It would be a huge departure from the current setup, that's for sure. While the existing law (the Immigration Reform and Control Act of 1986) made it illegal to hire undocumented workers, it also established the I-9 process. That system, which requires employers to verify the employment eligibility of all new hires by checking documents such as visas and driver's licenses, goes easy on businesses. If a worker's documents look valid, an employer must accept them — that, or risk a discrimination lawsuit. It's the corporate version of "Don't ask, don't tell."

The loophole is one of the reasons businesses have been able to hire so many undocumented workers of late. But HR 4437, sponsored by Rep. F. James Sensenbrenner Jr. (R­-Wis.), would put an end to that practice. It would also increase enforcement, which has all but stopped due to the government's post-9/11 focus on finding terrorists. The numbers tell the tale: in 1999, 417 companies were fined for hiring illegal workers; in 2004, only 3 received penalties.

Not surprisingly, groups ranging from the U.S. Chamber of Commerce to the Service Employees International Union and the U.S. Conference of Catholic Bishops adamantly oppose HR 4437, calling it "an unworkable enforcement bill." Ingersoll-Rand's Dickson (who also chairs the Chamber of Commerce's subcommittee on immigration) says the employer penalties proposed in the legislation are particularly egregious, given how hard it is to detect fraudulent documents.

Dickson cites the example of a forged New Jersey driver's license an immigration official showed her recently. "It was beautifully manufactured — I would never have been able to tell," she says. "And now they're talking about $25,000 fines and criminal penalties. Who's going to want to take responsibility for filing an I-9 if you're criminally liable?"

Where'd Everybody Go?
A Senate bill sponsored by John McCain (R-Ariz.) and Edward Kennedy (D-Mass.) takes a less punitive approach to fraudulent documents. The bill, which appears to have some backing in the Senate, would mandate the use of tamper-resistant visas that could be swiped like a credit card to verify employment eligibility.

CFOs at businesses with a high percentage of foreign-born workers will no doubt be intrigued by the idea of tamper-resistant visas. Steven Names, CFO of Sendik's Food Market, a grocery-store chain in Wisconsin that employs Latin American immigrants, says he is in favor of digitized documentation. "I would be fine with an electronic system," he notes, "assuming it would absolve me of liability by using it."

But some legislators want to go further. They want to mandate the use of an electronic system to check the Social Security numbers of new hires — and, eventually, all current employees. The result, of course, is that many businesses would lose part of their workforce. Without a supply of ready replacements, companies would have to pay more to attract laborers. "It would raise costs," predicts a CFO at a Florida-based agricultural company. "That would make it more difficult for us to compete in the global market."

The electronic setup would be an expansion of a pilot project being run by Immigration and Customs Enforcement (ICE), the successor agency to the Immigration and Naturalization Service (INS). That tool allows employers to submit Social Security numbers online and check them against a database.

To date, only 4,000 companies have signed on to use the system. Critics claim the electronic database is fraught with errors. And the EWIC's Reiff argues that it doesn't get at the problem of fraudulent documents, "since you can use a dead person's or a child's Social Security card, or buy a Social Security number." And, in fact, businesses have reported cases where legitimate employees have been flagged as illegal.

Bugs notwithstanding, Krikorian predicts the government will adopt an electronic ID system sooner or later. "It's in the interest of employers to enroll [in the pilot program] now and get used to it," advises Krikorian. "It's going to be rammed down their throats at some point."

Hire and Hope
Perhaps. Until then, many employers will continue to hire foreign-born workers and hope they're legal. Experts believe that undocumented employees now make up fully 5 percent of the U.S. workforce. In some labor-intensive industries, the use of undocumented workers is much higher. The Pew Hispanic Center estimates, for example, that undocumented workers now make up 13 percent of the workforce in the hotel industry.

Some employers may feel they have little choice but to turn a blind eye to the hiring of undocumented workers. Many are already reporting difficulties in finding homegrown workers, particularly businesses in the Midwest. The shortages are going to get worse, too. According to the Bureau of Labor Statistics, 76 million people will exit the workforce over the next 25 years, leaving yawning employment gaps across a range of sectors.

Doris Ruiz, the owner of Olen Staff Co., a Minneapolis staffing firm that supplies the region's businesses with mostly immigrant workers, sees strong demand from employers. "I keep hearing the same thing from companies in towns where the labor pool is shrinking or nonexistent," she says. "They say, 'We're losing business. We don't have the hands to go after those contracts.'"

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