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Will the Restaurant Industry Survive Stricter Immigration Screenings?

Last week, news that 30 employees were unexpectedly terminated from Philadelphia's Vetri Family Restaurants chain shook the city's restaurant world. Unlike most employees, who are generally fired for not showing up to work on time or doing a bad job, these longtime Vetri staffers inadvertently found themselves in the middle of the highly political immigration debate raging outside the kitchen.

When Vetri's restaurants were acquired by Urban Outfitters, its employees were required to re-submit to background checks that included a little-known screening process called E-Verify, which allows employers to determine a potential employee's legal status to work in the United States once they've extended them an offer of employment. As a result, the 30 employees who didn't pass those screenings were abruptly terminated.

Chef preparing food in restaurant kitchen
West End61 | Getty Images
Chef preparing food in restaurant kitchen

"It just sucks. But this is what America is. My grandfather left Italy when he was 17 years old, stowed away on a ship. He got here illegally," Vetri told Philly Magazine. "But now you have a different circumstance. You have second- and third-generation immigrants who have raised families here, and there's still no real road for them to get legal, even though they are the fabric of our society."

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It isn't just employees, though, who would be adversely impacted by tougher immigration screening practices — restaurants are also at risk. In response to Republican presidential front-runner Donald Trump's plan to deport undocumented immigrants, Anthony Bourdain alleged that "every restaurant in America would shut down" if that plan came to fruition.

As Vetri notes, the firing of these 30 employees is indicative of a much broader problem with the restaurant industry's labor force. As an industry heavily staffed by immigrants — roughly 10 percent of the overall workforce, many of whom are undocumented — the cloudy political climate surrounding immigration reform makes this issue incredibly important for restaurateurs. But how will the restaurant industry fare if E-Verify becomes mandatory?

To get a clear picture of this intensely partisan and convoluted issue, it's important to examine the history of E-Verify and what it actually means for employers and employees in the restaurant industry, its potential benefits and drawbacks, and the impact that stricter screening practices could have on both the future of the industry and the people who work in food service.

What Is E-Verify?

The road to E-Verify as it is exists today starts in 1986, when President Ronald Reagan signed the Immigration Reform and Control Act. This comprehensive approach to immigration reform, the first ever of its kind, provided a pathway to citizenship for more than three million undocumented immigrants in the United States. Also tucked into the bill was a provision that required job-seekers to certify their eligibility to work in the United States by filling out the Employment Eligibility Form, or Form I-9, now a common part of the hiring process for virtually all American employers.

Once they have received the I-9, employers who are enrolled in E-Verify take the information provided by the potential employee and enter it into the online database. After the information has been submitted, E-Verify determines whether or not the employee is legally authorized to work in the United States and provides that information to the employer. The system can also produce what is called an "interim case result," which requires the employee to provide additional information to determine their work status before the system makes a final determination.

The first prototype of E-Verify, known originally as the Basic Pilot Program, was introduced as part of the Illegal Immigration Reform and Immigrant Responsibility Act of 1996. The rudimentary database originally only collected data from the Social Security Administration, which allowed employers to verify that a person's Social Security number, date of birth, and name matched government records. The E-Verify database technology has improved in the following two decades, and has since expanded to include information provided by the Department of Homeland Security.

E-Verify has always been a voluntary program, but a number of states have taken matters into their own legislative hands to require its implementation. At present, seven states (including Georgia, Arizona, and South Carolina) require that all employers use E-Verify, and 17 others require that at least some employees (generally those working in or with government agencies) are screened. In contrast, California legislators voted last year to limit the use of E-Verify for employers in the state, going so far as to impose a $10,000 fine on employers who "misuse" the system.

E-Verify and the restaurant industry

Marc Vetri isn't the only restaurateur who's had to contend with E-Verify. Restaurants are, not surprisingly, disproportionately impacted by enhanced screening procedures for immigrant workers. According to the Bureau of Labor Statistics, of the 12.7 million employees in the U.S. restaurant workforce, 1.4 million are immigrants. But how many of those workers are undocumented?

The data on undocumented workers is nigh impossible to track due to the off-the-books nature of their employment, but a 2008 analysis from the Pew Hispanic Center found that at least 20 percent of all cooks in American restaurants were undocumented employees. For dishwashers, generally the lowest-paid employees in a restaurant, that proportion increases to nearly one-third.

Considering the sheer number of undocumented workers in the restaurant business, it's no surprise that restaurateurs have largely avoided implementation of E-Verify. A 2013 study conducted by the National Restaurant Association in conjunction with Immigration Works USA found that just over 20 percent of restaurant operators were using the system. Restaurants that have opted in tend to be larger, chain operations with more than 1,000 employees. For restaurants with 50 employees or fewer, the adoption rate drops to about 15 percent.

A number of prominent chefs and restaurateurs have been vocal in their support for a path to citizenship for undocumented employees, including Jose Andres and Hugh Acheson. Bourdain may think that restaurants are "up a creek," but at least a few prominent restaurateurs have embraced E-Verify. Danny Meyer's Shake Shack burger chain is listed as an E-Verify employer by the U.S. Citizenship and Immigration Services, as is Wolfgang Puck's Los Angeles-based catering company. The National Restaurant Association also endorses E-Verify as a "key element of immigration reform."

E-Verify's proponents

Though the restaurant industry may not vocally support E-Verify, the program has a number of proponents outside of the industry. The most vocal of these proponents envision a federal law that mandates universal adoption. The Center for Immigration Studies, a self-described "low immigration, pro-immigrant" organization that has been associated with the anti-immigrant nativist movement, sees it as a foregone conclusion.

"I have no crystal ball, but it's coming at some point, in the next two, three, or five years," says Steven Camarota, lead demographer for the Center for Immigration Studies. "There's a pretty strong national consensus on that. Of anything in the immigration debate, everyone agrees that we have to have some kind of employer verification system." Whether or not that's true, there does seem to be a great deal of mounting support for the implementation of E-Verify on a national scale, especially from the candidates seeking to replace President Barack Obama this November.

Donald Trump's immigration platform includes support for a mandatory nationwide E-Verify roll-out, as does his closest challenger, Texas Senator Ted Cruz. Marco Rubio, an original sponsor of the 2013 bi-partisan "Gang of Eight" immigration reform bill that ultimately was not passed, has also emphatically touted his support for the program. On the Democratic side of the field, frontrunner Hillary Clinton has not announced an official policy position on the program, leading some immigration rights activists to criticize Clinton for her silence.

The concerns

Outside of the idea that E-Verify has the potential to put people who are willing to work out of a job, there are a number of concerns that surround its implementation. Jessie Hahn, a labor and policy attorney at the National Immigrant Justice Fund, is perhaps most concerned about E-Verify's potential to erroneously declare someone ineligible (or eligible) to work.

"We don't have super-recent data on the error rates of E-Verify because the most recent data was released in 2009, but based on that data, we were able to see the error rates in three categories," says Hahn. "The overall error rate for a false negative, which would mean that a person was not authorized to work, was 0.3 percent. When we ran that against the number of new hires across the country in 2014, that 0.3 percent amounted to 170,000 people who wouldn't be able to take a job offered to them because they're erroneously showing up in the database."

For immigrants, though, those error rates increase dramatically. According to Hahn, naturalized citizens (or Green Card holders) are four times more likely to be falsely identified as unauthorized to work. For work-authorized non-citizens, the error rate spikes more than 27 times. "Proponents will defend the program by saying that the error rate is really low, but that's too many people that have a job offer and aren't able to take it," says Hahn. "That's not a partisan issue — everyone wants to create more jobs."

The implications and likely outcomes

The affects that nationwide E-Verify roll-out could have on the restaurant industry are wide-ranging. "The agriculture industry is most frequently cited as the industry that would be devastated by a standalone E-Verify mandate," says Hahn. "But the restaurant industry is probably the other that has the highest proportion of immigrant workers." In her view, restaurants would likely not comply with E-Verify, choosing instead to simply take their workers off the book.

As evidence, Hahn points to Arizona, which enacted mandatory eVerify use for all employers in 2008. "Essentially what happened was that payroll tax revenues went down, but sales tax revenues went down very little," says Hahn. "What analysts concluded was that workers weren't paying income taxes, but they were still earning money to spend. The cash economy was growing because, obviously, people were still working, but they were being taken off the books and outside of the tax system."

She also notes that restaurants in Arizona simply chose not to comply, largely because there is no real enforcement of the law or harsh penalty for not following it. "There's already a big problem of off-the-books employment in the restaurant industry, so employers simply were not complying even though they were required to," says Hahn. "In that first year in Arizona, only one-third of the state's employers signed up. Plenty of unauthorized workers are still making it through the system, such that it's not effective at deterring its stated goal, which is to bring down unauthorized employment."

But in Caramota's view, E-Verify could spur restaurants to innovate their labor practices in some pretty fundamental ways. "You'll start to see employers implementing labor-saving techniques. They may buy bigger dishwashers to eliminate some positions and streamline their kitchen practices," he says. "You might also see a change in that you may have more quick-serve style restaurants where you don't need the same amount of bussers and waiters as you would in a traditional restaurant."

Ultimately, though, the consensus seems to be that E-Verify, if it should be included at all, should only be one small piece of comprehensive immigration reform legislation. In the aftermath of the firing of the 30 Vetri Family Restaurant employees, one immigrant kitchen worker told Philadelphia-based publication Billy Penn that if the system were implemented, it would force restaurants to "face the facts" about their undocumented employees.

"Before we see real change or reform, someone has to close down a restaurant or two because they don't have enough people to staff it," said the anonymous employee. "I can guarantee you many restaurants in Philadelphia would close [if it was implemented]. Probably they would reopen eventually, but not before it cost a lot of money. Everyone needs to bleed out first."

In reality, though, that's probably not going to happen any time soon. Most policy analysts agree that there is no viable immigration bill currently under consideration in Congress, and the general consensus is that there will be no change at least until after the next president is elected.

In the meantime, that leaves millions of employees across the country in jeopardy, and not just because of E-Verify. "The bigger picture is that [restaurant owners] should be supporting comprehensive immigration reform for their immigrant employees because that is what is going to solve this problem," says Hahn. "E-Verify is just biting around the edges."

—To read the original Eater post, click here.