Is Your Company E-Verify Compliant?

by Poyner Spruill LLP
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In June 2011, North Carolina joined the ranks of an increasing number of states requiring the use of E-Verify. E-Verify is a free Internet-based system that allows employers to determine employment authorization by checking an employee’s documentation against Department of Homeland Security (DHS) and Social Security Administration (SSA) databases. It applies to certain federal contractors but is also being adopted and required by states, regardless of whether federal contracts are involved.

North Carolina Now Requires Most Private Employers to Enroll in E-Verify

North Carolina counties, cities and public universities have already been required to register and participate in E-Verify since October 1, 2011. Private sector employers’ participation in E-Verify is being phased in more slowly, according to the employer’s size:

  • Employers with 500 or more employees were required to participate by October 1, 2012;
  • Employers with 100 or more employees will be required to participate by January 1, 2013; and
  • Employers with 25 or more employees will be required to participate by July 1, 2013.

E-Verify Primer for Federal Contractors

Private businesses in North Carolina are required to verify the employment eligibility of current employees, regardless of the above phased-in legislation, if the employer has been awarded a federal contract on or after September 8, 2009, that contains the Federal Acquisition Regulation (FAR) E-Verify clause. Such federal contractors must enroll in E-Verify within 30 days of the contract award date regardless of the business’ size. After enrollment, the federal contractor has 90 days to use E-Verify. The federal contractor must then use E-Verify for new hires within three business days of the employee’s start date.

E-Verify must also be used for existing employees assigned to work on the federal contract within 90 days of the federal contract being awarded or within 30 days of the employee’s assignment to work on the federal contract, whichever is later. For existing employees to be required to be run through E-Verify, the employee must perform substantial work under the federal contract, which does not include administrative or clerical functions. There are a few exceptions to enrolling in E-Verify as a federal contractor, the main one being if the federal contract pertains to commercially available off the shelf items.

Unless the subcontractor is a supplier and not subject to the E-Verify federal contractor rule, a federal contractor is required to ensure that its subcontractors enroll in and use E-Verify if:

  • The prime contract includes the FAR E-Verify clause;
  • The subcontract is for commercial or noncommercial services or construction;
  • The subcontract has a value of more than $3,000; or
  • The subcontract includes work performed in the United States.

A Few Important Rules for Every Business Enrolled in E-Verify

  • Post the notices that the business is now enrolled in E-Verify alongside antidiscrimination notices by the Office of Special Counsel for Immigration-Related Unfair Employment Practices.
  • When completing the I-9 form, the employee’s choice of a List B document must contain a photograph in order to be run through E-Verify.
  • Do not use E-Verify selectively.
  • Do not use E-Verify to prescreen job applicants; it is used post-hiring.
  • Do not ask for additional documentation in the event of a “Tentative Nonconfirmation” by E-Verify, but allow the employee time to correct any error by visiting the local SSA office.
  • Do not terminate or take adverse action against an employee who receives a tentative nonconfirmation, but allow them time to correct the error.

Penalties, Federal- and State-Imposed

There have been substantial fines levied for immigration-related offenses by Immigration and Customs Enforcement (ICE) against employers enrolled in E-Verify, proving enrollment in E-Verify will not save an employer from potential violations.

Civil penalties for violations of North Carolina’s E-Verify law are assessed by the NC Commissioner of Labor and range from $1,000 to $10,000.

E-Verify Link

Unless already enrolled in E-Verify as a federal contractor or subcontractor or having elected to do so on a voluntary basis, private sector North Carolina employers with 25 or more employees should not delay in visiting E-Verify website and enrolling by the mandatory enrollment dates listed above at http://www.uscis.gov/portal/site/uscis/menuitem.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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