Iowa employers could face loss of their state licenses if they employ undocumented workers under a bill approved by a legislative subcommittee Monday.

Senate File 84 drew opposition from business organizations, advocates for immigrants and at least one immigration lawyer before the subcommittee sent the bill to the Senate Judiciary Committee. Republican Sens. Julian Garrett of Warren County and Jason Schultz of Schleswig voted in favor, while Democrat Kevin Kinney of Oxford opposed the measure.

The legislation would make it a crime to knowingly employ an undocumented worker, which the bill refers to as “unauthorized alien employee.” Law officers, county attorneys and members of the public could file a complaint with Iowa Workforce Development, which would consider action in district court.

A first offense would force the employer to fire all undocumented workers, and serve three years of probation at the business location. The business would have to file quarterly reports proving each new employee was in the country legally, and promising not to hire any more undocumented workers. If they don’t file a sworn affidavit meeting those requirements, the state could move to suspend their business licenses. The bill sets out ways first offenders could get their licenses back.

Second offenses could mean permanent loss of state licenses.

Schultz said he understands the measure would be an “additional mandate on businesses,” but he sees it as a way to prevent employers from having an unfair competitive advantage by employing undocumented workers while others don’t.

“I see it as a leveling of the playing field opportunity,” Schultz said. “We have some who are doing their best to comply with employer law, immigration law. And we have folks who are flouting the law, and just ignoring it, and they’re getting away with it, with a competitive advantage they should not have.”

Garrett, one of the lawmakers who introduced the bill, said more than 5,000 Iowa businesses use E-Verify, a prominent verification service. Garrett said business leaders have told him the system is easy to use and has a “very, very small number of errors.”

Garrett added that E-Verify said 98% of questions are resolved in favor of clearing the worker for employment in the United States. He added that he wants to address what he agrees is an unfair advantage for businesses employing undocumented workers.

Kinney said he opposed the measure because the verification system often is inaccurate.

Seven members of the public who spoke at Monday’s subcommittee meeting opposed the measure; no one other than the senators spoke in favor of it.

Karl Schilling, representing labor unions, said the legislation is ill-timed as the Biden administration moved to give undocumented workers a path to citizenship. Those workers, Schilling said, are critical to the economy.

“It appears that they may be on the verge of a path to citizenship,” said Schilling, appearing on behalf of the United Electrical Workers and United Professionals. “It seems that as this process is just beginning to happen, to jerk away their opportunities for employment … is bad timing. It’s unintentionally cruel.”

Rita Carter of the Iowa United Methodist Church advocacy team said the Methodist conference opposes the bill in part because many of the workers don’t have the resources to fight the documentation requirements.

Tom Chapman, representing the Iowa Catholic Conference, said his organization also opposes the bill. Chapman said the bill would affect all businesses, putting them in danger of losing workers to false E-Verify results.

Dustin Miller, executive director of the Iowa Chamber Alliance, agreed with several other speakers that any verification system should be laid out in federal law rather than state by state. Miller said the prospects of errors in verification systems that could lead to penalties also worry businesses.

In addition, Miller said, the legislation as written would allow citizens to file complaints. “That’s a big concern,” he said. “That can really be used as a sword against competitors.”

Laura Hessburg of the Iowa Coalition Against Domestic Violence said immigrants are helping to save Iowa’s small cities, where workers are scarce. “Immigrants are fueling our economy right now,” she added, opposing the bill.

Des Moines immigration lawyer Lori Chesser said the verification systems are confusing and cumbersome to many. “We shouldn’t underestimate the burden that this would be on small businesses,” Chesser said. “It’s just a really hard thing to comply with. I know the federal government will tell you otherwise, but I see the problems with it every day in my practice,” she said of the verification systems.

Iowa legislation could strip licenses from firms that employ undocumented workers