March 2, 2011
Concerns regarding House Bill 3
Dear Senator,
We join a number of public interest and faith-based partners in expressing concern about House Bill 3.
Like them, we recognize that the overarching goals of E-Verify have merit. We also note, however, that
the use of E-Verify, in its current state, should not be mandated. Until the effects on the underground
economy and the issue of misclassification of workers are addressed, we believe the use of E-Verify
should remain optional. While we understand that this bill will not likely move in the Senate, Kentucky
Equal Justice Center would like to be on record in opposition of the bill.
Who WeAre
Kentucky Equal Justice Center is a non-profit civil legal services advocacy and research center. We
receive no funds from federal or state budgets. We convene periodic statewide task forces of attorneys,
paralegals, and public interest partners in six areas of poverty law: consumer, employment, family,
housing, immigration, and public benefits. We conduct policy advocacy and legal representation in each
of these areas.
In 2008, we became the administrative home of Maxwell Street Legal Clinic in Lexington, originally an
all volunteer community effort to provide help with immigration law to low-income immigrants and their
U.S. citizen family members. In the process of assisting immigrants with immigration-related matters, we
noted a trend of employment-related complaints. Since the Clinic was not equipped to manage both
immigration and employment law matters, we created a position for an employment law attomey.
In January 2010, we launched our newest initiative, the Bluegrass Employment Law Project. The
attomey assigned to this project assists employees that encounter problems in the workplace. While most
of the cases involve victims of wage theft, the contexts in which they most frequently arise include the
underground economy and those misclassified as “independent contractors.”
Unintended Employment C onsequences
On February 3, 2011 House Bill 3 was passed favorably out of the House Labor and Industry Committee.
The sponsor of the bill highlighted that House Bill 3 was the House response to the broken immigration
system. The bill is aimed at limiting the employment of “unauthorized aliens” — such that if unauthorized
persons cannot find work, fewer unauthorized persons will come in search of work.
While logical, this analysis ignores the fact that there is a huge mismatch between the process of legal
immigration and the market for workers. (We simply do not allow enough people to come legally. That
is why proposals for comprehensive immigration reform include provisions for expansion of temporary
work authorization.)
We believe that something entirely different might happen: the work available to undocumented workers
will not go away. In fact, it will go further underground, into a cash economy or extensive
misclassification by less scrupulous businesses of workers as independent contractors.
Unfortunately the implementation of E-V erify cannot prevent unscrupulous employers from attempting to
circumvent the system. In fact, it may encourage employers to move part or all of their production off-
the-books. This would result in loss of tax revenue to the state of Kentucky and, more importantly, it
would hurt Kentucky workers. The existence of an underground economy hurts Kentucky workers
because it lowers wages, hides jobs, and creates unsafe working conditions.
Similarly, less scrupulous employers may engage in the act of misclassification. Under the mandated E-
Verify system, an employer must complete an I-9 form for each employee to check identity and work
eligibility. If an employer chooses to 1099 an employee (i.e., considers them to be in business for
themselves), no I-9 form is completed on that worker. This practice harms workers because individuals
might mistakenly believe that they are employees and will therefore be working without worker’s
compensation. It also creates substantial loss to tax revenue (both federal, state, and local),
unemployment insurance funds, and worker’s compensation funds. Further, it produces an unfair playing
field, as employers who have fewer employees have less overhead and can therefore submit lower bids on
government projects than employers that are playing by the rules.
Finally, the implementation of House Bill 3 might render our Labor Cabinet ineffective. Currently ALL
workers are entitled to assistance from the Kentucky Labor Cabinet. This includes “unauthorized
aliens.” If E-Verify were mandated, workers may be fearful about exerting their rights under wage and
hour law or safety laws and will therefore remain quiet. By failing to report the actions of unscrupulous
employers, working conditions would worsen for undocumented workers and citizens in the state of
Kentucky.
Conclusion
Kentucky Equal Justice Center hopes that House Bill 3 will not advance in the Senate. However, if the
Senate decides to consider House Bill 3, we hope that you will note our objections. While we understand
that these potential consequences are likely unintended, we believe, based on our current work that they
are likely to occur. We therefore ask that you oppose the passage of House Bill 3. We appreciate your
attention in this matter.
Sincerely,
Richard J. Seckel, Director
Kentucky Equal Justice Center
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