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Title II — Ending Unlawful Employment

H.R. 830 · 113th Congress · Feb 26, 2013 · Lineage

II Ending Unlawful Employment

A Employee Verification

Sec. 201 Mandatory employment authorization verification

(a)
Making E-Verify Program permanent— Section 401(b) of the Illegal Immigration Reform and Immigrant Responsibility Act of 1996 (8 U.S.C. 1324a note) is amended by adding before the period at the end of the last sentence the following “, except that the E-Verify Program described in section 403(a) shall be a permanent program”.
(b)
Mandatory use of E-Verify system—
(1)
In general— Subject to paragraphs (2) and (3), every person or other entity that hires one or more individuals for employment in the United States shall verify through the E-Verify Program, established by section 403(a) of the Illegal Immigration Reform and Immigrant Responsibility Act of 1996 (division C of Public Law 104–208; 8 U.S.C. 1324a note), that each such individual is authorized to work in the United States. The Secretary of Homeland Security shall ensure that verification by means of a toll-free telephone line is an available option in complying with the preceding sentence.
(2)
Select entities required to use e-verify program immediately— The following entities must satisfy the requirement in paragraph (1) by not later than one year after the date of the enactment of this Act:
(A)
Federal agencies— Each department and agency of the Federal Government.
(B)
Federal contractors— A contractor that—
(i)
has entered into a contract with the Federal Government to which section 2(b)(1) of the Service Contract Act of 1965 (41 U.S.C. 351(b)(1)) applies, and any subcontractor under such contract; or
(ii)
has entered into a contract exempted from the application of such Act by section 6 of such Act (41 U.S.C. 356), and any subcontractor under such contract.
(C)
Large employers— An employer that employs more than 250 individuals in the United States.
(3)
Phasing-in for other employers—
(A)
Two years for employers of 100 or more— Entities that employ 100 or more individuals in the United States must satisfy the requirement in paragraph (1) by not later than two years after the date of the enactment of this Act.
(B)
Three years for employers with 30 or more employees— All entities that employ 30 or more individuals in the United States must satisfy the requirement in paragraph (1) by not later than three years after the date of the enactment of this Act.
(C)
Four years for all employers— All entities that employ one or more individuals in the United States must satisfy the requirement in paragraph (1) by not later than four years after the date of the enactment of this Act.
(4)
Verifying employment authorization of current employees— Every person or other entity that employs one or more persons in the United States shall verify through the E-Verify program by not later than four years after the date of the enactment of this Act that each employee is authorized to work in the United States.
(5)
Defense— In accordance with section 274A(a)(3) of the Immigration and Nationality Act (8 U.S.C. 1324a(a)(3)), a person or entity that establishes that it has complied in good faith with the requirements of section 274A(b) of such Act with respect to the hiring, recruiting, or referral for employment of an alien in the United States has established an affirmative defense that the person or entity has not violated section 274A(a)(1)(A) of such Act with respect to such hiring, recruiting or referral. Furthermore an employer who has complied with the requirements in paragraphs (1) and (4) of this Act shall not be liable for hiring an unauthorized alien, if—
(A)
such hiring occurred due to an error in the E-Verify program that was unknown to the employer at the time of such hiring; and
(B)
the employer terminates the employment of the alien upon being informed of the error.
(6)
Sanctions for noncompliance— The failure of an employer to comply with the requirements in paragraphs (1) or (4) shall—
(A)
be treated as a violation of section 274A(a)(1)(B) with respect to each offense; and
(B)
create a rebuttable presumption that the employer has violated section 274A(a)(1)(A).
(7)
Voluntary participation of employers not immediately subject to requirement— Nothing in this subsection shall be construed as preventing a person or other entity that is not immediately subject to the requirement of paragraph (1) pursuant to paragraph (2) or (3) from voluntarily using the E-Verify program to verify the employment authorization of new hires or current employees.
(8)
State interference— No State may prohibit a person or other entity from using the E-Verify program to verify the employment authorization of new hires or current employees.
(9)
E-Verify study—
(A)
Findings— The Congress finds as follows:
(i)
A majority of the 0.4 percent of tentative non-confirmations that are issued within E-Verify to work authorized individuals occur due to incorrect or outdated information in the databases utilized by the system. For instance, an individual may have changed his or her name legally but has not updated their Social Security information to account for this change. This person would likely receive a tentative non-confirmation if their work eligibility were checked using E-Verify.
(ii)
E-Verify already provides employers and employees with simple and clear instructions on how inconsistencies in data can be corrected in order to verify the work eligibility of an employee. However, giving an individual the ability to verify his or her own employment eligibility in advance of an official E-Verify query by an employer would allow that individual to correct data errors at his or her convenience. This may also serve to lessen peak demand on Social Security Administration field offices.
(B)
Study— The Government Accountability Office shall conduct a study to examine the potential of a secure method of allowing individuals to check their own work eligibility, so that they can address inconsistencies in their personal data that might otherwise cause them to be issued a tentative non-confirmation by E-Verify. The study shall be published within 6 months after the date of enactment of this Act.
(10)
Document fraud study— The Government Accountability Office shall conduct a study to examine methods to combat document fraud, theft and forgery in the use and expansion of the E-Verify program. The report shall make recommendations to the appropriate agencies on ways to reduce instances of document fraud, theft and forgery. The report shall be published within six months after enactment of this Act.

Sec. 202 Monitoring and compliance

(a)
Enhancing Monitoring and Compliance of E-Verify— The Secretary of the Department of Homeland Security is authorized take the following actions to increase the capability and effectiveness of the E-Verify employer Monitoring and Compliance team within Citizenship and Immigration Services:
(1)
Increase by no more than 6 the number of fulltime employees dedicated to the development of thresholds and algorithms and quality assurance procedures for the monitoring of employer adherence to the conditions that are currently outlined in the E-Verify Memorandum of Understanding.
(2)
Increase as necessary the number of fulltime employees dedicated to outreach to employers using E-Verify and the creation of informational tools and corrective action procedures that will provide compliance assistance to these employers. These employees may also be utilized in the operation of the toll free compliance assistance call center.
(3)
Establish procedures for the identification of cases of potential fraud or misuse of E-Verify.
(4)
Establish procedures for the sharing of information on these selected cases with Immigration and Customs Enforcement for further investigation as necessary.
(5)
Report to Congress within one year of the date of enactment of this Act on the activities of the Office of Monitoring and Compliance which shall include—
(A)
a description of the types of fraud and misuse being detected by the thresholds and algorithms used for employee monitoring within the Office;
(B)
the number and type of cases flagged by the Office and referred to Immigration and Customs Enforcement, as well as the outcome of these cases; and
(C)
an assessment of the number and the nature of calls received by the compliance assistance call center.

Sec. 203 Mandatory notification of SSN mismatches and multiple uses

(a)
Notification of multiple uses of individual Social Security numbers— Prior to crediting any individual with concurrent earnings from more than one employer, the Commissioner of Social Security shall notify the individual that earnings from two or more employers are being reported under the individual’s Social Security account number (SSN). Such notice shall include, at a minimum—
(1)
the name and location of each employer reporting benefits for an individual;
(2)
a warning that any inaccuracies in this information could indicate that the individual’s SSN is being fraudulently used by another individual;
(3)
an explanation of any potential risk that an individual is subject to if his or her SSN has been used or is being used by someone else; and
(4)
an SSA telephone number that an individual may call to report inaccuracies in the use of their SSN.
(b)
Information sharing with the Department of Homeland Security—
(1)
Not later than 180 days following the date of enactment of this act, the Commissioner of Social Security shall promulgate regulations in accord with section 1306, title 42 (42 U.S.C. 1306), to require that information regarding all multiple use notifications that lead to the identification of an unauthorized user of a Social Security account number be shared with the Secretary of the Department of Homeland Security on a timely basis.
(2)
Information to be shared with the Secretary shall include, at a minimum, the name and mailing address of all employees who are the subject of an unresolved mismatch notification or who are unauthorized users of another individual’s Social Security account number. The names and addresses of the employers of these employees must also be provided.
(3)
The Secretary shall report to the Congress annually the number of cases that the Commissioner of Social Security has shared with the Department of Homeland Security regarding unauthorized users of a Social Security number and the actions that have been taken to resolve these cases. The first report shall be presented to Congress 1 year after the passage of this Act.

Sec. 204 Establishment of electronic birth and death registration systems

In consultation with the Secretary of Health and Human Services and the Commissioner of Social Security, the Secretary shall take the following actions:
(1)
Work with the States to establish a common data set and common data exchange protocol for electronic birth registration systems and death registration systems.
(2)
Coordinate requirements for such systems to align with a national model.
(3)
Ensure that fraud prevention is built into the design of electronic vital registration systems in the collection of vital event data, the issuance of birth certificates, and the exchange of data among government agencies.
(4)
Ensure that electronic systems for issuing birth certificates, in the form of printed abstracts of birth records or digitized images, employ a common format of the certified copy, so that those requiring such documents can quickly confirm their validity.
(5)
Establish uniform field requirements for State birth registries.
(6)
Not later than 1 year after the date of the enactment of this Act, establish a process with the Department of Defense that will result in the sharing of data, with the States and the Social Security Administration, regarding deaths of United States military personnel and the birth and death of their dependents.
(7)
Not later than 1 year after the date of the enactment of this Act, establish a process with the Department of State to improve registration, notification, and the sharing of data with the States and the Social Security Administration, regarding births and deaths of United States citizens abroad.
(8)
Not later than 3 years after the date of establishment of databases provided for under this section, require States to record and retain electronic records of pertinent identification information collected from requestors who are not the registrants.
(9)
Not later than 6 months after the date of the enactment of this Act, submit to Congress a report on whether there is a need for Federal laws to address penalties for fraud and misuse of vital records and whether violations are sufficiently enforced.

Sec. 205 Penalty for failure to file correct information returns

(a)
In general— Section 6721 of the Internal Revenue Code of 1986 (26 U.S.C. 6721) is amended by adding at the end the following:

“(g) Most egregious noncompliant employers—The Secretary shall assess the maximum allowable penalties on 100 percent of the employers designated in any tax year by the Social Security Administration as the most egregious noncompliant employers.

“(h) Employment of alien not authorized To be employed—Notwithstanding any other provision in this section, in the case of a failure described in subsection (a)(2) with respect to any person employing an alien not authorized to be so employed, the penalty under this section shall be determined in accordance with the following table:”

(b)
Effective date— The amendment made by subsection (a) shall apply to with respect to information returns required to be filed for years beginning after December 31, 2012.

Sec. 206 Authorization of appropriations

There are authorized to be appropriated such sums as may be required to carry out this subtitle.

B Nondeductibility of Wages Paid to Unauthorized Aliens

Sec. 211 Clarification that wages paid to unauthorized aliens may not be deducted from gross income

(a)
In general— Subsection (c) of section 162 of the Internal Revenue Code of 1986 (relating to illegal bribes, kickbacks, and other payments) is amended by adding at the end the following new paragraph:

“(4) Wages paid to or on behalf of unauthorized aliens

“(A) In general—No deduction shall be allowed under subsection (a) for any wage paid to or on behalf of an unauthorized alien, as defined under section 274A(h)(3) of the Immigration and Nationality Act (8 U.S.C. 1324a(h)(3)).

“(B) Wages—For the purposes of this paragraph, the term wages means all remuneration for employment, including the cash value of all remuneration (including benefits) paid in any medium other than cash.

“(C) Safe harbor—If a person or other entity is participating in the E-Verify Program described in section 403 of the Illegal Immigration Reform and Immigrant Responsibility Act of 1996 (8 U.S.C. 1324a note) and obtains confirmation of identity and employment eligibility in compliance with the terms and conditions of the program with respect to the hiring (or recruitment or referral) of an employee, subparagraph (A) shall not apply with respect to wages paid to such employee.”

(b)
Six-Year limitation on assessment and collection— Subsection (c) of section 6501 of such Code (relating to exceptions) is amended by adding at the end the following new paragraph:

“(12) Deduction claimed for wages paid to unauthorized aliens—In the case of a return of tax on which a deduction is shown in violation of section 162(c)(4), any tax under chapter 1 may be assessed, or a proceeding in court for the collection of such tax may be begun without assessment, at any time within 6 years after the return was filed.”

(c)
Use of documentation for enforcement purposes— Section 274A of the Immigration and Nationality Act (8 U.S.C. 1324a) is amended—
(1)
in subparagraph (b)(5), by inserting “, section 162(c)(4) of the Internal Revenue Code of 1986,” after “enforcement of this Act”;
(2)
in subparagraph (d)(2)(F), by inserting “, section 162(c)(4) of the Internal Revenue Code of 1986,” after “enforcement of this Act”; and
(3)
in subparagraph (d)(2)(G), by inserting “section 162(c)(4) of the Internal Revenue Code of 1986 or” after “or enforcement of”.
(d)
Availability of information—
(1)
In general— The Commissioner of Social Security, the Secretary of the Department of Homeland Security, and the Secretary of the Treasury, shall jointly establish a program to share information among such agencies that may or could lead to the identification of unauthorized aliens (as defined under section 274A(h)(3) of the Immigration and Nationality Act), including any no-match letter, any information in the earnings suspense file, and any information in the investigation and enforcement of section 162(c)(4) of the Internal Revenue Code of 1986.
(2)
Disclosure by Secretary of the Treasury—
(A)
In general— Subsection (i) of section 6103 of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

“(9) Payment of wages to unauthorized aliens—Upon request from the Commissioner of the Social Security Administration or the Secretary of the Department of Homeland Security, the Secretary shall disclose to officers and employees of such Administration or Department—

“(A) taxpayer identity information of employers who paid wages with respect to which a deduction was not allowed by reason of section 162(c)(4), and

“(B) taxpayer identity information of individuals to whom such wages were paid, for purposes of carrying out any enforcement activities of such Administration or Department with respect to such employers or individuals.”

(B)
Recordkeeping— Paragraph (4) of section 6103(p) of such Code is amended—
(i)
by striking “(5), or (7)” in the matter preceding subparagraph (A) and inserting “(5), (7), or (9)”, and
(ii)
by striking “(5) or (7)” in subparagraph (F)(ii) and inserting “(5), (7), or (9)”.
(e)
Effective date—
(1)
Except as provided in paragraph (2), this Act and the amendments made by this Act shall take effect on the date of the enactment of this Act.
(2)
The amendments made by subsections (a) and (b) shall apply to taxable years beginning after December 31, 2013.