Small Business

Small Biz Screens for Work Status


A number of employers are signing up for a program that uses government databases to weed out illegal hires

A small but growing number of small businesses and franchises are using a voluntary federal program that checks new employees' legal work status against government databases. Participation in the program, known as Basic Pilot, signals that the debate over how to prevent the widespread hiring of illegal immigrants is spreading to small businesses.

Both the controversial immigration-enforcement bill passed by the House in December and the bill passed by the Senate on May 25 call for mandatory implementation of an employment-verification system similar in theory to Basic Pilot (see BW Online, 5/29/06, "Hiring Illegals: Inside the Deal Ahead").

But some employers aren't waiting for the proposed new system (which would require all U.S. employers to submit job applicants' Social Security numbers or another ID to a new federal verification system and face stiff fines for violations) because it could take at least two years to go into effect.

CHECKING THE LIST.

On May 30, Dunkin' Brands, the parent company of Dunkin Donuts, announced that it would require all 5,000 of its franchisees to participate in the Basic Pilot verification program starting June 1 (see BW Online, 04/11/ 2006, "Dunkin' Donuts' Cheap Chic"). Gerri Ratliff, chief of the verification division for U.S. Citizenship & Immigration Services (USCIS), says Dunkin' Brands isn't alone -- roughly 200 new companies -- both small and large businesses -- are signing up for the free program every month. Over 6,200 U.S. employers have joined so far.

The Basic Pilot was introduced in 1997 in California, Florida, Illinois, New York, and Texas after a 1994 report by the U.S. Congress's bipartisan Commission on Immigration Reform concluded that the single most important step to reduce unlawful migration would be the development of a more effective system for verifying work authorization. Under the program, participating employers review and record I-9 documents for all newly hired employees as they always have, and then submit the information for verification against U.S. government Department of Homeland Security (DHS) and Social Security Administration (SSA) databases.

"Dunkin' Brands is participating in [the] Basic Pilot program because we see it as a way to help our franchisees comply with the laws when the authenticity of their new hires' credentials are difficult to discern," said Dunkin' Brands Chief Legal Officer Stephen Horn in an e-mail statement. "We were compelled to participate in the [program] because of the difficulty faced by employers for screening new hires within the confines of the law."

TRUST BUILDER?

Although implementing the Basic Pilot program isn't a 100% guarantee a company won't be audited by the DHS, it probably can't hurt, some suggest. "It's like a Good Housekeeping seal of approval for your business," says Doris Meissner, a senior fellow at the Migration Policy Institute, a non-partisan think-tank based in Washington, D.C., and commissioner of the Immigration & Naturalization Service from 1993 to 2000.

Basic Pilot can build trust between a company and its clients, says Judith Ayari, director of human resources and administrative operations for Fairfield (N.J.)-based Comtec, an automated bill processing company. "After seeing the Wal-Marts (WMT) of the world getting fined millions of dollars, this was something we wanted, to add that extra level of security and trust between us and our clients," she says.

And it saves small companies the precious dollars they might otherwise have to spend on a thorough background check. "I don't only use it [to check their legality], but also to verify their [Social Security number] for payroll purposes," says Lisa McKenzie, human-resources manager for NVC Logistics Group, a transportation logistics company based in New Jersey.

NOT FOOLPROOF.

But there are some documented problems with the system. The data that it calls upon is often flawed, says Scott Vinson, vice-president of government relations for the National Council of Chain Restaurants, a national trade association. Vinson says those flaws in SSA and DHS databases, along with employer errors, cause a high level of false negatives, or cases in which work-eligible individuals are not confirmed.

These false negatives are particularly likely to affect recent immigrants and other legal non-citizens, most often due to typos in uncommon names and other clerical errors. And with employers prioritizing rapid resolution over fairness, false negatives often lead to lost employment opportunities, according to a November, 2005, report issued by the Migration Policy Institute.

COMPUTER BASED.

Chances are slim that small business owners will be forced to implement such a program in the next couple of years. "To bring the databases to a truly dependable level will take at least three years and several hundred million dollars," says Meissner. If they try to rush it through, the effects on the economy and the hiring climate could be destructive. "It would be very dangerous and ill-advised if there were legislation that forced this to be mandatory prematurely," Meissner adds.

The proposed implementation of a new mandatory program would present serious problems for companies that don't use computers, since the databases are accessible via the Internet. That's why the USCIS is looking into a phone-based delivery method as it continues development of a widespread employment verification service. "We're open to hearing from small business owners on how they would like to adapt it to their needs," says Ratliff.

Many are optimistic about the potential of such an employment verification system. "This has the potential of being a very good system and an important answer to the problem of illegal immigration," says Meissner.

Jeffrey Gangemi is member of the MBA Class of 2009 at the Johnson Graduate School of Management at Cornell University. He was previously a staff writer for BusinessWeek.com.

Best LBO Ever
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus