State Mandatory E-Verify Bills
An Analysis of Iowa’s HF 2156 (2012)
Overview: HF 2156 creates state-level penalties (suspending and revoking business licenses) for
employers who knowingly hire unauthorized workers; it also requires employers in the state to use EVerify to verify the work authorization of all new hires. This bill is similar to Arizona’s 2007 Legal
Arizona Workers Act (enacted and currently in force) and South Dakota’s HB 1238 (proposed in 2012).
Section 1
HF 2156 applies to any ―employer‖ that transacts business in, and has been licensed by, the state of Iowa.
It covers all employers of any size (even self-employed persons and independent contractors). An
independent contractor is not an ―employee,‖ however, for the purposes of this bill.
Section 1 defines ―knowingly employ[ing] an unauthorized alien‖ to include those actions that are
described in the provision of the Immigration and Nationality Act pertaining to the ―Unlawful
Employment of Aliens‖ (8 U.S.C. 1324a) and instructs that the phrase be interpreted consistently with
that provision.1 Section 1 also defines ―unauthorized alien‖ as someone who does not have the legal right
to work under federal law (8 U.S.C. 1324(h)(3)). Section 1 defines other terms in the bill as well.
Section 2
Section 2(1). ―An employer shall not knowingly employ an unauthorized alien.‖ It also prohibits
employers from knowingly contracting with an unauthorized worker to perform labor or knowingly
contracting with a person who employs or contracts with an unauthorized worker to perform labor.
Section 2(2). This section prescribes a complaint process whereby anyone may file a complaint (including
an anonymous complaint) with the Attorney General to allege violations of this act.
Certain consequences for employers and unauthorized workers attach merely upon receipt of a
complaint. All of the following actions take place before a court rules on whether an employer has
violated the act:

1
Check work authorization status: (Section 3) The county or state Attorney General (AG) must
investigate all complaints that are filed on the prescribed complaint form, even if the complaint
ends up being false or frivolous; in order to investigate, the AG must verify the alleged
unauthorized worker’s work authorization with the federal government. The AG has discretion to
investigate complaints that are not filed on the prescribed complaint form – even completely
―(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…‖ [emphasis added] 8. U.S.C. § 1234a(a)(1)(A). This provision of the INA does not reference intentional hiring,
but ―knowingly‖ is broader than ―intentionally‖; the Legal Arizona Workforce Act, which the U.S. Supreme Court last year
found to be constitutional, contained both ―knowingly‖ and ―intentionally‖ as well.
1


anonymous complaints. While Section 2(2)(c) stipulates that the AG cannot investigate
complaints based solely on race, color, or national origin, it is unclear how the AG would
determine this. While Section 2(2)(d) stipulates that a person who knowingly files a false or
frivolous complaint is guilty of a simple misdemeanor, the employee’s work authorization status
will still be verified for every single complaint made.
Notify ICE and local police: (Section 2(3)) If the complaint is not determined to be false or
frivolous, the AG must notify both ICE and local law enforcement of the unauthorized worker.
Bring action against employer: (Section 2(4)) If the complaint is not determined to be false and
frivolous, the AG must bring action against the employer. This subsection describes when and
where legal actions against employers may be filed.
Section 2(5). This section describes consequences for employers once a court finds their first violation:




The employer must terminate the employment of all unauthorized workers and certify that this
step has been taken. This seems to mean that, upon a finding that an employer knowingly or
intentionally hired one unauthorized worker, that employer must then re-examine the
authorization of its entire workforce. The employer must also certify that he or she will not
knowingly or intentionally hire an unauthorized worker in the future.
If the employer will NOT so certify, the court must order state agencies to suspend all licenses
held by the employer (Section 1 defines what constitutes a ―license‖).
Even if the employer takes all of the appropriate steps, the court may still consider ordering state
agencies to suspend that employer’s licenses, depending on the nature of the violation.
The employer must be placed on probation for a period of time determined by the nature of the
violation.
Section 2(6). This section describes consequences for employers for their second violation:

The court must order state agencies to permanently revoke all licenses held by the employer
specific to the business location where the violation took place.
Section 2(7). This section lays out what conduct is considered a first and second violation.
Section 2(8). This section requires the attorney general to maintain copies of court orders finding first
and second violations of this act and to make those copies publicly available on the state’s website. This
section also calls for the creation of a database of the employers and business locations that have
committed a first violation.
Section 2(9). This section states that, in determining whether an employee is unauthorized, ―the court
shall consider only the federal government’s determination…‖ This determination creates a rebuttable
presumption that employee is authorized.
Section 2(10). This section states that proof of verification through E-Verify creates a rebuttable
presumption that the employer has not violated this act.
2
Section 2(11). Employers can use ―good faith‖ compliance with federal immigration law pertaining to
verification of work authorization as an affirmative defense in proceedings under this act.
Section 2(12). This section establishes entrapment as an affirmative defense.
Section 3
Section 3 mandates that all employers in the state use the E-Verify system for all new hires. This section
also makes registration with and use of E-Verify a condition of receiving an ―economic development
incentive‖ (defined in Section 1).
Section 4
This section states that this law shall not be construed to require an employer to act in a way that he or she
believes in good faith would violate federal or state law.
Legal Analysis
Background on Federal Laws Regulating Employment of Unauthorized Workers
The federal Immigration Reform and Control Act of 1986 (IRCA) already prohibits most employers from
knowingly hiring an individual who is not lawfully present or is not authorized to work in the United
States. IRCA sets up an extensive employment verification system, whereby it requires employers to
review documents presented by new employees to establish their work eligibility and to report this
information on the federal form I-9.2 IRCA further provides penalties and sanctions for employers who
knowingly violate the law.3 Finally, IRCA expressly prevents states from passing any law ―imposing
civil or criminal sanctions (other than through licensing and similar laws) upon those who employ . . .
unauthorized aliens.‖4 IRCA thus creates a comprehensive scheme for regulating the employment of
unauthorized workers, with only one specific and narrow carve-out for limited state action.
The paper-based I-9 system was the exclusive employment verification procedure under federal law until
the passage of the Illegal Immigration Reform and Immigrant Responsibility Act of 1996 (IIRIRA).
Pursuant to IIRIRA, Congress directed the Attorney General to establish three pilot programs to verify
new employees’ eligibility for employment. Of the three pilot programs, only the Basic Pilot Program
(now called ―E-Verify‖) exists. E-Verify is an internet-based system of employment verification. It is
merely one of the ways for an employer to meet its IRCA responsibilities.
Both IIRIRA and IRCA contain strong nondiscrimination provisions, prohibiting employers from using
E-Verify or the I-9 process in a way that discriminates against employees based on their citizenship,
immigration status, or national origin.5
2
8 U.S.C. Section 1324a(b); 8 C.F.R. Section 274a2(b).
United States Government Accountability Office, ―Employment Verification: Federal Agencies Have Taken Steps to Improve
E-Verify, but Significant Challenges Remain,‖ [GAO Report] December 2010.
4
Immigration Reform and Control Act, 8 U. S. C. §1324a(h)(2).
5
GAO Report; see also Brief of Amicus Curiae Asian American Justice Center, a member of the Asian American Center for
Advancing Justice, et. al., in Support of Petitioners, Chamber of Commerce v. Whiting, p. 16-17.
3
3
Congress chose to make the E-Verify pilot program voluntary for most employers. The one exception is
federal contractors, who (pursuant to an Executive Order and subsequent federal rule6) must use the EVerify program in order to receive their contracts.
Finally, IRCA creates a substantial ―safe harbor‖ for employers who comply with the I-9 procedures.7
Unless an employer persists in violating IRCA after being put on notice of its noncompliance or engages
in a pattern or practice of violations, employers who attempt to comply in good faith are protected from
civil and criminal penalties under federal law.8
Application of HF 2156
HF 2156 is likely constitutional. The text of HF 2156 is very similar to a 2007 Arizona law called the
―Legal Arizona Workers Act (LAWA).‖ Last year, the U.S. Supreme Court upheld the constitutionality
of LAWA in Chamber of Commerce v. Whiting.9 Like HF 2156, LAWA suspends or revokes (depending
on the severity of the violation) the state-issued business licenses of employers who are found to have
knowingly or intentionally hired unauthorized workers and creates a complaint procedure for challenging
these employers; in these provisions, the language of HF 2156 tracks the language of LAWA very
closely. Also like HF 2156, LAWA mandates that employers in the state use the E-Verify system.
Those who challenged LAWA in court argued that the law unconstitutionally stepped into the exclusively
federal power to regulate immigration. They also argued that LAWA would obstruct federal execution of
federal immigration policies.
But the majority of Justices on the Supreme Court disagreed. LAWA’s business license penalty for
employers is constitutional, they held, because it fits into a narrow and explicitly protected sphere for
states to act to punish the employment of unauthorized workers. Federal immigration law expressly
prevents states from passing any law ―imposing civil or criminal sanctions (other than through licensing
and similar laws) upon those who employ . . . unauthorized aliens.‖10 Because LAWA revokes the
business licenses of employers who hire unauthorized workers, the Court held that the law falls within
this exception.
Nor is it unconstitutional, the Supreme Court held, for LAWA to mandate that employers in the state use
the E-Verify system. Such a state law is not explicitly blocked by IIRIRA;11 nor would it conflict with
the overall federal scheme regulating the employment of unauthorized workers. Critical to the Supreme
http://www.americanbar.org/content/dam/aba/publishing/preview/publiced_preview_briefs_pdfs_09_10_09_115_PetitionerAmC
uAAJCand14CivilRightsGrps.authcheckdam.pdf
6
73 F.R. 67651–705 (Nov. 14, 2008).
7
8 U.S.C. Section 1324a(b)(6)(A).
8
8 U.S.C. Section 1324a(b)(6).
9
Chamber of Commerce v. Whiting, 131 S. Ct. 1968 (2011) http://www.supremecourt.gov/opinions/10pdf/09-115.pdf.
10
8 U.S.C. Section 1324a(h)(2).
11
The Supreme Court noted that IIRIRA includes only one specific restriction regarding laws that would make E-Verify
mandatory: the Secretary of the U.S. Department of Homeland Security must receive Congressional authorization before making
the E-Verify program mandatory for any entity outside of the federal government.
4
Court’s analysis of this last point was the fact that the consequences under LAWA for an employer not
using E-Verify were the same as the consequences stated in IIRIRA: the employer can no longer avail
himself of the rebuttable presumption that he complied with the law.
This Supreme Court decision opens the door for states to pass laws that penalize employers for employing
unauthorized workers by revoking their business licenses and that mandate use of E-Verify.
It should be noted that HF 2156 penalizes employers who fail to use E-Verify more severely than LAWA
does. As previously mentioned, LAWA only penalized employers who failed to use E-Verify by denying
them the rebuttable presumption of compliance that comes from participating in E-Verify. But HF 2156
goes further. It denies noncompliant employers access to ―economic development incentives,‖ which are
defined by Section 1 of the bill as any ―grant, loan, or performance-based incentive awarded by a
government entity of this state‖ (but it does not include a ―tax credit or incentive program‖).
This part of HF 2156 is also probably constitutional. While the Supreme Court’s decision in Chamber of
Commerce v. Whiting itself may not mandate that outcome, lower federal courts’ consideration of similar
mandates (one by the Executive Branch for federal contractors, the other by the state of Oklahoma for
state contractors) tends to support its constitutionality.12
It should also be noted that, while HF 2156 is consistent with IRCA in excluding independent contractors
from its definition of ―employee,‖13 it is not consistent with IRCA insofar as it does not exempt casual
domestic work in a private home that is ―sporadic, irregular, and intermittent.‖14 As currently drafted, HF
2156 places a huge burden on individual homeowners to verify work authorization when paying
neighbors to shovel snow, for example.
Policy Analysis
Notwithstanding the fact that HF 2156 is likely constitutionally sound, there are strong arguments that HF
2156 is not good policy.
1. Mandatory E-Verify in Iowa would discourage economic activity in the state.
12
See Chamber of Commerce of the United States of America v. Janet Napolitano, No. 8:08-cv-03444-AW (D. Md. Aug. 26,
2009) (permitting President George W. Bush’s Executive Order mandating E-Verify as a condition of federal contracts);
Chamber of Commerce v. Edmondson, 594 F.3d 742 (10th Cir. 2010) (reversing injunction against a provision of the 2007
Oklahoma Taxpayers and Citizens Protection Act mandating E-Verify as a condition of state contracts).
13
HF 2156 explicitly exempts independent contractors from its definition of employee; however, it does include independent
contractor in its definition of employer. This means, presumably, that an independent contractor still must verify the work of
anyone who (as stated in Section 1) ―provides services or labor [for the independent contractor] in this state for wages or other
remuneration.‖ Thus, employers cannot get out of their verification responsibility by claiming to be independent contractors.
14
8 C.F.R. Section 274a.1(f)&(h) (―However, employment does not include casual employment by individuals who provide
domestic service in pa private home that is sporadic, irregular or intermittent‖); 8 C.F.R. Section 274a.1(g) (employers not
responsible for verifying work authorization of independent contractors). While the Third Circuit Court of Appeals was
instructed by the U.S. Supreme Court to reconsider its holding in light of Chamber of Commerce v. Whiting, that federal court
did find it legally significant that a local ordinance mandating E-Verify did not exempt independent contractors and domestic
workers as IRCA does. LAWA does not exclude either independent contractors or casual domestic workers; however, that aspect
of LAWA was not under consideration in that legal action.
5
Unauthorized workers and their family members (who may be lawfully present or even citizens) are
critical actors in Iowa’s economy as taxpayers, consumers, and entrepreneurs. The following are facts
collected by the Immigration Policy Center:15

The 2010 purchasing power of Latinos in Iowa totaled $2.9 billion—an increase of 827.2%
since 1990. Asian buying power totaled $2 billion—an increase of 637.1% since 1990,
according to the Selig Center for Economic Growth at the University of Georgia.

Iowa’s 2,834 Asian-owned businesses had sales and receipts of $782.6 million and employed
10,130 people in 2007, the last year for which data is available. The state’s 2,455 Latino owned
businesses had sales and receipts of $455.7 million and employed 3,289 people in 2007,
according to the U.S. Census Bureau’s Survey of Business Owners.

Unauthorized immigrants in Iowa paid $73.6 million in state and local taxes in 2010, according
to data from the Institute for Taxation and Economic Policy, which includes:



$16.4 million in state income taxes.
$3.6 million in property taxes.
$53.6 million in sales taxes

Iowa employers and unauthorized workers paid between $50.3 million and $77.8 million in
Social Security and Medicare taxes to the federal government in 2007— benefits these workers
will never collect.

If all unauthorized immigrants were removed from Iowa, the state would lose $1.4 billion in
economic activity, $613.4 million in gross state product, and approximately 8,819 jobs, even
accounting for adequate market adjustment time, according to a report by the Perryman Group.
Arizona provides the clearest test case for state employer sanctions proposals. LAWA has been costly for
Arizona. It has not stopped unauthorized work but has simply grown the size of the cash-based,
underground economy. In 2008, the first year LAWA was in effect, income tax collection dropped
13% from the year before.16
2. Mandatory E-Verify is costly, particularly for small businesses.
To comply with HF 2156, individual employers – even self-employed persons – will need to dedicate
staff to understand the requirements of the proposed law and implement E-Verify. These employers may
need to make upgrades in hardware or software in order to access E-Verify. Additionally, although the EVerify program does not charge fees to participate, contractors and subcontractors are required to
15
Immigration Policy Center, ―New Americans in Iowa‖ (January 2012) http://www.immigrationpolicy.org/just-facts/newamericans-iowa
16
National Immigration Law Center, ―Costly and Ineffective: What Arizona’s Experience with Mandatory E-Verify Teaches
Us,‖ May 2011 http://www.nilc.org/costsev.html (citing Daniel Gonzalez, ―Illegal Workers Manage to Skirt Ariz. EmployerSanctions Law,‖ The Arizona Republic, Nov. 30, 2008,
www.azcentral.com/news/articles/2008/11/30/20081130underground1127.html ).
6
establish secure procedures for using E-Verify. Program administrators and other users are required to
complete training and periodic refresher training courses on the use of E-Verify.
Small businesses, which create most of the nation’s new jobs, cannot afford to set up and use E-Verify,
especially at this time when the economy is fragile and sluggish. Unlike large companies, they lack
human resources departments to help their employees resolve E-verify errors.17 According to the
National Immigration Law Center, small businesses would face the biggest impact from mandatory EVerify laws. Nationally, data shows that if use of E-Verify had been mandatory in fiscal year 2010, it
would have cost small businesses $2.6 billion.18 In 2011, the Main Street Alliance, a national network of
small business owners, wrote to House Judiciary Committee Chairman Lamar Smith to oppose his
mandatory E-Verify proposal.19
3. Mandatory E-Verify without comprehensive federal immigration reform hits children and
families hardest.
One out of every 15 Iowans is Latino or Asian. In 2009, 88.1% of children in Asian families in Iowa
were U.S. citizens, as were 91.4% of children in Latino families. Hurting the ability of Iowa’s relatively
small population of undocumented workers to provide for themselves and their families will have huge
collateral consequences for lawful residents and U.S. citizens, and these consequences hit children
hardest.
If one of these parents is deported, the emotional and financial damage to the family members left behind
can be devastating. Economic insecurity and health insecurity are documented consequences of increased
enforcement of our currently broken federal immigration system. Parents in immigration detention often
face the loss of their parental rights while incarcerated, since they may not receive notice of court
proceedings, may not have adequate legal counsel,20 cannot comply with the terms of family reunification
plans mandated by the child welfare system, and are often not even told where their children are.21
Children of undocumented immigrants suffer terribly as a result of the enforcement of our currently
broken immigration laws. The Urban Institute has shown that ―Parent-child separations pose serious risks
to children’s immediate safety, economic security, well-being, and longer term development.‖22 The
report continues:
17
National Immigration Law Center, ―E-Verify Creates Burdens for Small Businesses‖ (June 2011)
http://www.immigrationworksusa.org/uploaded/file/E-Verify%20burdens%20small%20business.pdf
18
Statement of Tyler Moran, Policy Director, National Immigration Law Center, House Committee on the Judiciary,
Subcommittee on Immigration Policy and Enforcement, Hearing on: "E-Verify- Preserving Jobs for American Workers,"
February 10, 2011, pp. 3-4 http://www.nilc.org/testimony-eevs.html.
19
http://mainstreetalliance.org/wp-content/uploads/2011/09/MSA-letter-to-House-Judiciary-Committee-on-HR-2885-Sept-142011.pdf
20
National Immigrant Justice Center, Isolated in Detention: Limited Access to Legal Counsel in Immigration Detention Facilities
Jeopardizes a Fair Day in Court (September 2010): 8-10. The report found that several factors contributed to inadequate counsel
for those in immigration detention including the geographic isolation of many detention facilities, inadequate phone access, and
inadequate legal aid resources.
21
Women’s Refugee Commission, Torn Apart by Immigration Enforcement: Parental Rights and Immigration Detention [―WRC
Report‖] (December 2010): 1 http://www.womensrefugeecommission.org/programs/detention/parental-rights.
22
The Urban Institute, Children in the Aftermath of Immigration Enforcement (February 2010).
http://www.urban.org/UploadedPDF/412020_FacingOurFuture_final.pdf
7
Most families in our sample lost a working parent, because they were detained, deported, or released but
not allowed to work. Following job loss, households experienced steep declines in income and hardships
such as housing instability and food insufficiency. Many families experienced prolonged hardship in part
due to extended efforts to contest deportation that took months and often more than a year to adjudicate.23
4. E-Verify has significant error rates that will cause Americans to lose their jobs.
Errors generated by the E-Verify program result in citizens and others who are legally authorized to
work in this country being wrongfully denied jobs.24 Many of the errors are due to problems of data entry
that occur more often for individuals with ethnic surnames – particularly for those of Hispanic and Arab
origin, the Government Accountability Office has reported – and for individuals who have changed their
names after being married and/or divorced. ―According to USCIS, of 22,512 TNCs [Temporary NonConfirmation of employment eligibility] resulting from name mismatches in fiscal year 2009,
approximately 76 percent, or 17,098, were for citizens.‖25 This number will get much bigger if E-Verify
is made mandatory.
Here are some examples, raised with Congress in April 2011 by the National Immigration Law Center:
“A U.S. citizen born in Florida was hired for a good-paying telecommunications position in October
2010. After hire, she was run through E-Verify and received a TNC. Her employer did not … explain any
of her rights. The worker went to her local SSA office twice to try and resolve the situation, but despite
SSA telling her that her information had been updated, the employer told her that she was still not
confirmed. She ultimately received an FNC [Final Non-Confirmation] and was fired. After her
termination, she has gone to great lengths to try and correct this error, but has been unable to do so….”26
“A U.S. citizen applied for a position with a temporary agency in California, only to be turned away
because E-Verify was unable to confirm her work authorization. The employer did not advise her of her
right to contest the finding and violated the law by asking her to show additional documents. She was
unemployed for over four months without health insurance and was diagnosed with a serious illness
during that time.”27
The other troubling error rate is that 54% of the time, E-Verify failed to catch unauthorized workers
entered into the system, according to a report from the U.S. Citizenship and Immigration Service
(USCIS).28 Thus, E-Verify is not an effective tool to curb unauthorized work.
5. The federal government currently does a poor job of monitoring employer fraud.
23
Ibid. at vii-viv.
Written Statement of Tyler Moran, Policy Director, National Immigration Law Center, House Committee on Ways and Means,
Subcommittee on Social Security Hearing on ―The Social Security Administration’s Role in Verifying Employment Eligibility,‖
April 14, 2011, pp.1-2 [Moran, April Hearing Testimony] http://www.nilc.org/testimony-eevs.html.
25
United States Government Accountability Office, ―Employment Verification: Federal Agencies Have Taken Steps to Improve
E-Verify, but Significant Challenges Remain,‖ December 2010, p. 19.
26
Moran, April Hearing Testimony, p. 2 http://www.nilc.org/testimony-eevs.html (citing Jessica St. Fleur, Written Statement for
the House Committee on the Judiciary, Subcommittee on Immigration Policy and Enforcement: Hearing on E-Verify –
Preserving Jobs for American Workers, Feb. 10, 2011).
27
Ibid. (citing summary of charge filed with the Dept. of Justice Office of Special Counsel for Immigration-Related Unfair
Employment Practices in 2008).
28
Center for American Progress, ―10 Numbers You Need to Know About E-Verify,‖ September 2011,
http://www.americanprogress.org/issues/2011/09/everify_numbers.html.
24
8
There are many ways in which an unscrupulous employer might illegally use E-Verify. For example, he
might prescreen job applicants based on racially and culturally discriminatory criteria. He might
selectively re-verify the employment eligibility of existing employees.
He might refuse to notify
employees of their TNCs or fail to provide the necessary referral letters to enable them to contest the
decision. He might even use threats of deportation as a weapon to coerce work as leverage in labor
negotiations.29 USCIS, which administers the E-Verify program, admits that its ability to root out
employer fraud is limited. ―Right now, frankly, it’s a little clumsy,‖ Theresa C. Bertucci, Associate
Director for the Enterprise Services Directorate of USCIS, recently conceded regarding her office’s
ability to monitor compliance by employers who are currently registered with the E-Verify program.30
6. This bill will increase fear and distrust in immigrant communities.
This law turns neighbors into immigration agents. This will significantly increase fear and distrust in
immigrant communities in the state, and make it harder for police to do their job. HF 2156 further wastes
limited AG and court resources by requiring them to track down the validity of these complaints that can
be made by anyone, anytime.
This document was prepared in February 2012 by CLINIC’s State & Local Advocacy Attorney, Karen
Siciliano Lucas. This document is for informational purposes only and is not intended as legal advice.
For questions, please contact Karen at [email protected] or (202)635-7410.
29
Ibid.; see also National Immigration Law Center, ―Facts About E-Verify,‖ January 2011. http://www.nilc.org/everifyinfo.html.
Federal law mandates that employers only use E-Verify after hiring an individual, that employers may only use it for new hires,
and that employers must use it for all new hires so as to avoid discrimination. Ibid.
30
Oral Testimony of Theresa Bertucci, Associate Director, USCIS, at Judiciary Subcommittee on Immigration Policy and
Enforcement, Hearing on: "E-Verify- Preserving Jobs for American Workers," February 10, 2011
http://judiciary.house.gov/hearings/hear_02102011.html.
9