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Niche businesses spring up from new legal status laws

Bryan Mehr, owner of an International House of Pancakes restaurant in Glendale, is among the business owners who have decided to hire registered agents to use the federal government's E-Verify system, a Web-based program that electronically checks the employment eligibility of newly hired employees.

Bryan Mehr, owner of an International House of Pancakes restaurant in Glendale, is among the business owners who have decided to hire registered agents to use the federal government's E-Verify system, a Web-based program that electronically checks the employment eligibility of newly hired employees.

Bryan Mehr was more than willing to comply with Arizona’s new employment law and use a federal government system to ensure his new employees were legally eligible to work.

Still, the restaurant operator figured he knew more about pancakes than paperwork, so he hired a small company to check if the applicants were legal residents.

“We felt if we were doing it ourselves there would be mistakes made,” said Mehr, who runs an International House of Pancakes franchise at Glendale in the Phoenix area. “I have enough to do with managing employees and taking care of guests.”

Employment laws around the country have spawned a cottage industry of agents who use a government system to check whether prospective employees are legally in the United States.

The federal government’s E-Verify system is free but agents say businesses are willing to pay a fee to have someone help them with government regulations.

The use of E-Verify will widen because President Bush signed an executive order this month that follows the lead of 11 states in requiring contractors that do business with the government to use the system.

States that have required contractors to use E-Verify include Arizona, Colorado, Georgia, Idaho, Minnesota, Mississippi, Missouri, Oklahoma, Rhode Island, South Carolina and Utah.

Arizona also requires all employers in the state to use the system.

The U.S. Citizenship and Immigration Service, part of the Department of Homeland Security, operates E-Verify in partnership with the Social Security Administration.

It’s a Web-based program that electronically checks the employment eligibility of newly hired employees.

More than 69,000 employers rely on E-Verify, according to the Department of Homeland Security.

Some registered agents say they use licensed software that allows them to quickly use the E-Verify system and then electronically store the data for businesses. The agents promise employers that they will deal with the government if there are problems getting verified.

For small operators, who charge up to $10 per query, the business quickly adds up.

Mike Coffey, who runs Imperative Information Group in Fort Worth, Texas, said employers are relying on him because “the E-Verify system is not easy to use.”

Marie Sebrechts, a spokeswoman with the U.S. Citizenship and Immigration Services, said it should take just 15 minutes for an employer to go through the E-Verify tutorial and use the program.

Julie Pace, a Phoenix immigration lawyer that specializes in the employer-sanctions law, said she is not surprised companies are using registered agents, because the agents have a lower level of accountability in using E-Verify.

Employers that use E-Verify are required to check photos of authorized noncitizens on a government database, but registered agents are not subject to that requirement, Pace said.

Also, agents do not have to make photocopies of documents and keep them, she said.

“We are all baffled the government would come out with two sets of standards,” Pace said.

Pace said the cost of using agents, which could reach thousands of dollars for some businesses, ultimately will be passed on to consumers.

U.S. Citizenship and Immigration Services, which tracks the number of employers that have used E-Verify, didn’t have a precise figure of registered agents.

Pace’s firm, Ballard, Spahr, Andrews & Ingersoll, which specializes in labor and immigration law, estimates there are roughly 12 million workers without papers in the United States.

Immigration has been a hot issue in Congress, but lawmakers have not passed any substantive measures.

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