Committee hears bill to require E-Verify for new hires; debate centers on small‑business burdens and enforcement

Representative Shaw introduced a proposed committee substitute for House Bill 3725 and told the committee it would require employers statewide to use E‑Verify or a federal equivalent when hiring new employees to verify they are lawfully present and authorized to work.

Shaw said the PCS includes a rollout plan, fines for noncompliance and protections for employers acting in good faith, and a trigger repeal that would halt enforcement if the federal E‑Verify system changes its scope or adds data points beyond workforce authorization. "There's a rollout plan, fines for noncompliance, but protections for employers acting in good faith that may encounter a simple administrative error," he told the committee.

In presenting the bill, Shaw cited several data points to support his policy aim. He referenced nationwide estimates and studies, saying, for example, "according to Pew Research, there were an estimated 14,000,000 illegal immigrants living in The United States" and invoking a 2016 study he said found the number of newly arrived unauthorized workers fell nearly 50% when a state implemented mandatory E‑Verify.

Several members questioned whether the requirement would be a practical or financial burden on small businesses. "I need you to explain to me more how this is not a financial burden on these small businesses," one lawmaker said, citing family farms and small local employers that typically operate on thin margins. Shaw replied that initial setup "typically takes less than 1 hour" and that subsequent verifications take only a few minutes, and he emphasized the bill's protections for employers who follow the verification process.

Members also raised concerns about error rates, identity theft and enforcement capacity. One member noted reports tying Arizona's implementation to identity‑theft complaints and asked how the PCS would address that. Shaw said E‑Verify is a verification tool tied to information on the federally required I‑9 form and is not designed to prevent identity theft; he offered to work with colleagues on separate measures that would address identity‑theft risks.

Lawmakers questioned which state agency would enforce the requirement and whether the Department of Labor is equipped to do so; Shaw said the bill designates the Department of Labor for enforcement and that implementation materials (training, guidance and a website) would be provided. He also said he had been contacted by the Department of Labor and that that contact did not indicate a fiscal impact to the department.

On how the committee should handle disruptions if the federal E‑Verify system were to go offline or change, Shaw said he would file language to ensure hiring is not disrupted during outages and pointed to the bill's trigger‑repeal mechanism. "If they manipulate E‑Verify at all ... there's an immediate halt of enforcement," he said.

No motion was made to advance House Bill 3725 during the hearing; the chair noted "seeing no motion on the bill" and declared it the committee's property for further work. Shaw told members he planned to file amendments to address the outage scenario and other concerns raised during questioning.