Lawful Employment and Fiscal Accountability Act
A Policy Framework and Discussion-Draft Bill
- Type
- Policy framework and legislative discussion draft: the bottom line, the problem, the forty-year record, eight design rules, the bill title by title, why it holds up in court, how results will be measured, and the objections with answers; then the bill text (Annex A), sources and verification status (Annex B), the review record (Annex C), proposed values for bracketed inputs with conformity text (Annex D), and what the version 1.1 substitute changed with its open items. Not official U.S. government analysis and not the product of the Office of the Legislative Counsel.
- The problem
- The Immigration Reform and Control Act of 1986 made it unlawful to knowingly hire an unauthorized worker, then let a document that “reasonably appears on its face to be genuine” satisfy the employer’s check. A convincing counterfeit or a borrowed identity still does, so hiring unauthorized workers remains cheaper than hiring lawfully. Separately, most of the tax unauthorized workers pay goes to Washington, while states and counties carry the costs of schools, emergency rooms and jails.
- The evidence
- Arizona’s 2007 mandate cut the state’s working-age unauthorized population by about 17 percent and moved about 8 percentage points of likely unauthorized workers into self-employment, with no measurable employment gain for lawful low-skilled workers. Westat’s evaluation of 2008 queries estimated that about 54 percent of unauthorized workers run through E-Verify were confirmed as authorized, most of them on someone else’s identity.
- Cost
- Up to $1.6 billion a year for jails and $12 billion a year for schools and emergency care, for the first five full fiscal years after enactment, through a mandatory appropriation with pro-rata reduction when claims exceed a cap. Neither cap has been scored by the Congressional Budget Office.
- What it does not claim
- It does not claim to raise tax revenue or native wages, does not address removals or visas, and does not repeal Plyler v. Doe or EMTALA; it pays for those costs instead of shifting them.
- Revision history
- Version 1.1, 30 October 2026: the bill text of version 1.0 was replaced by the proposed substitute of 26 October 2026 and the framework updated to match. Every section was rewritten; Title IV is now capped grants and Title VII conditional employment authorization rather than registration; the full list is in the document. The new bill text was verified against primary sources on 30 October 2026; the eight earlier machine-assisted review rounds covered version 1.0 and are kept as the record of that version. No human expert or legislative counsel has reviewed either text. Version 1.0, 25 October 2026, was the publication version of working draft 0.6.
Title I, verified employment. Electronic employment verification becomes permanent for every new hire, phased in by employer size at 13, 25 and 37 months. Employers with fewer than 500 employees are covered only after the Comptroller General certifies the identity controls: photograph matching, an opt-in Social Security number lock, multiple-use alerts and correction procedures.
Title II, covered arrangements. The same verification applies to labor-contractor, staffing-agency and independent-contractor (1099) arrangements, with contractor liability, so the work cannot be moved off payroll to avoid it.
Title III, employer concentration reports. The Social Security Administration reports the employers that file the most wage reports it cannot credit to any worker, and Treasury uses the list for risk-based review. A mismatch is a lead, not a liability; any tax owed must be established on its own evidence.
Title IV, fiscal equalization. For five fiscal years, a supplemental incarceration grant capped at $1.6 billion a year and education and emergency-care formula grants capped at $12 billion a year, with pro-rata reduction when claims exceed a cap, no double payment, and a Comptroller General audit.
Title V, remedy parity. Wages for work performed are recoverable regardless of status. Where Hoffman Plastic bars back pay under the National Labor Relations Act, the Board may assess the employer an equal amount, payable to the Treasury rather than the worker.
Title VI, measurement. The Congressional Budget Office, with the Social Security Chief Actuary, reports every year for ten years on the Act’s fiscal and labor-market effects, measured separately for presence and formality; data baselines and a Comptroller General oversight report follow.
Title VII, contingent authorization. Conditional employment authorization for the existing workforce is in the bill but has no effect unless the CBO report finds off-payroll work up at least 5 percentage points beyond trend, and Congress then enacts a separate joint resolution approving it.
Seven predictions, each with a named data source and a stated failure condition. The framework measures separately what the Act does to unauthorized presence and to the formality of work, and who pays and who gains at each level of government.
Read the draft
What this draft does not establish
This is a discussion draft prepared for staff deliberation. It is not a bill introduced in Congress, it is not the product of the Office of the Legislative Counsel, and it is not official U.S. government analysis. Neither spending cap has a CBO score.
Population estimates are disputed and predate the 2025–26 decline. No national evidence exists on how well identity controls work, and native wage effects remain contested. Annex B states the verification status of each source. The verification of 30 October 2026 left open items, listed in the document; among them, the date through which E-Verify is currently authorized was not established from a primary source.
Nothing in this draft is legal advice or a substitute for counsel.
Suggested citation
George, Collin B. Lawful Employment and Fiscal Accountability: A Policy Framework and Discussion-Draft Bill. Legislative discussion draft LD-2026-06, version 1.1. Sanctir LLC, 30 October 2026.