President Obama's executive order is an undesirable way to jump-start immigration reform, but it may help provoke Congress to make the badly needed legislative overhaul. Taking up to five million undocumented immigrants out of the shadows would accomplish a lot; however, an even greater good and more permanent reform could begin by picking up on the immigration bill S.774, as the president said in his nationally televised address. Although it never came to a vote in the House, the Senate bill is still the best place to start. Embedded in S.744 are compliance burdens and construction- industry risks about which relatively little has been written.

S.744, which the Senate passed, requires all employers within five years to use the E-Verify internet-based system to determine a worker's legal status. Using E-Verify, employers would have to compare the information from an employee's I-9 form, which companies create from information provided by the worker, with U.S. records. Some states already require employers to use E-Verify, but only 7% of U.S. employers were enrolled as of last year.

Mandatory national use of E-Verify would help to establish federal preemption over the patchwork of state immigration laws and verification methods—an important improvement.

Potential Penalties

Onerous penalties for inadvertent errors are another concern in a system that relies on I-9 forms and E-Verify. Under S.744, employers who are repeat offenders would be subject to civil fines of up to $25,000 per violation for hiring unauthorized immigrants. The possible criminal penalties include two years of jail time for repeatedly hiring unauthorized workers, in addition to fines of up to $10,000. According to the Immigration Policy Center's summary of the bill, employers that make mistakes in good faith won't be penalized.

Excuse us for being skeptical, but decisions about good faith have been litigated numerous times in recent years as the Obama administration escalated the I-9 form audits to more than 3,000 a year from about 500. The problems arise because assessments of "good faith" in record-keeping mistakes are subject to interpretation. Sometimes penalties result from an unchecked box on an official form. In one case, decided in 2012, federal officials proposed a penalty of $86,000 against a construction contractor. An administrative law judge found 103 violations altogether but assessed a penalty of only $17,000.

Instead of a power struggle between the executive and legislative branches, we should be discussing what constitutes fair enforcement. A tussle over the president's order promises lots of divisive political drama and a wasteful delay when what we need is a conversation about true comprehensive reform.