA of USCIS 
records in order to continue their employment.\33\
---------------------------------------------------------------------------
    \32\Office of the Inspector General, Social Security 
Administration, Congressional Response Report: Accuracy of the Social 
Security Administration's Numident File, December 2006, A-08-06-26100, 
5 available at http://oig.ssa.gov/sites/default/files/audit/full/pdf/A-
08-06-26100.pdf.
    \33\Proposals for Improving the Electronic Employment Verification 
and Worksite Enforcement System: Hearing Before the Subcomm. on 
Immigration, Citizenship, Refugees, Border Security, and International 
Law of the H. Comm. on the Judiciary, 110th Cong. 59 (2007) (statement 
of Robert H. Gibbs, Service Employees International Union). Because of 
the increased workload that mandatory E-Verify will place on the Social 
Security Administration, AARP, the National Committee to Protect Social 
Security and Medicare, and the Strengthen Social Security Campaign, 
which is comprised of over 320 organizations representing more than 50 
million members, opposed the Legal Workforce Act in the 112th Congress. 
These groups feared that given the lengthy SSA hearing backlogs that 
already keep hundreds of thousands of Americans, including low income 
persons who are blind, elderly, or disabled, from receiving the 
benefits they are due, greatly increasing the workload of the SSA 
amidst continuing funding cuts for the agency would hinder the SSA's 
ability to carry out its core mission of serving America's seniors and 
disabled workers. See Letter from David P. Sloane, Senior Vice 
President, Government Relations and Advocacy, AARP, to Hon. Sam 
Johnson, Chairman & Hon. Xavier Becerra, Ranking Member (Apr. 14, 2011) 
(on file with the H. Comm. on the Judiciary, Democratic Staff); The 
Social Security Administration's Role in Verifying Employment 
Eligibility: Hearing Before the Subcomm. on Social Security of the H. 
Comm. on Ways and Means, 112th Cong. (2011) (statement of Barbara B. 
Kennelly, President and CEO, National Committee to Preserve Social 
Security and Medicare); Letter from Nancy Altman, Campaign Co-Chair, 
Strengthen Social Security Campaign, et al. to Hon. Dave Camp, Chairman 
& Hon. Sander Levin, Ranking Member (Sept. 14, 2011) (on file with the 
H. Comm. on the Judiciary, Democratic Staff); Letter from Nancy Altman, 
Campaign Co-Chair, Strengthen Social Security Campaign, et al. to Hon. 
Lamar Smith, Chairman & Hon. John Conyers, Jr., Ranking Member (July 
25, 2011) (on file with the H. Comm. on the Judiciary, Democratic 
Staff).
---------------------------------------------------------------------------
    In December 2009, an independent study of E-Verify 
performed by the Westat Corporation used modeling to 
demonstrate that 0.8 percent of authorized workers could 
receive erroneous Tentative Nonconfirmations (TNCs) of their 
employment eligibility.\34\ A more recent Westat study 
published in July 2012 concluded that the percentage of 
erroneous TNCs issued to authorized workers in FY 2009 had been 
reduced to 0.3 percent.\35\ Since employers do not always 
notify employees of TNCs, each of these authorized workers 
faces the possibility of wrongful termination--in any event, 
each of these people would have to spend time contesting the 
erroneous TNC.
---------------------------------------------------------------------------
    \34\Findings of the Web-Based E-Verify Program Evaluation (Westat, 
Dec. 2009), 117, www.uscis.gov/USCIS/E-Verify/E-Verify/Final%20E-
Verify%20Report%2012-16-09_2.pdf.
    \35\Evaluation of the Accuracy of E-Verify Findings (Westat, July 
2012), 22, http://www.uscis.gov/USCIS/Verification/E-Verify/E-
Verify_Native_Documents/Everify%20Studies/
Evaluation%20of%20the%20Accuracy%20of%20EVerify%20Findings.pdf.
---------------------------------------------------------------------------
    Although a 0.3 percent error rate sounds small, the real-
world impact on new and existing hires would be quite dramatic. 
The Legal Workforce Act would require verification of all newly 
hired workers (approximately 54 million each year)\36\ and 
would permit reverification of all current workers 
(approximately 156 million),\37\ meaning that the 0.3 percent 
error rate would be between 162,000 to 468,000 authorized 
workers. Hundreds of thousands of American citizens and 
authorized non-citizens would therefore be at risk of losing 
their jobs or job opportunities due to erroneous TNCs.
---------------------------------------------------------------------------
    \36\See Bureau of Labor Statistics, Hires, Quits, Layoffs, and 
Other Job Separations in 2013, U.S. Dept. of Labor, July 1, 2014, 
http://www.bls.gov/opub/ted/2014/ted_20140701.htm (last visited Dec. 9, 
2014).
    \37\See Bureau of Labor Statistics, Table A-1. Employment Status of 
the Civilian Population by Sex and Age, U.S. Dept. of Labor, Dec. 5, 
2014, http://www.bls.gov/news.release/empsit.t01.htm (last visited Dec. 
9, 2014).
---------------------------------------------------------------------------
    Not all people would share this burden equally. Although 
Westat found that the TNC error rate for U.S. citizens had 
decreased from 0.6 percent to 0.2 percent from 2005 to 2010, 
the error rate for noncitizens remained unchanged over that 
period and significantly higher.\38\ For LPRs and other 
noncitizens, the error rate was 1.5 percent in 2005 and 2.0 
percent in 2010.\39\ That means that a noncitizen in 2010 was 
approximately ten times more likely to receive an erroneous TNC 
than a U.S. citizen.
---------------------------------------------------------------------------
    \38\2012 Westat Report, supra note 35 at 24.
    \39\Id.
---------------------------------------------------------------------------
    The danger that authorized workers may ultimately be 
terminated as a result of these verification errors is not 
speculative. Westat recently estimated that while 94 percent of 
Final Nonconfirmations (FNCs) issued in Fiscal Year 2009 were 
correctly provided to persons not authorized to work, 6 percent 
were inaccurately issued to employment-authorized workers, 
including U.S. citizens and lawful permanent residents.\40\ But 
as the National Immigration Law Center points out in its recent 
report, Verification Nation, ``Westat 2012 assumes that 70 
percent of employment-authorized workers who received a TNC 
were properly informed of the TNC by their employer. However, 
the percentage of workers who are informed by their employer of 
a TNC is likely significant lower than 70 percent.''\41\ As a 
result, the FNC inaccuracy rate is likely higher than 6 
percent. As more employers are required to use E-Verify over 
the aggressive 2-year period in the Legal Workforce Act and 
employers are permitted to use E-Verify in ways that are 
currently prohibited by law, we can expect to see more 
erroneous FNCs caused by user error and employer abuse. The end 
result will be greater numbers of authorized workers denied job 
opportunities or wrongfully terminated from employment.
---------------------------------------------------------------------------
    \40\Id. at 22.
    \41\National Immigration Law Center, Verification Nation, Aug. 
2013, 4.
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B. LPermitting Employers to Pre-Screen Job Applicants and Selectively 
        Reverify Existing Employees Will Increase Discrimination and 
        Employer Abuse
    The possibility of erroneous TNCs is particularly troubling 
when combined with important changes made by the Legal 
Workforce Act to E-Verify. Under current law, employers are 
prohibited from pre-screening job applicants with E-Verify 
before the date of hire. Nevertheless, Westat recently 
identified a ``significant increase'' in the percentage of 
employers who violate this rule--from 2008 to 2013, the 
percentage of employers who reported practices that constitute 
pre-screening increased from 4 percent to 9 percent.\42\
---------------------------------------------------------------------------
    \42\Findings of the E-Verify User Survey (Westat, April 30, 2014), 
47, http://www.uscis.gov/sites/default/files/USCIS/Verification/E-
Verify/E-Verify_Native_Documents/Everify%20Studies/E-
Verify_User_Survey_Report_April2014.pdf.
---------------------------------------------------------------------------
    The Legal Workforce Act eliminates the current 
prohibition--which is intended to protect American workers--and 
explicitly authorizes pre-screening of workers. When a job 
applicant is pre-screened and receives a TNC, an employer may 
make a business decision to not notify the applicant of the TNC 
and to withdraw the offer of employment. The employer would 
know that the time and resources that they and their new hire 
will have to expend to correct erroneous records may be 
substantial. Failure to notify workers about TNCs already 
accounts for the vast majority of FNCs issued to employment-
authorized persons; Westat recently concluded that although 94 
percent of FNCs were issued correctly to unauthorized workers 
in Fiscal Year 2009, that figure would have been 99 percent if 
all employment-authorized workers had been informed of their 
TNCs and how to correct them.\43\ U.S. Citizenship and 
Immigration Services is currently working to provide 
notification of TNCs directly to workers, but that process is 
only just beginning and will likely face practical hurdles 
along the way. Permitting employers to pre-screen job 
applicants will exacerbate the problem of U.S. workers being 
denied job opportunities because of database and user errors.
---------------------------------------------------------------------------
    \43\2012 Westat Report, supra note 35 at 39.
---------------------------------------------------------------------------
    Allowing for pre-screening also increases the risk that job 
applicants will be selectively verified in a discriminatory 
manner based on their race or national origin. After Georgia 
enacted HB 87, its controversial immigration law, one Atlanta 
chef admitted that when he received 50 applications for a job 
posting he ``threw out all the ones that looked to be Mexican. 
. . . I don't know if those folks are legal or not, but I just 
didn't want to even have to think about it.''\44\ Such 
discriminatory conduct would effectively be sanctioned by the 
Legal Workforce Act, because it would permit an employer to 
selectively pre-screen ``all the ones that looked to be 
Mexican'' and verify all other applicants only after the date 
of hire.
---------------------------------------------------------------------------
    \44\Besha Rodell, Georgia's Immigration Law and the Restaurant 
Industry, Creative Loafing, July 11, 2011, http://clatl.com/atlanta/
georgias-immigration-law-and-the-restaurant-industry/
Content?oid=3526518.
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    In order to protect American workers and reduce the risk of 
discrimination, Representative Zoe Lofgren (D-CA) introduced an 
amendment that would have required employers to notify the 
Secretary of Homeland Security in advance of using E-Verify to 
pre-screen job applicants in much the same way that federal 
contractors currently must notify DHS before verifying the 
employment authorization of current employees. The amendment 
also would have required employers who choose to verify a 
person prior to the date of hire to do so for all such hires. 
The amendment was intended to ensure proper oversight in order 
to prevent employers from taking adverse or discriminatory 
actions against job applicants. The amendment was defeated on a 
party-line vote of 8-20.\45\
---------------------------------------------------------------------------
    \45\Markup Tr. at 60.
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    The Legal Workforce Act also weakens an important 
protection in current law that prohibits employers from 
targeting particular employees or classes of employees for 
reverification. As introduced, the bill required that an 
employer who chooses to voluntarily reverify an existing 
employee only do so if the employer reverifies all persons so 
employed. This protection, which applies even for those 
employers who are currently permitted to reverify existing 
employees, is intended to prevent employers from discriminating 
on the basis of race, ethnicity, or real or perceived national 
origin by selectively forcing some employees to be reverified. 
By requiring employers to use E-Verify in a consistent manner 
for all employees, this also makes it more difficult for 
employers to target particular employees for harassment or 
intimidation; this is particularly important where authorized 
and unauthorized workers are susceptible to retaliation and 
abuse on account of their advocacy for better wages and working 
conditions.
    During the markup of H.R. 1772, Representative Steve King 
(R-IA) offered an amendment designed to weaken protections 
against selective reverification. The amendment required that 
in order for an employer to reverify an existing employee, the 
employer would only have to reverify all other employees at the 
same geographic location or within the same job category as 
that employee. The amendment was adopted by voice vote.\46\ As 
a result, the bill as reported by the Committee gives employers 
a new and powerful tool to retaliate against employees at 
particular job sites or in certain job categories that are 
organizing for better worker protections.
---------------------------------------------------------------------------
    \46\Id. at 59.
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C. LH.R. 1772 Conspicuously Fails to Include Any Penalties for 
        Employers Who Violate the Bill's Protections for American 
        Workers and Authorized Non-Citizens
    While H.R. 1772 does include various protections for 
American workers and authorized non-citizens, the legislation 
fails to include any associated penalties for employers who 
fail to follow these guidelines. Specifically, the bill 
requires employers to notify workers when the verification 
system provides a TNC, but it imposes no penalty if the 
employer violates this requirement. The bill prohibits 
employers from terminating employees or rescinding job offers 
based on TNCs until such employers receive FNCs, but the bill 
again imposes no penalty for violating that protection. The 
bill permits employers to reverify existing employees only 
under certain conditions, but imposes no penalties on employers 
who do otherwise. Further yet, the bill does not prohibit 
employers from taking adverse employment actions short of 
termination--such as withholding pay, delaying training, or 
reducing work hours--based on a TNC.
    It is worth noting that while an employer would not face 
penalties for violating worker protections, they may face 
penalties if they violate the mandates that employers verify 
new hires, re-verify current employees in certain 
circumstances, notify DHS if they choose not to terminate an 
employee after receiving an FNC, and refrain from putting false 
information into the verification system.
    In order to correct this serious imbalance, Ranking Member 
John Conyers, Jr. (D-MI) offered an amendment that would have 
applied the existing penalty structure for employment of 
unauthorized workers to violations of worker protections. The 
amendment also would have protected workers from adverse 
employment actions on the basis of a TNC and made the willful 
misuse of the verification system an unfair immigration-related 
employment practice. This would have empowered the Office of 
Special Counsel of the U.S. Department of Justice to 
investigate such abuses and would have helped ensure persons 
harmed by unlawful conduct could obtain relief. The amendment 
was defeated on a party-line vote of 13-18.\47\
---------------------------------------------------------------------------
    \47\Id. at 35.
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    Representative Judy Chu (D-CA) offered an additional 
amendment to increase the penalties on employers who engage in 
unfair immigration-related employment practices, as defined by 
section 274B of the INA. The amendment highlighted that while 
the underlying bill increases the penalties related to unlawful 
hiring or employment of persons not authorized to work, it does 
nothing to increase the penalties related to discrimination and 
other unlawful immigration-related employment practices. The 
amendment failed by a party-line vote of 12-20.\48\
---------------------------------------------------------------------------
    \48\Id. at 154.
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D. LAmerican Workers Wrongfully Terminated Because of E-Verify Will 
        Have Few Due Process Protections and Limited Access to Relief
    In addition to lacking meaningful provisions to protect 
workers from wrongfully being terminated as a result of 
employer abuse or E-Verify error, H.R. 1772 also restricts the 
ability of workers to seek redress. The bill does this in two 
important ways.
    First, the Legal Workforce Act makes the Federal Tort 
Claims Act (FTCA) the sole remedy for a job loss caused by an 
E-Verify error. An FTCA lawsuit against the federal government 
in our crowded federal courts will take months or years. Before 
filing a suit, the worker would first have to file an 
administrative claim and wait for either a denial of that claim 
or the passage of 6 months. In these tough economic times, the 
worker would likely be jobless and without pay for this entire 
period.
    Moreover, the FTCA is an inadequate remedy, because workers 
who lose their jobs due to E-Verify errors will get nothing if 
they cannot prove that the error resulted from a ``negligent or 
wrongful act or omission of any employee of the 
Government.''\49\ In some instances, the wrongful termination 
may have resulted from typographic errors made by the employer 
inputting the employee's information into the system. In other 
instances an error by a government employee simply might not 
have risen to the level of negligence required to justify 
relief under the FTCA. The government also can argue that 
claims may be barred by various exceptions to government 
liability under the FTCA. In an FTCA case alleging that a 
government employee negligently maintained the database that 
resulted in an erroneous final nonconfirmation, the government 
would likely invoke the ``discretionary function exception'' of 
the FTCA.\50\
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    \49\28 U.S.C. Sec. 1346(b)(1).
    \50\28 U.S.C. Sec. 2680(a).
---------------------------------------------------------------------------
    During the markup, Representative Hakeem Jeffries (D-NY) 
offered an amendment that would add meaningful due process 
protections for workers who receive FNCs and would ensure that 
wrongfully terminated authorized workers have access to 
appropriate remedies. The amendment created an administrative 
appeals process and authorized judicial review for FNCs, 
permitted workers to remain employed during this appeals 
process, and ensured that back pay and attorney's fees will be 
provided to persons who lose their jobs due to system or 
employer error. The amendment would have satisfied Westat's 
2011 recommendation that USCIS ``[c]onsider adding a formal 
appeal process that employers or their workers could use if 
they disagree with the final E-Verify finding.''\51\ The 
amendment was rejected by voice vote.\52\
---------------------------------------------------------------------------
    \51\2014 Westat Report, supra note 42 at xxviii.
    \52\Markup Tr. at 242.
---------------------------------------------------------------------------
    Second, the legislation prohibits wrongfully terminated 
American workers from bringing class action lawsuits under the 
FTCA. As Representative Ted Deutch stated in support of his 
amendment to strike this language in the bill, ``[c]lass 
actions . . . are an essential means by which courts can 
effectively manage their dockets and address claims that impact 
a large number of people in a similar manner.''\53\ Because of 
the great cost involved in bringing any lawsuit, let alone a 
suit against the United States Government, class action 
lawsuits are often essential for persons who lack the means to 
bring an individual lawsuit. By prohibiting class actions, the 
Legal Workforce Act creates a barrier that will prevent 
American workers and authorized non-citizens who have been 
wrongfully terminated from having their day in court. The 
amendment offered by Representative Deutch was defeated on a 
party-line vote of 7 to 20.\54\
---------------------------------------------------------------------------
    \53\Id. at 194.
    \54\Id. at 210.
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III. H.R. 1772 WILL DRIVE WORKERS OFF-THE-BOOKS, UNDERCUTTING AMERICAN 
                WORKERS AND DECREASING FEDERAL REVENUES

    During the Committee's consideration of the Legal Workforce 
Act, the Majority frequently argued that because every job held 
by an undocumented worker is a job that could and would be held 
by an American worker, E-Verify actually would free up jobs for 
millions of American workers. That claim, which has been a 
favorite of Roy Beck, founder and CEO of NumbersUSA,\55\ is 
belied by the fact that all major labor unions, as well as 
labor economists of every political stripe, opposed the bill 
during the 112th Congress because of the detrimental effect it 
would have on workers, employment relationships, and government 
revenues.\56\
---------------------------------------------------------------------------
    \55\Roy Beck, Obama's Immigration Opportunity, Politico, Feb. 3, 
2011, http://www.politico.com/news/stories/0211/48748.html.
    \56\See, e.g., American Federation of Labor and Congress of 
Industrial Organizations, American Federation of State, County and 
Municipal Employees, Service Employees International Union; Letter from 
John W. Wilhelm, President, UNITE Here! to Hon. Lamar Smith, Chairman 
and Members of the Judiciary Committee (Sept. 21, 2011) (on file with 
the H. Comm. on the Judiciary, Democratic Staff).
---------------------------------------------------------------------------
    Rather than free up jobs for American workers, in places 
where E-Verify has been mandated we have seen employers simply 
take workers off-the-books entirely and into the underground, 
cash economy. When Arizona mandated the use of E-Verify under 
state law, the self-employment rate in the state doubled, while 
the rate of wage and salary work decreased.\57\ Testifying 
before the Pennsylvania legislature in opposition to a measure 
that would have mandated the use of E-Verify for employers in 
the state, Kay Hollabaugh of Hollabaugh Bros. Farm ``cited a 
fellow farmer in Arizona, where E-Verify is mandatory, who 
stopped checking workers against the database because it took 
too long when ripe fruit needed to be plucked. The Arizona 
farmer stopped issuing paychecks and withholding taxes, and 
began paying cash under the table.''\58\
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    \57\Magnus Lofstrom, Sarah Bohn, & Stephen Raphael, Lessons from 
the 2007 Legal Arizona Workers Act, Public Policy Institute of Arizona, 
Mar. 2011, 24-25.
    \58\Matza, Farmers Say Stricter Immigrant Screening Could Hurt 
Their Businesses, supra note 21.
---------------------------------------------------------------------------
    Driving workers off-the-books and into the cash economy--
which is what could happen to millions of the undocumented 
workers already in our workforce if we mandate the use of E-
Verify outside of comprehensive immigration reform--would have 
several pernicious effects. First, according to the 
Congressional Budget Office (CBO) and the Joint Committee on 
Taxation (JCT), it would decrease net federal revenues by $39 
billion over a 10-year period.\59\ Second, it would cheat 
workers out of critical protections such as the right to 
minimum wage and the availability of employer-provided health 
insurance, retirement benefits, or paid leave. It would also 
strip the right to workers' compensation if a person is injured 
or killed on the job and eliminate the availability of 
unemployment insurance if the worker is laid off. By 
incentivizing a shift to off-the-books arrangements, H.R. 1772 
would further reduce the wages and working conditions of all 
workers, including American workers, at a time when such 
workers can least afford it.
---------------------------------------------------------------------------
    \59\See Congressional Budget Office, Cost Estimate, supra note 1.
---------------------------------------------------------------------------

 IV. H.R. 1772 IMPOSES ADDITIONAL GOVERNMENT REGULATIONS AND UNFUNDED 
                      MANDATES ON SMALL BUSINESSES

    E-Verify is often described as ``free to use,'' but this 
fails to account for the money that businesses must spend on 
training, equipment, and maintenance, as well as the staff time 
that goes into managing these aspects of the system. According 
to a study by Bloomberg Government, mandating the use of E-
Verify for new hires alone would cost small businesses with 
fewer than 500 employees about $2.6 billion every year to 
verify new hires through the system.\60\ But because H.R. 1772 
requires checks on many existing employees as well all new 
hires, the costs to small businesses would be even greater. 
Small businesses will be shouldered with a more significant 
cost burden than larger businesses because as Bloomberg 
reports, ``large firms are able to spread the set-up and 
maintenance costs across a larger number of queries, tapping 
into the program's economies of scale.''\61\ Small businesses, 
by contrast, are not be able to absorb the cost of outsourcing 
the new requirements and they often do not even have a 
dedicated human resources department that specializes in such 
matters. In 2008, for example, it cost small businesses that 
had just enrolled in E-Verify an average of $127 to run a new 
hire query, compared to $63 for all firms.\62\
---------------------------------------------------------------------------
    \60\Jason Arvelo, `Free' E-Verify May Cost Small Business $2.6 
Billion, Bloomberg Government, Jan. 27, 2011.
    \61\Id.
    \62\Id.
---------------------------------------------------------------------------
    The disproportionate burden that E-Verify places on small 
businesses is an important explanation of why large employers 
are far more likely than small businesses to participate in the 
current E-Verify system. According to a December 2010 report by 
the Westat Corporation, ``[w]hile 58 percent of E-Verify users 
were large employers (with 100 or more employees), only 2 
percent of all employers nationally are in this size category. 
. . . Similarly, while 8 percent of E-Verify users were small 
employers (with 2-14 employees), 89 percent of all U.S. 
employers were small.''\63\ Nearly half of the non-
participating employers surveyed by Westat reported that 
participating would be too costly and burdensome.\64\
---------------------------------------------------------------------------
    \63\The Practices and Opinions of Employers Who Do Not Participate 
in E-Verify (Westat, Dec. 2010), 29, available at http://www.uscis.gov/
USCIS/Resources/Reports/E-Verify/e-verify-non-user-dec-2010.pdf.
    \64\Id. at 21.
---------------------------------------------------------------------------
    The Main Street Alliance--a national network of small 
business leaders that creates opportunities for Main Street 
business owners to speak for themselves on issues that matter 
to businesses and local economies--opposed the Legal Workforce 
Act in the 112th Congress, in part, because it was a threat to 
small business and local economies.\65\ The National Small 
Business Association, representing more than 150,000 small 
businesses, also opposed the bill for these reasons.\66\ Their 
opposition is important, since small businesses make up 99.7 
percent of all American employer firms and created 64 percent 
of all new net jobs between 1993 and 2011.\67\ H.R. 1772 could 
impose crippling costs on these businesses, the engines of job 
creation in America, just when we most need those businesses to 
create jobs.
---------------------------------------------------------------------------
    \65\Letter from the Main Street Alliance to Hon. Lamar Smith, 
Chairman & Hon. John Conyers, Jr., Ranking Member (Sept. 14, 2011), 
available at http://mainstreetalliance.org/wp-
content/uploads/2011/09/MSA-letter-to-House-Judiciary-Committee-on-HR-
2885-Sept-14-2011.
pdf.
    \66\House Committee Approves Bill to Mandate E-Verify, National 
Small Business Association, Sept. 27, 2011, http://www.nsba.biz/
content/4212.shtml.
    \67\Small Business Association, Office of Advocacy, Frequently 
Asked Questions, updated Sept. 2012, http://www.sba.gov/sites/default/
files/FAQ_Sept_2012.pdf.
---------------------------------------------------------------------------
    Representative Chu offered two amendments en bloc to help 
us understand the financial burdens that H.R. 1772 would impose 
on small businesses and to empower DHS to make grants available 
to small businesses to offset some of the costs of complying 
with the bill's requirements. The amendments were defeated on a 
party-line vote of 9-21.\68\
---------------------------------------------------------------------------
    \68\Markup Tr. at 163.
---------------------------------------------------------------------------

                               CONCLUSION

    There is little disagreement among Members of Congress that 
all employers in the country should be required to verify the 
employment authorization of their new hires and that E-Verify 
will likely play an important role in making sure this happens. 
However, we have learned through years of hearings and markups 
on the subject that without top-to-bottom reform of our 
immigration laws, expanding E-Verify would decrease federal 
revenues by billions of dollars each year and devastate the 
agricultural industry, leading to the mass off-shoring of 
millions of U.S. jobs.
    We have also learned that while E-Verify is getting more 
accurate over time, errors do persist. Some of these errors are 
the result of mistakes in government databases or user error by 
employers inputting the data. Other errors are the result of 
employers who intentionally or unintentionally fail to abide by 
the law by, among other things, terminating employees without 
providing an opportunity to challenge a tentative non-
confirmation of employment authorization. In order to avoid 
serious consequences for innumerable American workers, it is 
critical that any bill mandating the use of E-Verify contain 
meaningful due process protections and substantial penalties 
for employers who break the rules. H.R. 1772 fails on both 
counts.
    For all of these reasons, we respectfully dissent and urge 
our colleagues to reject this dangerous legislation.

                                   John Conyers, Jr.
                                   Jerrold Nadler.
                                   Robert C. ``Bobby'' Scott.
                                   Zoe Lofgren.
                                   Sheila Jackson Lee.
                                   Steve Cohen.
                                   Henry C. ``Hank'' Johnson, Jr.
                                   Pedro R. Pierluisi.
                                   Judy Chu.
                                   Ted Deutch.
                                   Luis V. Gutierrez.
                                   Karen Bass.
                                   Cedric Richmond.
                                   Suzan DelBene
                                   Joe Garcia.
                                   Hakeem Jeffries.
                                   David N. Cicilline.