oversight

Illegal Aliens: Significant Obstacles to Reducing Unauthorized Alien Employment Exist

Published by the Government Accountability Office on 1999-04-02.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                United States General Accounting Office

GAO             Report to Congressional Committees




April 1999
                ILLEGAL ALIENS
                Significant Obstacles
                to Reducing
                Unauthorized Alien
                Employment Exist




GAO/GGD-99-33
GAO   United States
      General Accounting Office
      Washington, D.C. 20548

      General Government Division



      B-278845

      April 2, 1999

      The Honorable Orrin G. Hatch
      Chairman
      The Honorable Patrick J. Leahy
      Ranking Minority Member
      Committee on the Judiciary
      United States Senate

      The Honorable Henry J. Hyde
      Chairman
      The Honorable John Conyers, Jr.
      Ranking Minority Member
      Committee on the Judiciary
      House of Representatives

      One of the primary magnets attracting illegal aliens to the United States is
      jobs. Even among those who enter the United States legally (e.g., as
      tourists or students), many are believed to overstay their visas and take
      jobs. The Department of Justice’s Immigration and Naturalization Service
      (INS) estimated that about 5 million illegal aliens resided in the United
      States in October 1996, and that their numbers increased at an average rate
      of about 275,000 per year between October 1992 and October 1996. Many
      immigration experts have said that as long as opportunities for
      employment exist, the incentive to enter the United States illegally or
      overstay visas will persist and efforts at the U.S. borders to prevent illegal
      entry will be undermined. Therefore, these experts believe that reducing
      the magnet of employment should be an integral part of a comprehensive
      strategy to reduce illegal immigration.

      This is our second of six planned reports on the Attorney General’s
      strategy to deter illegal entry into the United States. These reports are
      mandated by the Illegal Immigration Reform and Immigrant Responsibility
                                                                       1
      Act of 1996 (1996 Act), Public Law 104-208. In our first report, we
      discussed the Attorney General’s strategy to deter illegal entry along the
      southwest border. As agreed with your committees, this second report
      reviews the strategy’s objective related to enforcing workplace
      immigration laws. Specifically, this report addresses the following: (1) the
      effectiveness of the current employment verification process in preventing


      1
       Illegal Immigration: Southwest Border Strategy Results Inconclusive; More Evaluation Needed
      (GAO/GGD-98-21, Dec. 11, 1997).




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                                                                             2
                   employers from hiring unauthorized aliens, (2) INS’ efforts to improve the
                   employment verification process, (3) the level of effort INS and the
                   Department of Labor devoted to worksite enforcement activities and the
                   results of these activities, and (4) changes being made to INS’ worksite
                   enforcement program.

                   More than 12 years after the Immigration Reform and Control Act (IRCA)
Results in Brief            3
                   of 1986 created an employment verification process intended to prevent
                   employers from hiring unauthorized aliens, significant numbers of
                   unauthorized aliens can still obtain employment. The effectiveness of the
                   current verification process, which relies on identity and employment
                   eligibility documents that employees are to show employers, can be
                   undermined by unauthorized aliens using fraudulent documents.
                   Fraudulent documents, which can often appear genuine, are widely
                   available and widely used by unauthorized aliens to obtain employment.

                   INS has undertaken several initiatives to improve the employment
                   verification process to make it less susceptible to fraud, but significant
                   obstacles remain. First, as mandated in the 1996 Act, INS is testing or
                   expects to test three pilot programs in which employers electronically
                   verify an employee’s eligibility to work. However, employer participation
                   in the pilot programs under way has been significantly less than INS
                   anticipated. Other federal and state agencies that have contact with
                   potential participants generally have not had a role in informing them
                   about INS’ pilot programs. According to INS, Labor, and Social Security
                   Administration (SSA) officials, some employers believe that pilot
                   participation could place them at a disadvantage, relative to
                   nonparticipating competitors, in a tight labor market.

                   Second, INS has made little progress toward its goal of reducing the
                   number of documents that employers can accept to determine
                   employment eligibility. In February 1998, INS issued proposed regulations
                   to reduce the number of documents that can be used from 27 to 14.
                   However, INS received numerous comments on the proposed regulations
                   and INS officials do not know when these regulations will be finalized.
                   Lastly, INS has begun issuing new documents with increased security
                   features, which INS hopes will make it easier for employers to verify the
                   documents’ authenticity. However, aliens are statutorily permitted to show

                   2
                    We use the term “unauthorized aliens” to refer to aliens who do not have permission from INS to work
                   in the United States but who are working, regardless of whether they entered legally or illegally.
                   Unauthorized aliens in the United States are subject to removal from the country by INS.
                   3
                       P.L. 99-603, 8 U.S.C. 1324a et seq.




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employers various documents other than the INS documents that authorize
aliens to work, and other widely used documents (e.g., Social Security
cards and birth certificates) do not have the security features of the INS
documents.

Since 1994, INS has devoted about 2 percent of its enforcement workyears
to its worksite enforcement program, which is designed to detect
noncompliance with IRCA. In 1998, INS completed about 6,500
investigations of employers, which equated to about 3 percent of the
country’s estimated number of employers of unauthorized aliens. Labor
has provided limited assistance to INS in identifying employers suspected
of hiring unauthorized workers, and, under a new agreement with INS,
Labor’s role in this area will be reduced. Labor believes that delving into
immigration-related worksite enforcement matters, such as the
immigration status of workers, could hamper its own mission of enforcing
workplace standards by limiting workers’ willingness to report possible
violations to Labor.

The results of INS’ worksite enforcement program indicate it has
infrequently imposed sanctions on employers. Although a major goal of the
program was to target for investigation employers who knowingly violated
the law, more than 8 out of 10 investigations completed during the period
we reviewed did not result in a penalty. INS officials attributed these
modest results to various factors. They stated that the widespread use of
fraudulent documents made it difficult for INS to prove that an employer
knowingly hired an unauthorized alien. In addition, they stated that INS’
requirement that district worksite programs meet various numerical goals,
such as identifying a certain number of unauthorized aliens, may have
placed an undue focus on arresting unauthorized aliens and may have
undermined INS’ overall goal to target employers suspected of being major
violators.

INS is in the process of changing its approach to worksite enforcement.
The Service has developed an interior enforcement strategy with five
strategic priorities. Two of the priorities involve worksite enforcement,
with one calling for INS to pursue the criminal investigation of employers
who are flagrant or grave violators. However, the strategy does not define
“flagrant or grave violation.” According to an INS official, as of March 1999,
INS was still developing implementation plans for the five strategic
priorities. Since INS is just beginning this new approach, it is too soon to
know how the proposed changes will be implemented or to assess their
impact on the employment of unauthorized workers.




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             We have made recommendations to the Commissioner of INS for
             addressing certain issues identified during our review.

             IRCA made it illegal for employers knowingly to hire or continue to
Background   employ or recruit or refer for a fee unauthorized aliens. IRCA required
             employers to comply with an employment verification process intended to
             provide employers with a means to avoid hiring unauthorized aliens.
             Generally, IRCA requires employers to verify the identity and eligibility of
             all new employees hired after November 6, 1986.

             Under IRCA, employers must request newly hired employees to present a
             document or documents that establish their identity and eligibility to work.
             As of February 1999, INS rules allowed employees to present 27 different
             documents—8 that establish both identity and eligibility to work (e.g., a
             U.S. passport or INS permanent resident card, which is also called a “green
             card”); 12 that establish identity (e.g., a driver’s license); and 7 that
             establish eligibility to work (e.g., a Social Security card, other than one
             containing the following legend: “Not Valid for Employment”). The
             employment verification process that INS established pursuant to IRCA
             requires employers to complete the Employment Eligibility Verification
             Form, INS Form I-9, certifying that they have reviewed the documents and
                                                                                   4
             that the documents appear genuine and relate to the individual. In making
             their certifications, employers are expected to judge whether the
                                                                                5
             documents presented are obviously counterfeit or fraudulent. Unless INS
             has evidence that the employer knew the employee was unauthorized to
             work, employers are deemed in compliance with the law if they have
             followed the verification procedures, even though an unauthorized alien
             may have presented fraudulent documents that appeared genuine.

             IRCA provides penalties or sanctions against employers who violate the
             law. Employers who fail to properly complete, retain, or present for
             inspection a Form I-9 may face civil fines ranging from $100 to $1,000 for
             each employee for whom the form was not completed, retained, or
             presented. Employers who knowingly hire or continue to employ
             unauthorized aliens may be fined from $250 to $10,000, depending upon
             whether the violation is a first or subsequent offense. Employers who
             engage in a pattern or practice of knowingly hiring or continuing to employ

             4
                 Appendix I contains a copy of the Form I-9 and a complete list of the 27 acceptable documents.
             5
              We use the term “fraudulent” throughout this report to refer to situations in which unauthorized aliens
             illegally used documents for the purposes of obtaining employment. For our purposes, fraudulent
             documents include documents that were illegally manufactured as well as genuine documents used
             illegally (e.g., an unauthorized alien using another person’s valid document).




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                          unauthorized aliens are subject to criminal penalties consisting of fines up
                          to $3,000 per employee and/or up to 6-months imprisonment.

                          During the legislative debate on IRCA, concerns were expressed that
                          employers fearing sanctions would not hire “foreign-looking or foreign-
                          sounding” citizens and aliens authorized to work. As a result, IRCA
                          prohibits employers with four or more employees from discriminating
                          against any authorized worker on the basis of citizenship or national
                          origin. IRCA established Justice’s Office of Special Counsel for
                          Immigration-Related Unfair Employment Practices (OSC) to investigate
                                                             6
                          certain charges of discrimination.

                          INS has a worksite enforcement program that is responsible for checking
                          employer compliance with IRCA’s verification requirements and enforcing
                          IRCA’s employer sanctions provisions. Labor has agreed to assist INS by
                          checking employer compliance with verification requirements in the
                          course of some of its own employer investigations.
                                                                                                                           7
Findings From Our March   In March 1990, we issued our third and final report required by IRCA. In
                          that report, we concluded that, on the basis of our analysis of INS
1990 Study of IRCA’s      apprehension data and research by other organizations, employer
Employment-Related        sanctions had slowed illegal immigration. However, we also concluded
Provisions                that the prevalence of counterfeit and fraudulent documents was
                          threatening the security of IRCA’s employment verification process for
                          prohibiting unauthorized alien employment. As a result, unauthorized
                          aliens’ use of fraudulent documents was undermining IRCA’s employment
                          verification process and improvements were needed. On the basis of
                          responses from about 4,400 employers who responded to our survey, we
                          also concluded that, while about 65 percent of employers were complying
                          with the Form I-9 verification requirements, most employers wanted a
                          simpler or better verification system. A majority of the employers we
                          surveyed indicated that the federal government should consider such

                          6
                           OSC is responsible for investigating charges of citizenship status discrimination against employers
                          with 4 or more employees and national origin discrimination by employers with 4 to 14 employees.
                          Title VII of the Civil Rights Act of 1964 and the remedies against discrimination it provides remain in
                          effect. Title VII prohibits discrimination against anyone on the basis of national origin in hiring,
                          discharging, recruiting, assigning, compensating, and other terms and conditions of employment.
                          Charges of national origin discrimination against employers with 15 or more employees are generally
                          filed with the Equal Employment Opportunity Commission.
                          7
                           IRCA required us to issue three studies on IRCA’s implementation. In response, we issued the
                          following reports: Immigration Reform: Status of Implementing Employer Sanctions After One Year
                          (GAO/GGD-88-14, Nov. 5, 1987); Immigration Reform: Status of Implementing Employer Sanctions
                          After Second Year (GAO/GGD-89-16, Nov. 15, 1988); and Immigration Reform: Employer Sanctions and
                          the Question of Discrimination (GAO/GGD-90-62, Mar. 29, 1990).




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                               things as reducing the number of work authorization documents INS
                               issued and establishing systems for employers to contact INS and SSA to
                               verify INS documents and Social Security numbers (SSN).

                               We also concluded that there was widespread discrimination against
                               eligible workers as a result of IRCA. We stated that many employers
                               appeared confused over the variety of documents that could be used to
                               verify employment and uncertain about how to comply with IRCA’s
                               verification system. For example, some employers did not accept valid
                               work authorization documents, and some employers said they only asked
                               alien employees, rather than all employees, to show documents. Noting
                               that this uncertainty and confusion as well as the prevalence of fraudulent
                               documents may have caused the widespread pattern of discrimination, we
                               concluded that a simpler system that relied on the use of fewer documents
                               could reduce discrimination.

Illegal Alien Employment Is    No one knows exactly how many unauthorized aliens are illegally
                               employed in the United States or what percentage of the total workforce
a Small Portion of the Total   they represent. According to the Bureau of Labor Statistics, about 132
Workforce, but Is              million people were employed in the civilian labor force as of October
Significant in Certain         1998. Even if all of the estimated 5 million illegal aliens residing in the
Industries                     United States as of October 1996 held jobs in October 1998, they would
                               have represented less than 4 percent of the nation’s workforce. The results
                               from INS’ inspection of a random sample of the nation’s 6.5 million
                               employers in fiscal year 1997 indicated that about 195,000 employers (or
                               about 3 percent) had employed unauthorized aliens.

                               Illegal alien employment has been shown to be more significant in certain
                               industries and locations. For example, Labor’s National Agricultural
                               Workers Survey estimated that 37 percent of the agricultural workers in
                               1995 were illegal. There is also evidence that the meatpacking,
                               construction, and garment industries have employed large numbers of
                               unauthorized aliens. For example, in February 1998, we reported that in
                               1996 and 1997, INS found that about 23 percent of the workers at seven
                                                                                                      8
                               Nebraska and Iowa meatpacking plants had questionable documents. INS’
                               inspection of 89 construction businesses in Las Vegas, NV, starting in
                               March 1995 found that 39 percent of the approximately 6,000 employees
                               for whom a Form I-9 was completed appeared to be unauthorized to work.
                               Similarly, inspections of 74 Los Angeles area garment contractors in March


                               8
                               Community Development: Changes in Nebraska’s and Iowa’s Counties With Large Meatpacking Plant
                               Workforces (GAO/RCED-98-62, Feb. 27, 1998).




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                           1998 revealed that 41 percent of the 7,100 employees at these worksites
                           were unauthorized to work.

INS Worksite Enforcement   INS Investigations is responsible for enforcing IRCA’s employer sanctions
                           provisions. Investigations receives information, referred to as leads, from a
Program                    variety of sources, including the public and other federal or state agencies,
                           regarding unauthorized alien employment. Worksite enforcement unit
                           supervisors are to systematically analyze these leads and, as a first priority,
                           open investigations on employers suspected of knowingly hiring
                           unauthorized aliens and/or suspected of engaging in abusive employment
                           practices.

                           To track employer sanctions case activity, Investigations field personnel
                           are to prepare Employer Case Activity Reports documenting such case
                           activities as the opening of a case, a Form I-9 inspection, or the arrest of
                           unauthorized aliens. Data from these reports are to be entered into INS’
                           Employer Case Activity database. For ease of presentation, we refer to this
                           database as the Employer Sanctions database throughout this report. The
                           database contains case-specific information submitted by local INS offices
                           since August 1989. As of May 1998, the system contained data on over
                           69,000 employer sanctions cases.

                           In May 1998, INS issued a directive regarding worksite enforcement
                           operations. According to the Executive Associate Commissioner for Field
                           Operations, the directive was intended to provide consistency among INS
                           districts in conducting worksite operations. Under the directive, all
                           investigations in which INS believes an employer is unknowingly hiring
                           unauthorized aliens must start with a review of Form I-9 and other
                           employment records. INS is then to hold a seminar for these employers to
                           educate them on such things as how to properly prepare the Form I-9 and
                           how to detect fraudulent documents. The employers are then to be given a
                           list of aliens INS believes are unauthorized to work. The employer must
                           either re-verify that the alien is authorized to work or dismiss the alien.
                           INS could then inform the employer that it intended to arrest any
                           unauthorized aliens. For investigations in which INS believes an employer
                           is knowingly hiring unauthorized aliens, INS is to arrest the unauthorized
                           aliens first, followed by a review of the Form I-9 and other employment
                           records. In addition, before an enforcement action can be conducted at an
                           employer’s place of business, INS worksite enforcement units must
                           prepare an operational plan to be approved by either the INS Regional
                           Director or the Executive Associate Commissioner for Field Operations.




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                         Before this directive, the decision of whether INS arrested unauthorized
                         aliens before or after a Form I-9 inspection was left to the discretion of the
                         INS district office. In addition, there was no requirement that INS hold
                         seminars for employers or that operational plans be approved by the
                         regional office or headquarters.

                         As agreed with your offices, this report addresses the following: (1) the
Objectives, Scope, and   effectiveness of the current employment verification process in preventing
Methodology              employers from hiring unauthorized aliens, (2) INS’ efforts to improve the
                         employment verification process, (3) the level of effort INS and Labor
                         devoted to worksite enforcement activities and the results of these
                         activities, and (4) changes being made to INS’ worksite enforcement
                         program.

                         To determine the effectiveness of the current employment verification
                         process, we reviewed previous reports by us and others, such as the
                         Commission on Immigration Reform and other immigration researchers. In
                         addition, we held discussions with INS, Labor, and SSA officials and
                         analyzed data from INS’ Employer Sanctions database to obtain INS
                         statistics on the use of fraudulent documents by unauthorized aliens.

                         To determine what actions INS had undertaken to improve the
                         employment verification process, we held discussions with and obtained
                         documents from INS, SSA, Labor, and OSC officials. Using a data
                         collection instrument, we surveyed worksite enforcement unit supervisors
                         representing 32 of INS’ 33 districts who attended a national worksite
                         enforcement conference in San Diego in June 1998. We also contacted
                         representatives of four national organizations representing business
                         owners or employee unions to discuss their views on INS’ efforts to
                         improve the employment verification process.

                         To determine the extent of INS’ activities in worksite enforcement and the
                         results of these activities, we analyzed INS budget data, workload data
                         from INS’ Employer Sanctions database, and responses provided by the 32
                         INS worksite enforcement unit supervisors who responded to our survey.
                         In addition to surveying these supervisors about their offices’ coordination
                         with Labor, we also surveyed Labor officials from 10 districts in states with
                         a high number of unauthorized aliens about their enforcement activities
                         and coordination with INS. We also analyzed Labor workload data to
                         determine the extent to which Labor referred cases to INS for
                         investigation, and we conducted structured telephone interviews with
                         state labor officials in six states to determine the extent to which they
                         coordinated their role with INS.



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                        To identify changes being made to INS’ worksite enforcement program, we
                        reviewed INS strategy documents, attended INS meetings in which INS
                        officials explained worksite enforcement program changes, and discussed
                        a draft of INS’ interior enforcement strategy with INS headquarters and
                        regional officials.

                        We discussed the strengths and limitations of INS’ automated workload
                        data with INS headquarters officials and with investigators at the local
                        level, but we did not independently verify the validity of the data. These
                        officials indicated that the data could be used to accurately portray trends
                        over time. See appendix II for a more complete description of our
                        objectives, scope, and methodology.

                        We did our work from December 1997 through March 1999 in accordance
                        with generally accepted government auditing standards. We requested
                        comments on a draft of this report from the Attorney General, Secretary of
                        Labor, and Commissioner of Social Security. Justice and SSA provided
                        written comments, which are summarized at the end of this letter. Justice’s
                        written comments are contained in appendix III. Labor did not provide
                        comments.

                        The employment verification process can be easily thwarted by fraud.
Fraudulent Documents    Large numbers of unauthorized aliens have either fraudulently used valid
Have Undermined the     documents that belong to others or presented counterfeit documents as
Effectiveness of INS’   evidence of employment eligibility. As a result, unauthorized aliens have
                        been able to circumvent the current employment verification process,
Employment              thereby making it difficult for employers who are willing to comply with
Verification Process    the law by hiring only authorized workers to do so.

                        Various studies have pointed out that fraudulent documents are largely
                        responsible for the ineffectiveness of the employment verification process.
                        For example, we reported in 1990 that the prevalence of fraudulent
                        documents threatened to undermine the employment verification process
                                                               9
                        and the system needed improvement. In its 1997 report to Congress, the
                        Commission on Immigration Reform reiterated its 1994 conclusion that the
                        single most important step that could be taken to reduce unlawful
                        migration was the development of a more effective system for verifying
                        work authorization. It noted that the widespread availability of fraudulent
                        documents makes it easy for unauthorized aliens to obtain jobs. Similarly,
                        INS has noted that the proliferation of inexpensive fraudulent documents


                        9
                            GAO/GGD-90-62.




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makes it almost impossible for employers to ensure employment to only
authorized workers.

Our analysis of INS data showed that large numbers of unauthorized aliens
have used fraudulent documents to obtain employment. Between October
1, 1996, and May 29, 1998, INS completed about 9,600 employer
investigations that were based on leads from various sources, such as the
public or other agencies. In about 3,500 investigations (or 36 percent) INS
reported that about 78,000 fraudulent documents pertaining to about
50,000 unauthorized aliens were used to obtain employment. In about 2,100
(or 60 percent) of the 3,500 investigations in which INS found fraudulent
documents, INS determined that the employer had complied with the
employment verification process and did not knowingly hire unauthorized
aliens, but that unauthorized aliens’ use of fraudulent documents
circumvented the process. In the other 1,400 (or 40 percent) of the 3,500
investigations involving fraudulent documents, INS decided to fine the
employer, take no action against the employer for various reasons (e.g.,
the employer went out of business), or issue the employer a warning
notice. Of the 78,000 fraudulent documents identified, about 60 percent
were INS documents, such as permanent resident cards; about 36 percent
were Social Security cards; and about 4 percent were other documents,
such as drivers’ licenses. These documents were either counterfeit
documents or genuine documents used fraudulently to obtain employment.

Large-scale counterfeiting of employment eligibility documents has
reportedly made such documents widely available. According to a January
1997 Justice Office of Inspector General (OIG) audit report, on the basis of
a review of 30 INS fraud cases in 5 INS district offices, INS confiscated
                                       10
nearly 300,000 counterfeit documents. Nearly all of these counterfeited
documents were confiscated in Los Angeles. In May 1998, INS seized more
than 24,000 counterfeit Social Security cards in Los Angeles after
undercover agents purchased 10,000 counterfeit INS permanent resident
cards from a counterfeit document ring. In November 1998, INS seized
more than 2 million counterfeit documents in Los Angeles, including INS
permanent resident cards, Social Security cards, and drivers’ licenses from
various states. According to INS, these counterfeit documents were
headed for distribution points around the country.



10
 Immigration and Naturalization Service Replacement of Resident Alien Identity Cards, U.S.
Department of Justice, Office of Inspector General, Audit Report 97-06, January 1997. The OIG selected
a judgmental sample from INS investigations that were conducted between 1990 and 1995 involving
major counterfeit document seizures in Atlanta, Chicago, Los Angeles, Miami, and New York.




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                            The 1996 Act mandated INS to test three pilot programs in which
INS Is Taking Steps to      employers use computer technology to verify employees’ eligibility to
Improve Verification        work. INS has one of the three pilot programs under way, but, reportedly,
Process, Yet                reluctance on the part of some employers to participate in the pilot has
                            made it difficult for INS to meet its enrollment goal. Also, in accordance
Considerable                with the 1996 Act, INS has removed some documents from the list of those
Obstacles Remain            that can be considered by employers, but this still leaves 27 acceptable
                            documents that employees can use for employment verification purposes.
                            To give employers confidence in the integrity of certain INS documents,
                            INS has begun issuing documents more resistant to tampering and
                            counterfeiting to lessen the potential of fraudulent document use.
                            However, opportunities still exist for unauthorized aliens to use fraudulent
                            documents because alien employees are statutorily permitted to present
                            documents other than INS-issued documents to demonstrate employment
                            eligibility, and these may have fewer security features.

INS Has Had Difficulty in   As mandated in the 1996 Act, INS is testing or expects to test three
                            programs to make it possible for employers to electronically verify an
Meeting Its Pilot Program   employee’s eligibility to work. The 1996 Act allows the pilots to last up to 4
Enrollment Goal             years; generally, employer participation in these pilot programs is
                            voluntary. Under the first pilot, called the Basic Pilot, the employer is to
                            verify the employment eligibility of all new hires, regardless of citizenship
                            status, by querying an SSA database containing the names of all individuals
                            with Social Security numbers. If the SSA database cannot confirm
                            employment eligibility and the employee indicated that he or she is not a
                            citizen or national of the United States, an employer would then query INS’
                            database containing the names of all of those individuals to whom INS has
                            issued alien numbers. Employers in the five states with the highest
                            estimated numbers of illegal aliens—California, New York, Texas, Florida,
                            and Illinois—are eligible to participate in the Basic Pilot. As of November
                            1998, 1,341 employers had signed up to participate in the Basic Pilot.

                            Under the second pilot, called the Citizen Attestation Pilot, employers are
                            to verify with the INS database only those newly hired employees who
                            claim to be aliens. The 1996 Act limits this pilot to states that meet specific
                            requirements for issuing drivers’ licenses and identity documents. INS
                            plans to test the Citizen Attestation Pilot in Arizona, Massachusetts,
                            Maryland, Michigan, and Virginia.

                            The third pilot, called the Machine-Readable Document Pilot, is to verify
                            all new employees who present a driver’s license or identification
                            document that contains a machine-readable SSN. INS plans to test the
                            Machine-Readable Document Pilot only in Iowa because it is the only state



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with a machine-readable SSN, name, and date of birth on its drivers’
licenses or identification cards.

Even before mandated to do so, INS was testing electronic verification. In
1995, INS began testing electronic verification systems similar to the Basic
and Citizen Attestation Pilots. As of November 1998, 1,178 employers
participated in these pre-1996 Act pilots.

INS’ original goal was to have 16,000 employers enrolled in all of its pilot
programs by the end of fiscal year 1999. However, INS has had difficulty in
meeting this enrollment goal. As of November 1998, INS had enrolled 2,519
employers, or about 16 percent of its goal. Some employers are reportedly
reluctant to participate in the pilots because of concern that participation
may have a negative economic impact on their businesses. According to
officials with whom we spoke from INS, Labor, and SSA, employers in
some industries believe that in the current tight labor market, they would
not have enough authorized workers applying for jobs if they participated
in a verification pilot. The employers reportedly fear that they could be put
at a competitive disadvantage because employees rejected by the
verification system might go to work for competitors who are not enrolled
in a pilot. In addition, according to INS officials, some employers are
reluctant to participate because (1) they do little hiring, (2) illegal alien
employment is not a problem in their industry, or (3) they fear
participating will bring additional INS scrutiny (e.g., a Form I-9
inspection). Also, INS believes some multistate employers that want to
consolidate verification operations to one location are reluctant to
participate because they cannot comply with the 1996 Act’s statutory
requirement that verification be completed within 3 days after an
employee is hired.

According to INS officials, INS’ failure to meet its enrollment goal was
affected primarily by employer reluctance to participate in the pilots and
not by the fact that two pilot programs have not yet been implemented. As
a result of its difficulty in recruiting participants for its Basic Pilot, INS has
adjusted its enrollment goal. INS plans to reduce its employer enrollment
goal for fiscal year 1999 from the original 16,000 to 5,000.

The 1996 Act required the Attorney General to widely publicize the pilot
programs and required INS district offices in which pilot programs are to
be implemented to assist those employers wishing to participate. INS’
Internet World Wide Web site has information about the pilots, and INS
officials told us they have presented information about the pilots at various
employer association meetings. In addition, according to these officials,



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                              each of the 12 INS districts in which the Basic Pilot is operating has an INS
                              liaison officer who is responsible for conducting outreach activities, such
                              as conducting employer seminars to explain the pilots. In responding to
                              our survey on how active their districts’ outreach efforts have been, 8 of
                              the 12 worksite unit supervisors indicated that the efforts have been
                              somewhat active, 2 indicated very active, and 2 indicated not active at all.

                              Other federal and state agencies, such as Labor and state labor agencies,
                              have contact with employers who might be interested in INS’ pilot
                              programs. These agencies did not have a formal role in informing
                              employers about INS’ pilot programs and generally said they did not do so.
                              For example, officials from 7 of the 10 Labor offices we contacted stated
                              that they did not inform employers about INS’ pilot programs. In addition,
                              neither the informational material for employers that OSC provided us nor
                              OSC’s Web site mentioned INS’ pilot programs. In addition, none of the
                              representatives from the six state labor agencies we contacted said their
                              agencies distributed information about INS’ pilot programs, although all of
                              the representatives said they would be willing to do so. Officials in charge
                              of INS’ pilot programs stated that INS has contracted with a public
                              relations firm to conduct more extended outreach about the pilot
                              programs. In December 1998, the contractor submitted the strategy for the
                              outreach campaign, which is set to begin in April 1999.

                              Although electronic verification could be an improvement over the current
                              verification process, it also has limitations. For example, an unauthorized
                              alien could use the documents of an authorized worker and thereby
                              circumvent the process. In May 1998, INS selected two contractors to
                              conduct an evaluation of the effectiveness of its pilot programs in
                              preventing unauthorized alien employment and ensuring authorized
                              workers do not encounter discrimination. According to INS’ Director of
                              Research, as of December 1998, the evaluation plan was under
                              development.

Little Progress in Reducing   Various studies of IRCA’s employment verification process have advocated
                              that the number of documents that employees can use to demonstrate
the Number of Acceptable      employment eligibility should be reduced to make the employment
Documents                     verification process more secure and to reduce employer confusion. For
                              example, in 1990, we reported that the multiplicity of documents
                              contributed to (1) employer confusion about how to comply with the
                              employment verification requirements and (2) discrimination against
                                                   11
                              authorized workers. INS first published a proposed rule to reduce the
                              11
                                   GAO/GGD-90-62.




                              Page 13                          GAO/GGD-99-33 Unauthorized Employment of Aliens
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number of documents that can be used to demonstrate employment
eligibility in 1993.

The 1996 Act mandated that four documents be eliminated from the
statutory list of acceptable documents that can be used to demonstrate
                        12
employment eligibility. However, the Attorney General retained her
authority to add documents to the list as specified in the statute under
certain circumstances. At the time of the 1996 Act’s enactment, 29
acceptable documents were designated by regulation.

In September 1997, INS issued an interim rule (1) eliminating four
documents from the list of documents that establish both identity and
employment eligibility, (2) redesignating one document that the 1996 Act
removed (using the Attorney General’s authority to designate additional
documents), and (3) limiting the use of another document. The interim rule
also added two new types of receipts that an individual can present in lieu
of an acceptable document from the list. According to INS, the purpose of
the interim rule was to maintain the status quo as much as possible until
INS completed a separate rulemaking proceeding that would make
comprehensive changes to the employment verification process, a further
reduction in the number of acceptable documents, and a revision to the
          13
Form I-9.

In February 1998, INS issued proposed regulations that would cut the
number of documents by half. The rule proposed maintaining the number
of documents that establish both identity and employment eligibility at 8,
and reducing the number of documents that establish (1) identity only,
from 12 to 3 documents, and (2) employment eligibility only, from 7 to 3
documents. According to an INS official, INS received about 70 comments
on the proposed regulations. Some of the comments have caused INS to
revisit several issues related to the documents INS planned to eliminate
from the list. According to this official, INS does not know when the
proposed regulations will be finalized. As of February 1999, employees

12
   The 1996 Act mandated the elimination of the Certificate of United States Citizenship, the Certificate
of Naturalization, an unexpired foreign passport with an endorsement that identifies employment
eligibility, and a birth certificate from the list of acceptable documents.
13
   In response to the 1996 Act, the interim rule eliminated the Certificate of United States Citizenship
and Certificate of Naturalization; restricted the use of an unexpired foreign passport; and, due to public
concerns, designated the use of a birth certificate until completion of a separate rulemaking procedure.
INS also eliminated two other documents, the Refugee Travel Document and the Re-entry Permit.
However, INS has made changes to the list since the previous regulations were issued. It designated a
new document that will eventually replace another document already on the list. The net effect of the
interim rule was to reduce the number of documents that established identity and employment
eligibility from 10 to 8 documents.




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                       could still use 27 different documents to demonstrate their authorization
                       to work.

Increasing Document    INS has taken steps to increase the integrity of the documents it issues to
                       reduce fraudulent document use and make it easier for employers to verify
Integrity              the authenticity of the cards they review. For example, in February 1997,
                       INS began issuing a new Employment Authorization Document containing
                       visible security features, such as a hologram. In April 1998, INS also began
                       issuing a new version of the card for lawful permanent resident aliens. In
                       addition to a hologram, the card contains other visible security features,
                       such as a digital photograph and fingerprint images.

                       However, there will still be ample opportunities for unauthorized aliens to
                       use fraudulent documents to obtain employment. INS plans to replace
                       previous versions of the permanent resident cards issued between 1989
                       and 1998 with the new version as these cards expire. It could take up to 10
                       years before all previous versions are replaced. Cards issued from 1977 to
                       1989 have no expiration date and will remain valid until INS replaces them.
                       This means that existing versions, which are more susceptible to
                       counterfeiting, could still be used fraudulently to obtain employment. Also,
                       statute allows alien employees to present various documents other than
                       the INS documents to demonstrate they are authorized to work in this
                       country. Therefore, unauthorized aliens seeking employment can
                       circumvent the improved security features of INS documents by simply
                       presenting non-INS documents—such as Social Security cards—to
                       employers. Documents such as the Social Security card do not contain
                       enhanced security features at the level of those contained in the new INS
                       cards, and, as previously noted, counterfeit Social Security cards were
                       reported to be widely available. Although SSA has developed several
                       prototype counterfeit-resistant cards as required by the 1996 Act,
                       according to an SSA official, SSA had no plans to replace the existing card
                       with one that contains enhanced security features.

                       Enforcing the employer sanctions provisions of IRCA will continue to be
INS and Labor          important because no verification system is foolproof, unauthorized aliens
Worksite Enforcement   can still use fraudulent documents to circumvent the employment
Efforts Have Been      verification process, and not all employers may want to comply with the
                       law. INS has devoted a relatively small percentage of its enforcement
Limited                resources to worksite enforcement. As a result, the number of employer
                       investigations INS has conducted yearly is only a fraction of the estimated
                       number of employers who may have hired unauthorized aliens. To
                       efficiently use its limited worksite enforcement resources, INS has
                       intended to target its investigative efforts on 15 industries with a history of



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                            using unauthorized labor. During a recent 20-month period, INS conducted
                            about 60 percent of its investigations in targeted industries and about 40
                            percent in nontargeted industries. Despite a formal agreement that was in
                            effect from June 1992 to November 1998 that sought to enhance
                            cooperation and coordination between Labor and INS, Labor provided
                            limited assistance and had rarely referred employers suspected of hiring
                            unauthorized aliens to INS. Labor is concerned that because most of its
                            investigations are based on employee complaints, actively assisting INS
                            with immigration-related worksite enforcement could reduce employees’
                            willingness to report employer workplace violations to Labor, thus
                            adversely affecting its ability to enforce labor standards. A new agreement
                            signed November 23, 1998, limited this assistance even further.

INS Assigned a Relatively   Relative to other enforcement programs in INS, worksite enforcement has
                            received a relatively small portion of INS’ staffing and enforcement budget.
Small Portion of Its        INS’ overall enforcement budget grew by about 130 percent between fiscal
Resources to Worksite       years 1994 and 1998, from about $1 billion to nearly $2.4 billion. However,
Enforcement                 INS’ Investigations budget, which includes worksite enforcement,
                            increased about 62 percent during this same period. Most of the increased
                            enforcement funding was directed at the southwest border, where a
                            buildup of about 4,000 border patrol personnel was intended to prevent
                            illegal alien entry.

                            From fiscal years 1994 to 1998, the amount of time that INS personnel
                            spent on all enforcement programs increased from about 12,000 workyears
                            to about 18,800, an increase of about 57 percent. During this same period,
                            the amount of time that INS personnel spent on worksite enforcement
                                                                                    14
                            increased about 28 percent, from 243 to 311 workyears. These increases
                            notwithstanding, INS consistently devoted about 2 percent of its
                            enforcement workyears to worksite enforcement during this period. (Fig. 1
                            shows the percentage of time that INS devoted to its enforcement
                            programs in fiscal year 1998.)




                            14
                             We could not determine a specific dollar amount spent on worksite enforcement activities because,
                            according to INS officials, INS does not track expenditures within the Investigations budget. INS uses
                            staff workyears reported through its Performance Analysis System to determine the level of effort
                            devoted to specific investigative activities. Worksite workyears include time spent by Investigations
                            agents only.




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Figure 1: INS Enforcement Program
Workyears for Fiscal Year 1998




                                    Note: For the major INS enforcement programs, fiscal year 1998 workyears are budget amounts.
                                    Actual workyear data for these programs were not available at the time of our review.
                                    a
                                     Includes actual time spent by INS agents and support staff on investigations that target employers
                                    who are suspected of hiring unauthorized workers.
                                    b
                                     Includes all other investigations (other than employers), such as criminal aliens, drug trafficking,
                                    fraud, smuggling, and immigration status violations.
                                    Source: GAO analysis of INS data.


                                    The number of employer investigations INS is able to conduct each year
                                    covers only a fraction of the estimated number of employers who may
                                    have unauthorized aliens. As previously noted, the results from INS’
                                    inspection of a random sample of the nation’s 6.5 million employers in
                                    fiscal year 1997 indicated that about 195,000 employers had employed
                                    unauthorized aliens. In fiscal year 1998, INS’ worksite investigators
                                                                                      15
                                    completed about 6,100 lead-driven investigations and about 400
                                                       16
                                    compliance audits for a total of about 6,500 investigations, which equated
                                    15
                                       These investigations were opened in response to a complaint by the public or a referral by another
                                    agency.
                                    16
                                       Each year from fiscal year 1989 through fiscal year 1998, INS headquarters selected for inspection a
                                    random sample of the nation’s employers to determine a nationwide employer compliance rate with




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                         to about 3 percent of the estimated number of employers of unauthorized
                         aliens.

                         According to worksite program officials, significantly increasing the
                         funding for and staff assigned to worksite investigations may not
                         significantly reduce unauthorized alien employment. Even with a two- or
                         three-fold increase in staffing levels, INS would still only be able to
                         investigate a small portion of the estimated number of employers who may
                         have unauthorized aliens and remove only a fraction of the estimated
                         number of unauthorized alien workers. According to these and other INS
                         officials, most employers want to comply with the law and not hire
                         unauthorized aliens. Therefore, the increased use of electronic verification
                         by those who may be unknowingly hiring unauthorized aliens would
                         permit INS to concentrate its limited enforcement staff on those who
                         knowingly violate the law.

                         To best use its limited worksite enforcement staff, INS’ priority has been to
                         target for investigation employers in specific industries, such as farming,
                         construction, apparel, hotels and motels, and eating and drinking places
                         that historically have had a high probability of violations. However, of the
                         approximately 11,000 cases opened between October 1996 and May 1998,
                         about 43 percent were opened in industries other than those targeted.
                         About 38 percent of the 11,000 cases were in 2 of the targeted industries,
                         eating and drinking places (about 31 percent) and hotels and motels (about
                         7 percent). According to INS’ worksite enforcement program officials,
                         despite their intent to target employers in certain industries, INS opened
                         most investigations on the basis of the leads it received, not by industry.

Labor’s Activities Are   The INS and Labor agreement that was in effect between June 1992 and
                         November 1998 called for the agencies to work together, but at the same
Limited to Reviewing     time, limited how far Labor would go in cooperating and coordinating with
Employers’ Compliance    INS. As a result, Labor had provided little assistance to INS in identifying
With Paperwork           employers suspected of hiring unauthorized workers. A new agreement
Requirements             signed on November 23, 1998, limits Labor assistance even further.

                         In June 1992, officials from INS and Labor’s Employment Standards
                         Administration signed a memorandum of understanding that was intended
                         to, among other things, foster cooperation and coordination between INS

                         IRCA’s employment verification provisions. INS discontinued this annual program, called the General
                         Administrative Plan, beginning with fiscal year 1999, to make what it considers more efficient use of its
                         limited enforcement resources. We used the fiscal year 1997 compliance results to determine the
                         estimated number of employers who may have unauthorized aliens because complete fiscal year 1998
                         data were not available at the time of our review.




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and Labor, clarify the enforcement role of each agency, and ensure more
efficient use of resources. The memorandum called for the cross training
of staff, sharing of automated information, and conducting of joint
activities when appropriate. Labor was to review employer compliance
with the employment verification requirements during the course of its
own investigations. Since Labor visited many more worksites in
connection with its own mission than INS resources would permit, Labor’s
inspections were to bolster INS’ coverage of worksites.

In the memorandum, Labor agreed to make prompt referrals to INS of
employers suspected by Labor to have knowingly hired unauthorized
aliens. However, the memorandum also stated that Labor “will take no
action which will compromise its ability to carry out its fundamental
mission, regardless of the workers’ immigration status” (underlining
added). Labor officials told us that they have interpreted this to mean that
if Labor investigators delve into worksite immigration matters, beyond
reviewing Form I-9s, it could have a detrimental effect on Labor’s primary
mission of enforcing worker protection laws. A Labor official told us that
about 70 percent of Labor’s investigations are based on worker complaints.
Labor initiates the other 30 percent of its investigations. If employees
perceived that Labor investigators were trying to determine their
immigration status and possibly report those who may be unauthorized to
INS, it would have a “chilling effect” on employees’ willingness to report
workplace violations.

Labor’s concern with preserving the integrity of its mission-related
investigations has prevented Labor investigators from carrying out all of
the provisions of the memorandum with INS. For example, although the
agreement calls for Labor to “make prompt referrals of employers
suspected of knowingly hiring unauthorized aliens,” Labor field officials
told us that they do not conduct any investigative activities to determine
whether employees may be unauthorized. The Labor Field Operation
Handbook states that the role of Labor investigators does “not include
investigating beyond the records (e.g., interviewing employees for I-9
purposes).” Instead, Labor’s assistance to INS has primarily been in the
form of reviewing employers’ Form I-9 paperwork and providing the
results to INS. Even in this area, Labor has decreased its activity, although
not because of any conflict in mission. The percentage of inspections in
which Labor investigators did not determine whether employers were in
compliance with Form I-9 paperwork requirements increased from 13
percent of Labor inspections in fiscal year 1990 to 26 percent in fiscal year
1998. According to Labor officials, the increase has been due, in part, to
the shortened time that investigators spend at worksites. In many cases,



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these officials stated, investigators complete their inspections and leave
worksites within 3 days. Since regulations require that employers be given
3 days’ advance notice before their Form I-9s will be reviewed, Labor
investigators are frequently gone from worksites by the time employers are
required to make their Form I-9s available for review.

Labor has referred few employers suspected of hiring unauthorized
workers to INS. Of the over 367,000 employer Form I-9 reviews that Labor
conducted between fiscal years 1988 and 1998, Labor data showed it
referred to INS 236 employers it suspected of having unauthorized aliens.
Further, according to Labor and INS field officials, the agencies have
undertaken few cooperative efforts, such as cross training, sharing data, or
conducting joint investigations.

On November 23, 1998, the INS Commissioner and Labor’s Assistant
Secretary, Employment Standards Administration, signed a new
Memorandum of Understanding. Similar to the 1992 agreement, the
purpose of the new agreement is to foster appropriate cooperation and
coordination between INS and Labor. In addition, the agreement is
intended to enhance worksite enforcement of employer sanctions and
labor standards to reduce the employment of unauthorized workers in the
United States. According to the agreement, unauthorized workers’
willingness to accept substandard wages and working conditions provides
opportunities for some employers to hire unauthorized aliens. INS and
Labor officials told us and the agreement suggests that unauthorized aliens
are a source of “cheap labor,” and that their employment leads to the
degradation of overall workplace conditions.

Under this agreement, however, Labor will significantly reduce its reviews
of employer compliance with IRCA’s employment verification procedures.
Labor will no longer review employer compliance with the employment
verification procedures in investigations stemming from complaints, which
account for about 70 percent of all Labor investigations. Labor will only
review employer compliance in noncomplaint-driven investigations. The
agreement calls for Labor to refer to INS all suspected serious violations,
such as the use of fraudulent documents to obtain employment or
employers’ knowingly hiring unauthorized aliens, but only in
noncomplaint-driven investigations.

The agreement is intended to avoid discouraging unauthorized workers
from complaining about labor standards violations out of fear of the
possible consequences, such as apprehension and possible removal by
INS. According to Labor officials, there is a misperception among the



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                        immigrant working community, actively promoted by those who do not
                        want employees to cooperate with Labor, that cooperating with Labor will
                        automatically result in an INS inspection. As a result, according to these
                        officials, Labor investigators have had increasing difficulty in getting
                        employees to cooperate with them. The new agreement is meant to correct
                        this misperception so those workers understand that Labor will not report
                        the results of any of its complaint-driven investigations to INS. Labor
                        officials told us that they hoped the new agreement would result in more
                        employee cooperation, thereby enabling Labor to better enforce workplace
                        labor standards. INS worksite program officials told us that they believe
                        the new agreement may create more barriers to enforcing employer
                        sanctions and reducing unauthorized alien employment. For example, the
                        agreement does not require Labor to refer to INS any serious violations
                        Labor investigators may encounter during investigations that are based
                        upon complaints.

                        In contrast to this new agreement, the U.S. Commission on Immigration
                        Reform has advocated that Labor take a more active role in employer
                        sanctions enforcement. In its 1997 report, the Commission stated that
                        Labor’s participation in verifying that only authorized workers are hired
                        should be seen as integral to its mission of protecting U.S. workers. It
                        recommended that Labor be responsible for verifying employer
                        compliance with the employment verification requirements.

                        The results from INS’ worksite enforcement program have been modest.
INS Worksite            Although a major INS goal was to investigate employers that it believed
Investigation Efforts   intentionally hired illegal workers and were “major violators” and/or
Produced Modest         abusive employers, 83 percent of the INS lead-driven workplace
                        investigations resulted in no employer sanctions. Our examination of
Results                 about 800 closed cases with the most complete data available, revealed
                        that INS had collected about $2.5 million, or about one-half of the $4.9
                        million that employers had been ordered to pay.

                        Overall, INS arrested about 27,500 unauthorized workers during the course
                        of its worksite investigations, including about 12,700 at the worksites of
                        employers found to be in compliance with the Form I-9 requirements.
                        Because of INS data limitations, we could not determine how many of
                        these aliens were subsequently released, how many were placed into
                        deportation hearings, and how many were removed from the country.
                        However, INS said that in light of limited detention capacity, the 1996 Act’s
                        requirement that INS detain virtually all criminal aliens gives INS less
                        flexibility to detain noncriminals.




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Worksite Program in          The Government Performance and Results Act, Public Law 103-62, requires
                             agencies to prepare strategic plans and yearly program performance goals.
Relation to the Government   One of the goals in Justice’s September 1997 Strategic Plan was to reduce
Performance and Results      the incentives for unauthorized employment by (1) focusing enforcement
Act                          efforts in areas that have a high probability of violation and (2) facilitating
                             the replacement of unauthorized workers with legal workers.

                             In line with these strategic goals, INS established a goal that its worksite
                             program would investigate employers who intentionally hired
                             unauthorized aliens, that is, substantive violators. To measure its
                             effectiveness in meeting this goal, INS set a goal that 60 percent of all fines
                             should be for substantive violations, and that 146 criminal cases would be
                             presented for prosecution. Further, INS’ worksite program was to serve as
                             a catalyst for lawful employment by causing as many as 38,507 jobs to be
                             vacated by unauthorized aliens and, therefore, made available for
                             authorized workers. This figure was to be calculated by adding the number
                             of unauthorized aliens INS arrested to the number that left their job due to
                             an INS enforcement action.

INS Proposed to Fine a       INS’ priority in the worksite enforcement area has been to investigate
                             employers who intentionally hire illegal workers, including prosecuting
Small Portion of             some employers for criminal violations. However, over a recent 20-month
Investigated Employers       period, INS found IRCA violations and proposed to fine employers in less
                             than 20 percent of the investigations it completed. According to the most
                             recent nationwide data available from INS’ Employer Sanctions database,
                                                                              17
                             about 9,600 lead-driven employer investigations were completed between
                                                                18
                             October 1, 1996, and May 29, 1998. Of these investigations, 17 percent
                             were served with a Notice of Intent to Fine (NIF) for IRCA violations.

                             About one-half of the fines proposed by INS were for paperwork violations
                             (i.e., for failing to complete or improperly completing Form I-9s), and one-
                             half were for substantive violations (i.e., knowingly hiring or continuing to
                                                             19
                             employ unauthorized aliens). In addition, INS found 49 percent of the

                             17
                                We omitted General Administrative Plan (GAP) cases from our analyses of INS investigative efforts
                             because we wanted to analyze the results of districts’ targeting efforts. GAP investigations rarely
                             resulted in fines (1 percent) or warnings (10 percent).
                             18
                                INS officials told us that the Employer Sanctions database was likely to be more complete for cases
                             completed after October 1, 1996. After this date, INS’ priorities for worksite enforcement emphasized
                             accurate reporting of employer sanctions case activity. We obtained a copy of the database as of May
                             29, 1998.
                             19
                                The INS official who provided us with the database told us that agents in the field are instructed to
                             report that an investigation has resulted in a NIF only after district counsel has approved the NIF and it
                             had been served on the employer. According to the Employer Sanctions database, 170 investigations (2
                             percent) were categorized as NIFs, but there was no additional information on the size of the proposed




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9,634 employers in compliance with paperwork requirements, although
this did not necessarily mean that the entire workforce was authorized for
employment. INS issued a warning notice to 13 percent of the 9,634
           20                                              21
employers and took no action in 18 percent of the cases. About 59
percent of the fines INS issued in fiscal year 1998 were for substantive
violations, nearly meeting its goal of 60 percent.

In about 2 percent of the investigations, INS initiated criminal proceedings
against an employer. In its midyear review of its fiscal year 1998 priorities,
INS expressed concern that its criminal case accomplishments were
lagging. The emphasis on criminal cases was intended to refocus worksite
enforcement on the most serious offenders. By the end of fiscal year 1998,
INS had presented 127 criminal investigations, about 87 percent of its goal.

Figure 2 shows the results of INS’ completed investigations during the 20-
month period from October 1996 to May 1998.




fines or on whether the fines were assessed for paperwork or substantive violations. This official
believed that some of these cases were misreported by agents in the field and advised us not to count
them as NIFs.
20
   The use of warning notices was a policy decision adopted in 1987 as a matter of INS discretion.
Warning notices are used when INS believes an employer will come into compliance without a fine.
21
 INS completed a case with a determination of “no action” when a determination of compliance,
warning, or fine could not be reached for the following reasons: the business closed or changed owners
during the investigation; there were no employees; all alien employees were hired before November 6,
1986; the case was transferred to another INS office; the business was the subject of a recent
inspection; or INS had already opened an investigation on this business.




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Figure 2: Results of INS Investigations
Completed Between October 1, 1996,
and May 29, 1998




                                          Note: Includes all lead-driven administrative investigations; excludes random compliance
                                          investigations (n=992).
                                          a
                                           Includes all investigations where INS reported that a fine was assessed, but no information was
                                          reported on the type or size of the fine (n=170); no administrative disposition was recorded (n=76);
                                          and a determination of compliance, warning, or fine could not be reached, for the following reasons:
                                          the business closed or changed owners during the investigation; there were no employees; all alien
                                          employees were hired before November 6, 1986; the case was transferred to another INS office; the
                                          business was subject to a recent inspection; or INS had already opened an investigation on this
                                          business (n=1,730).
                                          Source: GAO analysis of INS Employer Sanctions database.


                                          According to INS program officials, several factors may have affected INS’
                                          ability to achieve more significant results. For example, the prevalent use
                                          of fraudulent documents makes it difficult for INS to prove that an
                                          employer knowingly hired an unauthorized alien. In addition, in the pursuit
                                          to meet numerical program goals, such as identifying unauthorized aliens,
                                          districts may have overemphasized the importance of removing aliens
                                          from the workplace to the detriment of the program’s overall goal to
                                          investigate employers who knowingly violated the law.



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INS Collected a Small       INS data on the collection of employer sanctions fines are limited, but the
                            most complete data available showed that INS collected about one-half of
Portion of Assessed Fines   the amount that employers were ordered to pay. During the period we
                            examined, INS issued about $13 million in NIFs to 1,655 employers. After
                            INS issues a NIF, the employer has an opportunity to negotiate the fine
                            amount and payment schedule with INS and may receive a smaller fine.
                            Following settlement discussions, INS issues a Final Order for the amount
                                        22
                            of the fine. Because this process may take some time to complete, INS’
                            Employer Sanctions database for the period we examined did not contain
                            complete data on the size of the Final Orders negotiated between INS and
                                                                                   23
                            employers, or the amount collected from employers. Therefore, to gain a
                            better understanding of INS’ enforcement results, we only analyzed closed
                                                                         24
                            cases with generally complete information. We found that in cases closed
                            between October 1, 1996, and February 1, 1998, INS issued NIFs against
                            833 employers for a total of $6.1 million. Final Orders were issued against
                            794 employers for $4.9 million, and a total of $2.5 million (or 51 percent of
                            the amount ordered) was collected. Reasons given by INS officials
                            explaining why the total amount due was not collected were the following:
                            (1) the employer went out of business; (2) the employer filed for
                            bankruptcy; (3) the employer died; or (4) the business moved, and INS was
                            unable to track down the employer.

Whether Unauthorized        In fiscal year 1998, INS identified 44,474 jobs held by unauthorized
                            workers, or about 15 percent above its fiscal year 1998 goal of 38,507 jobs.
Aliens Were Replaced by     However, whether authorized workers replaced these unauthorized
Authorized Workers Is       workers as INS envisioned is unknown. According to INS officials, INS
Unknown                     does not generally follow up to determine who is hired in positions that are
                            vacated as a result of an INS enforcement action. Also, the Employer
                            Sanctions database does not contain reliable information on the
                            subsequent disposition of aliens who are arrested in worksite enforcement
                                     25
                            actions. Thus, we could not determine how many of these aliens were

                            22
                                 Employers may also request a hearing with an administrative law judge to contest the fine.
                            23
                             The OIG reported in 1996 that INS’ system for tracking and collecting fines needed improvement and
                            recommended that INS develop a better system for tracking financial transactions. INS recently
                            implemented a new system to track the collection of employer sanctions fines. After February 1, 1998,
                            INS no longer kept track of fine collections information in the Employer Sanctions database.
                            24
                               INS considers a worksite case “completed” when an administrative disposition of compliance, fine,
                            warning, or no action has been reached or a criminal case has been initiated. However, a case is not
                            considered “closed” until final action on the case is completed and no further action is required by
                            either the government or the subject of the investigation to finally adjudicate the case.
                            25
                               An INS official told us that data reported on the subsequent dispositions of arrested aliens were not
                            reliable during the period we examined. This official told us that INS has subsequently revised the form
                            used for data submission to collect more reliable information on this data element.




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placed into deportation hearings and how many were removed from the
country. In a 1995 INS Investigations review of the worksite program, INS
acknowledged that its inability to remove aliens found illegally working in
the United States eroded program effectiveness. In its fourth quarter
review of fiscal year 1998 performance, INS indicated that its detention
beds are to be used for mandatory criminal detainees in fiscal year 1999.
This, combined with a reduction in budgeted detention space, would
impede efforts to detain and remove unauthorized aliens. If unauthorized
aliens are not removed, it is possible that they may obtain employment
elsewhere, diluting INS’ goal of making jobs available for authorized
workers.

INS arrested about 27,500 unauthorized aliens during the 9,600 worksite
investigations it completed between October 1, 1996, and May 29, 1998.
These arrests were made in cases where INS determined the employer
complied with Form I-9 paperwork requirements as well as in cases where
employers did not comply. In over one-half of the 4,755 completed
investigations in which INS found that employers complied with Form I-9
paperwork requirements, on the basis of a review of employers’ Form I-9s,
INS also found that unauthorized aliens were present (see fig. 3). INS
arrested 12,698 unauthorized aliens in these worksites. In a portion of
cases, INS investigators could not arrest identified unauthorized aliens
because, for example, by the time the investigators went back to the
worksite to make arrests, the aliens had left their jobs. According to INS
officials, fraudulent document use by unauthorized aliens made it difficult
for employers who complied with the Form I-9 verification requirements to
avoid hiring unauthorized aliens. Officials also told us that it was often
difficult to prove that employers had knowingly hired unauthorized aliens.

Figure 3 shows that in 82 percent of the 1,655 completed investigations in
which INS found employers to be noncompliant and proposed to fine
employers, INS found that unauthorized aliens were present. INS arrested
7,055 unauthorized aliens in these worksites. INS also arrested 7,739
unauthorized aliens in investigations where INS initiated a criminal case,
where employers received warning notices, or where INS completed the
case with a determination of no action.




Page 26                         GAO/GGD-99-33 Unauthorized Employment of Aliens
                                         B-278845




Figure 3: Percentage of Cases in Which Unauthorized Aliens Were Arrested or Identified During INS Employer Worksite
Investigations, October 1, 1996, to May 29, 1998




                                         Note 1: Figure does not include investigations that are completed with the issuance of a warning
                                         notice; categorized as NIFs but with no information on the size and type of the fine; or completed
                                         without the determination of fine, warning, or compliance. The figure also does not include cases with
                                         missing data regarding the numbers of aliens arrested or identified.
                                         Note 2: “Identified” refers to unauthorized aliens identified during worksite operations, but not
                                         arrested. This category includes unauthorized aliens identified through the I-9 audit that left
                                         employment, but were not arrested.
                                         Source: GAO analysis of INS Employer Sanctions database.


INS’ Investigations in                   Worksite investigations in targeted industries have proven only slightly
                                         more productive than investigations in other industries in terms of fines
Targeted Industries and                  assessed, substantive fines assessed, and unauthorized aliens arrested. In
“High-Alien” States Were                 5,265 targeted industries investigations completed between October 1,
Slightly More Productive,                1996, and May 29, 1998, fines were assessed in 19 percent of the cases, and
but Results of Targeting                 58 percent of these fines were for substantive violations. In the other 4,203
                                                                                   26
                                         investigations of nontargeted industries, fines were assessed in 15
Were Mixed                               percent of the cases, and 47 percent of the fines were for substantive
                                         violations. INS arrested unauthorized aliens in 48 percent of the targeted

                                         26
                                          A number of cases (n=166) contained no information on the employer’s industry code. These cases
                                         were omitted from this analysis.




                                         Page 27                                      GAO/GGD-99-33 Unauthorized Employment of Aliens
B-278845




industry investigations compared to 43 percent of the nontargeted
investigations. However, the extent to which INS assessed fines and made
arrests varied considerably among the targeted industries.

INS fined a higher percentage of employers in certain targeted industries
than in others. For example, INS fined more than 20 percent of the
employers in the industrial categories of “eating and drinking places” (24
percent); “miscellaneous food preparation, including seafood preparation”
(28 percent); and “apparel and textile products” (44 percent). In contrast,
INS fined less than 10 percent of the employers in the industrial categories
of “hotels and motels” (5 percent); “nursing homes, nursing care facilities”
(6 percent); and “meat products and meat preparation” (7 percent). Table 1
summarizes the results of INS worksite investigations completed over the
20-month period from October 1996 to May 1998.

Table 1 also shows that INS made arrests in certain targeted industries at
higher levels than others. For example, INS made arrests in over 60
percent of the completed investigations in the industrial categories of
“landscape and horticultural services” (66 percent, 1,154 arrests) and
“miscellaneous food preparation” (61 percent, 672 arrests). In contrast,
INS made arrests in less than 30 percent of the completed investigations in
the industrial categories of “hotels and motels” (28 percent, 544 arrests)
and “nursing homes, nursing care facilities” (29 percent, 42 arrests).




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                                          B-278845




Table 1: Results of INS Worksite Investigations Completed in Targeted and Nontargeted Industries, October 1996 – May 1998
                                                           a
                                                     Fines                                           Arrests
                                      Number of     Percentage        Percentage         Percentage of
                                   investigations     assessed          assessed investigations with         Number of aliens
                   b
Type of industry                      completed substantive fine paperwork fine         aliens arrested             arrested
Targeted industries                         5,265             11               8                     48               14,434
Eating and drinking places                  2,672             14              10                     49                 4,559
Hotels and motels                             678              2               3                     28                   544
General building contractors                  354              6               5                     58                 1,398
Apparel and textile products                  343             32              12                     55                 2,643
Landscape and horticultural
services                                      293              7               8                     66                 1,154
Masonry, stonework, tile, plaster,
insulation                                    192              9               6                     55                   538
Roofing, siding, sheet metal                  159              6               8                     54                   575
Services to dwellings, buildings
(includes janitorial)                         139              4               9                     34                   462
General farm and field crops                   99              4               6                     57                   468
Nursing homes, nursing care
facilities                                     82              2               4                     29                    42
Miscellaneous food preparation
(includes seafood)                             81             16              12                     61                   672
Meat products, preparation                     76              3               4                     57                 1,135
Heavy construction (not
buildings)                                     70              6               4                     33                   152
Forestry                                       20             10               0                     40                    61
Farm labor contractors and labor
management services                             7              0               0                     43                    31
Nontargeted industries                      4,203              7               8                     43               12,649
Total                                       9,468              9              10                     46               27,083
                                          a
                                           Category does not include investigations reported as ending with dispositions of Notice of Intent to
                                          Fine and where the Employer Sanctions database had no information regarding the type of fine
                                          assessed.
                                          b
                                           Does not include investigations where no standard industry code was recorded (n=166).
                                          Source: GAO analysis of INS Employer Sanctions database.




                                          INS’ worksite priorities also call for investigating employers who
                                          knowingly hire unauthorized aliens in those geographic areas that have
                                          traditionally employed unauthorized aliens. Investigations in the seven
                                          states with the highest number of estimated illegal alien residents as of
                                                         27
                                          October 1996 were slightly more productive than investigations in the rest
                                          of the country. The 5,202 worksite investigations in the high-alien states
                                          resulted in fines in 20 percent of the cases, and 54 percent of these were
                                          for substantive violations. The 4,432 worksite investigations in the other

                                          27
                                           See INS Releases Updated Estimates of U.S. Illegal Population (Washington, D.C.: U.S. Immigration
                                          and Naturalization Service News Release, Feb. 1997). These states are California, Texas, Florida, New
                                          York, Illinois, New Jersey, and Arizona.




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                           B-278845




                           states resulted in fines in 14 percent of the cases, and 54 percent of the
                           fines were for substantive violations. A total of 16,048 unauthorized aliens
                           were arrested in cases in the 7 high-alien states, and a total of 11,444
                           unauthorized aliens were arrested in cases in the other states.

                           INS’ approach to how it will enforce IRCA’s employer sanctions provisions
INS Is Changing Its        is changing. In January 1999, INS issued an Interior Enforcement Strategy.
Approach to Worksite       According to the strategy, the primary strategic goal of INS’ interior
Enforcement                enforcement is to reduce the size and annual growth of the illegal resident
                           population. The strategy established the following five strategic priorities:

                       •   identify and remove criminal aliens;
                       •   deter, dismantle, and diminish smuggling or trafficking of aliens;
                       •   respond to community complaints about illegal immigration;
                       •   minimize immigration benefit fraud; and
                       •   block and remove employers’ access to unauthorized workers.

                           With respect to the strategy’s second priority, INS law enforcement efforts
                           are to focus on disrupting and dismantling the criminal infrastructure that
                           encourages and benefits from illegal migration, such as alien smugglers
                           and counterfeit document producers. According to an INS official, INS
                           expects that its new emphasis on dismantling the criminal infrastructure
                           that supports unauthorized employment will result in (1) fewer worksite
                           investigations and removals of unauthorized aliens from the workplace, (2)
                           more criminal employer investigations, and (3) heavier penalties.

                           With respect to the strategy’s fifth priority to block and remove employers’
                           access to unauthorized workers, the INS official responsible for drafting
                           the strategy told us that INS will continue using the worksite procedures
                           outlined in the May 1998 directive to build relationships with employers to
                           create an effective deterrent to illegal immigration. Under the May
                           directive, which we previously described, INS’ worksite enforcement
                           efforts are to be focused on employers, not unauthorized aliens. By
                           educating employers whom INS has found—through Form I-9 and
                           employment record reviews—to have unknowingly hired unauthorized
                           aliens, INS expects that such employers will be better able to comply with
                           IRCA. This, in turn, would enable INS to focus its limited worksite
                           enforcement resources on employers suspected of criminal activities. INS
                           has not specified how much resources it intends to devote to such
                           employer compliance efforts. According to an INS official, as of March
                           1999, INS was in the process of developing implementation plans for the
                           strategic priorities.




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B-278845




The strategy calls for INS to prioritize and aggressively pursue criminal
investigation of employers who are flagrant or grave violators. However,
the strategy does not define “flagrant or grave violation.” As previously
discussed, INS’ previous worksite enforcement goal was similar, that is, to
investigate employers who were “major violators.” Yet, 83 percent of its
investigations resulted in no employer sanctions.

In the months preceding issuance of the final interior enforcement
strategy, worksite investigations field units had already begun instituting
new procedures in response to the anticipated strategy changes. For
example, an INS Central Region official told us employer investigations are
now focused on those employers who INS believes may have committed
criminal violations. Generally, investigations in this region are not opened
in cases where the only allegation is the presence of unauthorized aliens.
INS worksite program officials told us that worksite enforcement units in
its other two regions continue to open investigations on the basis of the
perceived merit of the lead (e.g., a strong allegation that there are
unauthorized aliens at a business), even if there is no indication that the
employer is involved in criminal activity.

INS plans to implement its new strategy over a 5-year period. During fiscal
years 1999 and 2000, INS expects its district directors to conduct threat
assessments and use intelligence information to identify the most
significant illegal alien problems in their respective districts, including
industries that rely on unauthorized alien employment. Using this
information, INS plans to focus its enforcement efforts and resources in
the geographic areas and industries that have the most serious problems
with unauthorized alien employment.

The strategy does not clearly describe the specific measures INS will use
to gauge its performance. The strategy states that INS will evaluate its
performance on the basis of such things as changes in the behavior or
business practices of persons and organizations. One possible measure
INS lists for gauging effectiveness in the worksite area is change in the
wage scales in certain targeted industries. However, INS has not yet
specified how wage scales will be measured; what constitutes a targeted
industry and the direction, magnitude, and timing of the expected wage
effect; and how INS plans to relate any changes to either its enforcement
efforts or other immigration-related causes. According to the strategy, the
specific performance measurements within the context of the strategy will
be developed in the annual performance plans required by the Government
Performance and Results Act.




Page 31                         GAO/GGD-99-33 Unauthorized Employment of Aliens
              B-278845




              Because INS is just beginning this new approach and is still developing
              implementation plans, it is too soon to tell how or how well INS will
              implement its strategy. It is also too soon to tell what impact, if any, the
              new approach will have on dismantling the infrastructure that supports
              illegal migration and employers’ access to undocumented workers.

              INS faces significant obstacles to reducing unauthorized alien
Conclusions   employment. Although IRCA established a process for employers to follow
              to verify employees’ eligibility to work in the United States, significant
              numbers of unauthorized aliens still obtain employment because the
              process can be circumvented or easily thwarted by fraud. Employers who
              want to comply with the law by hiring only authorized workers can be
              deceived by unauthorized aliens’ use of widely available fraudulent
              documents. Other employers who may seek “cheap labor” could
              intentionally hire unauthorized aliens under the guise of having complied
              with the employment verification requirements. In general, employers of
              unauthorized aliens have faced little likelihood that INS would (1)
              investigate them, (2) be able to prove that they knowingly hired
              unauthorized aliens, (3) collect fines, or (4) criminally prosecute them.
              Further, Labor’s efforts to identify employers suspected of hiring
              unauthorized aliens have been limited and appear likely to be even more
              limited in the future.

              Because enforcement measures can only go so far, we believe INS is going
              in the right direction by testing electronic verification procedures,
              proposing to significantly reduce the number of authorization and
              identification documents, and making documents more tamper resistant to
              try to improve the verification process. However, obstacles, such as
              reluctance on the part of some employers to participate in INS’ electronic
              verification pilot programs, have hampered INS’ ability to improve the
              process. Because tools such as electronic verification will be effective with
              employers in industries with a history of reliance on unauthorized aliens
              only to the extent that they use them, getting such employers to participate
              in the electronic verification pilots is important. Labor and other agencies
              that have contact with employers generally have not augmented INS’
              outreach efforts by disseminating information on the pilots.

              In addition to these obstacles, INS’ interior enforcement strategy does not
              define the criteria for initiating investigations of employers suspected of
              criminal violations, which is an investigative priority. Having clear criteria
              is important if INS is to effectively focus its limited staff to achieve its
              enforcement goals and intended results.




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                        B-278845




                        We recommend that the INS Commissioner
Recommendations
                      • as part of the outreach program for INS’ pilot programs, seek assistance
                        from federal and state agencies, such as the Department of Labor and state
                        labor agencies, in disseminating information to employers about the
                        programs and

                      • in implementing the interior enforcement strategy, clarify the criteria for
                        opening investigations of employers suspected of criminal activities.

                        We requested comments on a draft of this report from Justice, Labor, and
Agency Comments and     SSA. On March 1, 1999, Justice’s Assistant Attorney General for
Our Evaluation          Administration provided written comments addressing its activities related
                        to our two recommendations and two other issues (see app. III).

                        With respect to our recommendation that INS seek assistance from federal
                        and state agencies in disseminating information to employers about the
                        employer verification pilot programs, Justice agreed that more systematic
                        coordination with other agencies could be useful. Justice stated that it
                        would add this type of coordination effort to other recruitment efforts
                        under way. Justice did not agree, however, that it is appropriate at this
                        time to involve OSC in publicizing the verification pilot programs. Justice’s
                        rationale was that the verification pilot programs are still in the test stage,
                        have not been evaluated for their impact on immigration-related job
                        discrimination, and might pose a conflict of interest to OSC. That is, OSC’s
                        litigation stance could be compromised if it were to challenge the
                        employment practices of employers it had informed about the pilot.

                        We continue to believe that OSC should assist INS in disseminating
                        information about the pilots. Our recommendation is not intended to
                        suggest that these agencies endorse the pilot programs. Indeed, we agree
                        that evaluative data are needed to determine the merits of the programs. A
                        sound evaluation, however, requires that a sufficient number of employers
                        volunteer to participate in the pilots so that the results can be meaningfully
                        analyzed and interpreted. Agencies, including OSC, can make clear that by
                        providing information on verification pilot programs, they are merely
                        making employers aware of verification options, and not endorsing the
                        programs or making assurances that employers would not be investigated
                        or prosecuted if circumstances warrant it.

                        Our draft report, which was prepared before INS issued its final interior
                        enforcement strategy, recommended that the INS Coimmissioner, in the
                        final interior enforcement strategy, address (1) the criteria for opening



                        Page 33                           GAO/GGD-99-33 Unauthorized Employment of Aliens
B-278845




investigations of employers suspected of criminal activities and (2) how
INS will investigate employers against whom there have been no
allegations of criminal activities, but who may not be complying with
IRCA’s requirements. Justice did not comment specifically on this
recommendation, but stated that since we finished our data collection, INS
had completed its interior enforcement strategy.

INS issued its final interior enforcement strategy in January 1999. We
reviewed the final strategy and made revisions to the report to reflect the
new information and the need to clarify the criteria for opening
investigations of employers suspected of criminal activities. Also, the final
strategy contains a strategic priority to block and remove employers’
access to unauthorized workers that was not in the draft strategy. This
priority and INS’ explanation on how it plans to implement it appears to
address the second part of our initial recommendation. Therefore, we
deleted this portion of the recommendation from this report.

Justice raised two other issues concerning our draft report. First, Justice
indicated that it does not favor a rule requiring aliens to show only INS-
issued work authorization documents as proof of employment eligibility,
even if the INS documents are more fraud resistant than other documents.
Justice expressed the concern that such a requirement could increase
immigration-related employment discrimination because some employers
may require foreign-looking U.S. citizens to present INS-issued work
authorization documents.

We are not suggesting that aliens be required to show only their INS-issued
work authorization document. Our intent is to point out that, although INS
has made progress in increasing the integrity of some documents, the
verification system can still be undermined through fraudulent use of non-
INS work authorization documents. We revised this report to clarify this
point.

Second, Justice characterized our draft report as suggesting that a conflict
exists between INS’ and Labor’s missions, whereas Justice believes they
are complementary. We agree with Justice that the missions of the two
agencies are complementary. As noted in this report, however, Labor
officials expressed concern that using Labor investigators to identify and
refer to INS workers who may be unauthorized could deter unauthorized
workers from reporting labor standards violations, thus compromising
Labor’s fundamental mission of rooting out employers who violate labor
standards. To the extent that this observation is true, our intent was to
point out the potential for such a conflict in certain circumstances.



Page 34                          GAO/GGD-99-33 Unauthorized Employment of Aliens
B-278845




We also received technical comments from Justice and SSA, and we
incorporated them in this report as appropriate. Labor did not provide
comments on the draft report.

We are sending copies of this report to the Honorable Janet Reno, Attorney
General; the Honorable Doris Meissner, Commissioner, Immigration and
Naturalization Service; the Honorable Alexis Herman, Secretary of Labor;
the Honorable Kenneth Apfel, Commissioner, Social Security
Administration; the Honorable Jacob Lew, Director, Office of Management
and Budget; and other interested parties. We will also make copies
available to others upon request.

If you or your staff have any questions concerning this report, please
contact me on (202) 512-8777. This report was done under the direction of
Evi L. Rezmovic, Assistant Director, Administration of Justice Issues.
Other major contributors are listed in appendix IV.




Richard M. Stana
Associate Director, Administration
of Justice Issues




Page 35                         GAO/GGD-99-33 Unauthorized Employment of Aliens
Contents



Letter                                                                                               1


Appendix I                                                                                          38

Employment Eligibility
Verification Form I-9
and Current List of
Acceptable Documents
Appendix II                                                                                         41

Objectives, Scope, and
Methodology
Appendix III                                                                                        43

Comments From the
Department of Justice
Appendix IV                                                                                         47

Major Contributors to
This Report
Tables                   Table 1: Results of INS Worksite Investigations                            29
                           Completed in Targeted and Nontargeted Industries,
                           October 1996 – May 1998


Figures                  Figure 1: INS Enforcement Program Workyears for                            17
                           Fiscal Year 1998
                         Figure 2: Results of INS Investigations Completed                          24
                           Between October 1, 1996, and May 29, 1998
                         Figure 3: Percentage of Cases in Which Unauthorized                        27
                           Aliens Were Arrested or Identified During INS
                           Employer Worksite Investigations, October 1, 1996, to
                           May 29, 1998
                         Figure I.1: Employment Eligibility Verification Form I-9                   38
                                                                                                    39
                         Figure I.2: Current List of Acceptable Documents for                       40
                           Employment Eligibility Verification



                         Page 36                        GAO/GGD-99-33 Unauthorized Employment of Aliens
Contents




           Abbreviations

           INS         Immigration and Naturalization Service
           IRCA        Immigration Reform and Control Act
           NIF         Notice of Intent to Fine
           OIG         Office of the Inspector General
           OSC         Office of Special Counsel
           SSA         Social Security Administration
           SSN         Social Security number
           GAP         General Administrative Plan


           Page 37                         GAO/GGD-99-33 Unauthorized Employment of Aliens
Appendix I

Employment Eligibility Verification Form I-9
and Current List of Acceptable Documents

Figure I.1: Employment Eligibility Verification Form I-9




                                             (continued)




                                            Page 38        GAO/GGD-99-33 Unauthorized Employment of Aliens
Appendix I
Employment Eligibility Verification Form I-9 and Current List of Acceptable Documents




Page 39                               GAO/GGD-99-33 Unauthorized Employment of Aliens
                                           Appendix I
                                           Employment Eligibility Verification Form I-9 and Current List of Acceptable Documents




Figure I.2: Current List of Acceptable Documents for Employment Eligibility Verification




                                           Note: For employment eligibility verification purposes, one document from list A or one each from list
                                           A and B are required.
                                           a
                                            For persons under age 18 who are unable to present a document listed above.
                                           Source: INS, “List of Acceptable Employment Eligibility Verification Documents for Form I-9,” under
                                           interim rules, as of Sept. 30, 1997.




                                           Page 40                                     GAO/GGD-99-33 Unauthorized Employment of Aliens
Appendix II

Objectives, Scope, and Methodology


              Our objectives were to determine (1) the effectiveness of the current
              employment verification process in preventing employers from hiring
              unauthorized aliens, (2) the Immigration and Naturalization Service’s (INS)
              efforts to improve the employment verification process, (3) the level of
              effort INS and the Department of Labor devoted to worksite enforcement
              activities and the results of these activities, and (4) changes being made to
              INS’ worksite enforcement program.

              To determine the effectiveness of the current employment verification
              process, we reviewed research and analytic reports that we issued and
              those issued by INS, the Department of Justice’s Office of Inspector
              General, Labor, the Commission on Immigration Reform, and other
              immigration researchers. In addition, we held discussions with INS, Labor,
              and Social Security Administration (SSA) officials and analyzed data from
              INS’ database of employer sanctions cases to obtain INS statistics on the
              use of fraudulent documents by unauthorized aliens.

              To determine what actions INS had undertaken to improve the
              employment verification process, we held discussions with and obtained
              documents from INS, SSA, Labor, and Justice’s Office of Special Counsel
              for Immigration-Related Unfair Employment Practices officials. Using a
              data collection instrument, we surveyed INS managers, representing
              worksite enforcement units in 32 of INS’ 33 districts, who attended INS’
              June 1998 national worksite enforcement conference in San Diego. We
              asked respondents questions about the availability of pilot programs, the
              extent to which INS staff made efforts to enroll employers in the pilot
              programs, and the level of interest in the pilots among employers in their
              districts. We contacted representatives of four national organizations
              representing business owners or employee unions to discuss INS’ pilot
              verification projects, among other issues. We selected three of these
              organizations because they represented business owners or employees in
              industries that INS targeted in its worksite enforcement investigations. We
              selected the fourth organization because it represented business owners in
              a wide range of industries.

              To determine the extent of INS’ resources devoted to activities in the
              worksite area, we analyzed INS budget data and workload data. To
              determine the results of these worksite activities, we also analyzed data
              from INS’ database of employer sanctions investigations. This database
              contains such information as the business’ name, address, location,
              industry code, owner name, and number of employees. In addition, it
              contains information on the predication for opening the investigation (i.e.,
              whether the case was lead-driven or randomly selected for a compliance



              Page 41                          GAO/GGD-99-33 Unauthorized Employment of Aliens
Appendix II
Objectives, Scope, and Methodology




inspection); the investigation’s administrative and/or criminal disposition
(e.g., compliance, warning notice, notice of intent to fine, or initiation of a
criminal case); the number of unauthorized aliens identified and arrested
by INS; the number and type of fraudulent documents identified by INS;
the number and type of violations by employers; the amount of civil
monetary penalties; and the amount collected by INS.

INS provided us with a CD-ROM containing information on its employer
sanctions investigations for the period of October 1, 1996, to May 29, 1998.
We analyzed this time period because INS officials told us that the
database was likely to be more complete and accurate for this period than
for previous time periods. According to these officials, starting in fiscal
year 1997, the INS priorities for worksite enforcement emphasized
accurate reporting of employer sanctions case activity. Also, we believed
that analyzing cases opened or completed after October 1, 1996, would be
more representative of INS’ recent investigative activities. We discussed
the strengths and limitations of these data with INS headquarters officials
and with investigators at the local level, but we did not independently
verify the validity of these data.

In our survey of INS worksite enforcement unit supervisors (previously
described), we also asked questions about the type and extent of (1)
worksite activities in the supervisors’ districts and (2) coordination with
Labor and other federal and state agencies. To further determine the
extent of Labor’s coordination with INS, we conducted structured
telephone interviews with Labor officials from districts in Los Angeles; San
Diego; Phoenix; Houston, TX; Chicago; Miami, FL; Baltimore; Atlanta;
northern New Jersey; and New York. We selected these offices because
they were in the seven states with the highest reported number of illegal
aliens, based on INS data collected in 1996 (each state had an estimated
population of over 100,000 illegal alien residents), or because INS worksite
enforcement unit supervisors indicated they had either good coordination
or problems coordinating with Labor. We also analyzed Labor workload
data to determine the extent to which Labor referred cases to INS for
investigation and conducted structured interviews with state labor officials
from California, Texas, Florida, Illinois, New York, and New Jersey to
determine the extent to which they coordinated their activities with INS.

To identify changes being made to INS’ worksite enforcement program, we
reviewed INS strategy documents, attended INS meetings in which INS
officials explained worksite enforcement program changes, and discussed
these changes with INS headquarters and regional officials.




Page 42                              GAO/GGD-99-33 Unauthorized Employment of Aliens
Appendix III

Comments From the Department of Justice




               Page 43    GAO/GGD-99-33 Unauthorized Employment of Aliens
                Appendix III
                Comments From the Department of Justice




Now on p. 13.




                Page 44                            GAO/GGD-99-33 Unauthorized Employment of Aliens
                            Appendix III
                            Comments From the Department of Justice




Now on pp. 3, 11, and 15.




Now on pp. 3, 16, and 18-
21.




                            Page 45                            GAO/GGD-99-33 Unauthorized Employment of Aliens
Appendix III
Comments From the Department of Justice




Page 46                            GAO/GGD-99-33 Unauthorized Employment of Aliens
Appendix IV

Major Contributors to This Report


                        Evi L. Rezmovic, Assistant Director
General Government      Stuart M. Kaufman, Senior Social Science Analyst
Division, Washington,   Katherine M. Wheeler, Publishing Advisor
D.C.                    Charlotte A. Moore, Communications Analyst

                        Ann H. Finley, Senior Attorney
Office of the General
Counsel, Washington,
D.C.
                        Michael P. Dino, Evaluator-In-Charge
Los Angeles Field       Tom Jessor, Senior Evaluator
Office                  Nancy K. Kawahara, Senior Evaluator
                        Stacia Levenfeld, GAO Intern




                        Page 47                          GAO/GGD-99-33 Unauthorized Employment of Aliens
Page 48   GAO/GGD-99-33 Unauthorized Employment of Aliens
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