Dave Mazanowski’s landscape company in Fishers, Ind., went through some growing pains when it decided to start using E-Verify, a federal Internet system that checks the citizenship status of workers.
The Indianapolis Star reported that with 70% of his workforce Hispanic, he concluded the move was necessary if he wanted to keep an upper hand in the brewing immigration debate.
“We saw the whole immigration issue coming to a head one way or another,” said Mazanowski, the owner of MainScape in Fishers. “We decided not to just stick our head in the sand but to try to get ahead of the curve.”
Ended up, he was way ahead of the curve.
Five years after he started using E-Verify to weed out unauthorized job applicants, portions of a new state law that take effect Friday (July 1) strongly encourage all Indiana employers to use the same system.
While some parts of the law have been put on hold by a court challenge, portions aimed at employers are set to take effect as planned.
The new law requires companies doing work for state or local government to use E-Verify for all hires. But it also provides an incentive for all Indiana employers to enroll, including RV-related companies operating in the industry’s manufacturing hub.
Under the law, Indiana employers using E-Verify would be given a free pass from some new state penalties if they are caught employing an unauthorized worker.
“Given this law in Indiana, and clearly on a federal level, the future seems to be with E-Verify,” said Michael Palmer, a partner in the labor and employment division at Barnes & Thornburg. “It does behoove employers to sign up.”
The system, operated by the Department of Homeland Security in partnership with the Social Security Administration, verifies online the employment eligibility of new hires.
Critics say there are glitches in the system, that it’s known for claiming workers are illegal when they really aren’t. In addition, there is an administrative cost to using E-Verify.
But the author of the law, Sen. Mike Delph, R-Carmel, says misinformation about E-Verify runs rampant.
“The people that don’t want to be held to account conjure up every excuse in the world as to why they should not comply,” he said.
Penalties imposed by the new law would:
• Take away from businesses certain state income tax credits and deductions related to services provided by unauthorized workers — unless the employer uses E-Verify.
• Allow the state to sue employers for reimbursement of unemployment insurance benefits if they knowingly employ unauthorized workers.
State agencies also will be required to verify the immigration status of individuals seeking to receive public benefits.
The current law is a watered-down version of what Delph really wanted. He originally proposed a law that yanked the state license for any employer caught three times knowingly and willingly hiring illegal immigrants.
“I think most people in Indiana feel that way,” Delph said. “They feel that employers who purposely violate the law should be penalized severely.”
That’s not how Indiana Chamber of Commerce President Kevin Brinegar felt.
“Three strikes and you’re out, we adamantly opposed,” he said. “That penalty doesn’t fit the crime.”
The latest incarnation of the law is better, he said.
“Relatively speaking, it ended up with a bill we still didn’t like, but the business community could live with if it had to,” Brinegar said.
After all, some of the law makes complete sense, said George Raymond, vice president of human resources and labor relations for the Chamber.
“Companies shouldn’t be hiring undocumented workers in the first place,” he said. “Having them pay the (tax) penalty? I don’t get any heartburn over that.”
It seems to be E-Verify that is causing the most controversy.
Rick Wajda, chief executive of the Indiana Builders Association, worries that some of his 7,000 members will have a tough time using the system.
“Most of our guys are small-business owners who may or may not have an office person and definitely don’t have an HR department,” he said. “And I know this is hard to believe, but a lot of our guys may not have computer access all the time.”
E-Verify requires a point person at a company to enter the information for new hires online.
Gary Jacobson, who has used E-Verify since 1996 at his meatpacking company, said the system gets a bad rap.
“There were some flaws in the system to begin with,” said Jacobson, whose Delphi-based Indiana Packers employs 1,700. “They have systemically been patching that up, and it’s a pretty good system.”
Jacobson said it gives him peace of mind that he’s doing the right thing.
“Everything we do, we want to do aboveboard, and we want to do it legally,” he said. “We don’t want to have to worry about whether we are going to have employees here that shouldn’t be.”
And now, E-Verify could help employers avoid the new penalties in the law, such as paying back unemployment benefits for illegal workers.
Mark Everson, commissioner for the Indiana Department of Workforce Development, said he doesn’t see that part of the law having to be enforced often. His department already does extensive screening before ever paying benefits to a worker.
“It’s already part of our process,” he said. “We do not see a significant impact or a change in the way we do things (because of this law).”
Still, Indiana employers stand to feel some effects of the law, Palmer said.
“Indiana is following the states that have jumped into this issue,” he said. “Everybody recognizes there is an immigration problem, but the federal government hasn’t been able to come up with any comprehensive immigration reform. A lot of states have lost patience with that process and created their own laws.”
For Mazanowski, Indiana’s law as it relates to E-Verify is a pretty good one.
“Until E-Verify, there was no good way to find out if a guy was legal,” he said. “It may be a big pain to implement, but if you can get through it — it takes about six months — you will get a good, solid workforce.”