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Rep. Judy Chu (D-CA): “Mandatory E-Verify Legislation Will Cripple Small Businesses”

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Judy ChuEditor’s Note: The E-Verify debate is heating up on Capitol Hill. We’re expecting Rep. Lamar Smith (R-TX) to conduct a markup of his job-killing bill next week, but as it is with so much of the timing in Congress, that could change. Members of the House are engaging in the battle.

Rep. Judy Chu (D-CA) sits on both the House Judiciary and Small Business Committees. She’s a strong opponent of Smith’s bill. From her unique vantage point, Chu tries to explain the dangers posed to small business through a “Dear Colleague” letter to her fellow House members. We’re posting Chu’s letter in its entirety. The quote at the beginning of Chu’s letter is from a Republican State Senator in Florida and it is particularly enlightening.

Mandatory E-Verify Legislation Will Cripple Small Businesses

When I ran for office last year the number one thing that people wanted to talk about, in all of our campaigns, and in all the polls, the number one thing that people were concerned about was jobs and the economy… Last summer I told my office manager… we need to get on this E-Verify thing…. So she started looking at it, and it is not a user friendly situation. As a matter of fact, we couldn’t figure out how to make it work, as one small business… I ran on a platform of jobs. I ran on a platform of trying to do things here to create new jobs…  At this time in our economy, this is not the best thing that we should be doing, making it more expensive to hire people.

— Small businessman and Republican Florida Senator Jack Latvala speaking on the floor in opposition to imposing mandatory E-Verify on Florida employers

Dear Colleague:

During the 2010 election, the voters made one thing as clear as can be. They sent us here to create jobs. In the months since then, not only has the House Leadership failed to put a single jobs bill on the House Floor – but now they are trying to force small businesses to take on higher costs.

Judiciary Chairman Lamar Smith will introduce a bill tomorrow to expand E-Verify into a mandatory program, regardless of the massive regulatory burden that would be placed on small businesses. E-Verify is currently a voluntary government database used to verify employment authorization.

As a member of both the Judiciary and Small Business Committees, I am concerned about the effect this legislation will have on American small businesses.  Mom and pop businesses have no idea what is about to hit them if this bill becomes law. To start with, every one of them will have to master an 82 page “User Manual” filled with procedures and diagrams and take a 3-hour tutorial. They will then be required to run the E-Verify software for each new hire. Remember, most small businesses only hire a few people each year, so many will have to re-learn the software and procedures. Under the Smith bill, some existing workers must also be run through the system, but figuring out which ones practically requires a law degree.

According to a Bloomberg Government study, the cost to struggling small businesses of making E-Verify mandatory would run into the billions of dollars.  Based on government statistics, it’s likely that as many as a million lawful workers, including citizens, will be incorrectly declined by E-Verify each year.  For small businesses expenses mount quickly when you add in the uncounted costs associated with haggling with the bureaucracy until those records for quality legal employees are corrected.

Is it any surprise that small businesses have voted with their feet – a whopping about 98 percent  of small businesses have decided not to use the current voluntary program?  Why don’t small businesses use E-Verify? 

  • 42% say it is costly or time consuming;

  • 43% say the transition would be difficult of disruptive;

  • 25% say the system is too burdensome;

  • 23% say they don’t have available staff with sufficient skills.

In other words, small businesses don’t use the program because it drains resources that could be used to employ workers.  As the Main Street Alliance, a coalition of small business owners, stated in a letter to Congress, “Until Congress acts in a pragmatic fashion to restore order to our immigration system, forcing small businesses to enforce immigration law will directly impact our bottom line at a critical time.”

But don’t take my word for it.  Before you vote to make E-Verify mandatory, I urge you to review these facts with the small businesses in your own district to see how they would feel about this burdensome new government mandate.