Immigration, principally illegal immigration, has become a prominent political issue in the United States. And, it is not just an issue challenging federal authorities where it has traditionally lain. States and even localities are now involved. The stimulus for illegal immigration is principally employment. Non-Americans come to the United States to work. Stemming the tide of illegal immigration is therefore tied to the hiring process. But government-created impediments to hiring can create severe problems for small employers. As a result, this issue of the National Small Business Poll focuses on Hiring Immigrants.
Eleven (11) percent of small employers have an immigrant on the payroll (Q#11). The largest, small businesses, those employing 20 or more people, are twice as likely as the smallest, those employing nine or fewer, to have at least one. Therefore, while about one in 10 small employers are currently exposed to immigrants as employees, the overwhelming
majority are not.
Many employers currently without an immigrant employee have hired one or more at some point; the survey did not capture the number. Others currently without an immigrant employee will hire one in the future. The result is a sizeable share of the small employer population concerned over the process of hiring immigrants.
The overwhelming majority of small employers think they have no need for information or advice about hiring employees generally or hiring immigrant employees specifically. Just 4 percent needed some explanation of a hiring-related issue in the last three years; 94 percent did not (Q#14). The following indicates that more may need information than think they do.
Employers must complete an I-9 form for each new hire. That requirement applies to the employment of citizens and non-citizens alike. However, just 36 percent of small employers could recall completing an I-9 form at some point in the last three years. Fifty-one (51) percent of those employing 20 or more people remember doing so. The lack of familiarity with the form number (I-9) used in the question, delegation of new employee paperwork to others, and no hires made in the last three years are only three possible reasons for a respondent's inability to recall completing the form.
Employers must obtain two forms of identification from a prospective employee in order to hire. The first piece must prove that the person is who he/she says he/she is. That requires a picture ID of some type. The second piece must show that a person is eligible to work in the United States. That ID could be a document showing the individual is a citizen or has permission to work. A passport serves both purposes, but more often than not two separate forms of ID fill the legal requirements. These requirements were explained to respondents.
A driver's license, most frequently state issued, is far and away the most common form of ID new employees use to identify themselves. Ninety-two (92) percent of small employers who recall filling out an I-9 form in the last three years indicate that a driver's license is the most frequent type of ID used for this purpose (Q#2). Moreover, 98 percent of those who indicate that a driver's license is the most common form, think that at least 90 percent of new hires use it (Q#2a). The combined result is that small employers think that driver's licenses are the overwhelming means of employee identification. No other form is even an identifiable second most common. Thus, a tamper-proof/fool-proof state driver's license appears a high priority if ID for this purpose is important.
Documents used to prove one is eligible to work are notably more varied. The single most common document is the Social Security card. Forty-eight (48) percent of small employers indicate the Social Security card is the most commonly used form of ID to demonstrate eligibility to work (Q#3). Eight percent identify birth certificates, 5 percent passports and 4 percent Permanent Residence Cards, also known as "Green Cards." However, 27 percent could not identify any single document as the most often used. It is not obvious whether that indecision implies common use of various forms or the respondent simply does not recall.
Despite the lack of consensus over the form of ID most commonly used to prove work eligibility, 85 percent of those identifying a document claim that 90 percent or more of the people they hire used it (Q#3a). These data could be compromised by a large number of firms hiring a single employee over the last three years. In those instances, everyone (100%) by definition would use the same document. In any event, the Social Security card remains an important identification document. The idea of a tamper-proof/fool-proof Social Security card is only somewhat less useful for I-9 purposes than a driver’s license.
At times, prospective employees will present employers false ID. There are a number of possible reasons why a prospective employee might want to do this. The person could be too young for the job; the person might want to escape a past; or, the person might be an illegal immigrant. Nine percent of small employers completing an I-9 form in the last three years think they have been presented with false ID to obtain employment (Q#6). The survey followed collection of those data with a series of questions to those experiencing false ID. However, not enough small business owners recognized instances of false ID to obtain greater detail about their experience with it. As a result, there were insufficient cases to ascertain the reason(s) the small employer became suspicious, the frequency of such experiences, and similar relevant issues.
Records and Records Maintenance
Eighty (80) percent of small employers who recall completing the I-9 form in the last three years make photocopies of the documents presented them by the new hire (Q#4). Eighteen (18) percent do not. They usually photocopy those documents in-house. Eighty-eight (88) percent have a photocopy machine in their place of business, including 96 percent of those employing 20 or more people (Q#9). But, even if they do not have a copy machine on the premises, 81 percent have one within five minutes of the business (Q#9a). About 2 percent therefore do not have ready access to a copy machine.
One possible means to detect employees who used illegal IDs to get hired is receipt of a "does-not-match" letter from the Social Security Administration. When employers file their withholding taxes with the government, they must submit the employee's name and Social Security number along with other information. When the name and number do not match existing information, the agency generates a “does-not-match” letter and sends it to the employer. Of those who recall completing an I-9 form in the last three years, 6 percent also recall receipt of such a letter from SSA in the last three years (Q#7).
Though again the number of cases is small, it appears that about two-thirds have received just one such letter in the last three years (Q#7a). Many of the mismatches are simply clerical errors, but others are not. Those which are not could involve the use of false ID. One-third of small employers claim that their experience(s) always involve a clerical error of some type (Q#7b). Still, 23 percent think some are and some are not, and 28 percent think they never are. Sixteen (16) percent did not answer. Resolving the problem reflected in the "does-not-match" letter varies substantially. Thirty-six (36) percent typically resolve the outstanding issue in less than a week, but 48 percent take more than two weeks to do so (Q#7c).
Proposals to help stem illegal immigration often involve checking the status of new hires prior to their actual start. If these were implemented, they would be highly disruptive to small employers unless they could be completed almost instantaneously, like a credit card transaction. Twenty-seven (27) percent of small employers report that the most common time frame between a new employee hire and start is within 24 hours (Q#8). Another 36 percent report the time frame is most often about one week. That means five of eight small firms most commonly start their people within a week of hire.
The most difficult problems encountered in any pre-employment status check would come among small employers who expect people to begin within 24 hours. Twenty-seven (27) percent typically start their people in that time frame. What about the others who most frequently start them at some other time interval? Just 5 percent of that group commonly starts people within the next 24 hours (Q#8a). But 25 percent do sometimes. Thus, if pre-employment status checks took 24 hours or longer about half of all small employers would be disrupted at some point.
A second perspective comes with day labor rather than permanent employees. A 24-hour requirement, let alone longer, could be fatal to many day labor markets. The survey defined day labor for the respondent as someone who usually does manual labor for a day or two knowing the work is just for that brief period. By that definition, 20 percent hired day labor for their business on one or more occasions in the last year (Q#10).
More/Less Work Visas
Representatives of larger businesses, in particular, strongly argue that Washington should increase the number of work visas due to a skilled labor shortage; representatives of others, often in agriculture and tourism, strongly argue that Washington should increase the number of temporary work visas that will increase their supply of labor. Less vocal are those who claim these additional workers will damage their businesses due to greater competition, cheap labor, etc.
Seventy-four (74) percent of small employers think that increasing the number of H1B visas (for skilled employees) will not directly affect their businesses (Q#12). The remainder is split. Four percent believe their business will directly benefit a lot from an increase in H1B visas and another 6 percent believe they will benefit a little. In contrast, 4 percent believe their business will directly be damaged a lot by an increase and another 4 percent believe they will be directly damaged a little. The benefit/damage split is even for all intents and purposes with three of four unaffected.
The assessment of increases in H2B visas is little different. Eighty-one (81) percent do not think they will be directly impacted (Q#13). Yet, 3 percent believe they would directly benefit a lot and another 4 percent believe they will directly benefit a little. The same percentages hold the opposite view. Four percent think they will be directly damaged a lot and 3 percent think they will be directly damaged a little.
If government intends to use the hiring process to reduce illegal immigration, it is critical that any required screening occurs in a very short period of time, or after-thefact. Small business owners simply cannot function in an environment where hiring is delayed a day or two, let alone a week, for administrative reasons. Many need people immediately, but the types of jobs requiring immediate placement often draw from labor pools most likely to have illegal immigrants. This presents government a dilemma which has yet to be successfully resolved.
State driver's licenses, and to a lesser extent Social Security cards, are the primary forms of identification used by prospective employees. Small employers are not and cannot be expected to be ID experts; they are not law enforcement officials. If they accept either or both of these documents in good faith and can document it, they should be held harmless. The same is true of other government-issued ID. That means if government is serious about screening illegal immigrants through the hiring process, they have a responsibility to create tamper-proof ID, an ID that small employers can verify quickly.
It should be noted that as many businesses directly benefit from increased work visas as are directly damaged by increasing them. Those benefiting tend to be slightly larger, suggesting greater economic impact from increases. Still, the fact there are small business owners who see direct business damage from increases focuses on a dimension to the immigration debate that is not often heard.