An increasing number of state and local governments are implementing or considering laws that will make it mandatory for employers to check the information supplied by applicants on I-9 forms against the database of the federal E-Verify system. Small business consultants consequently advise employers to be aware of current or impending state and local E-Verify requirements where they do business.
At the very least, these laws will require businesses to spend time enrolling in and learning the E-Verify system, in addition to creating some additional bookkeeping chores going forward. The worst case, in some jurisdictions, will be imposition of serious sanctions against businesses for employing persons not legally authorized to work in the United States.
E-Verify is a free, internet-based system run jointly by the Social Security Administration (SSA) and U.S. Citizenship and Immigration Services (USCIS), an agency of the Department of Homeland Security. E-Verify cross-checks data from applicants’ federal Form I-9, Employment Eligibility Verification, to make sure that the information and any documents supplied to support it are not fraudulent. For example, E-Verify compares an applicant’s name, date of birth and Social Security number against information in the SSA database to ensure that they match existing records.
The use of Form I-9 in the hiring process was mandated by federal immigration reform legislation that was passed in 1986, but there was no way at that time for employers to easily verify the information that applicants supplied. The pilot program for E-Verify was not started until 1997, after the advent of the Internet. Although it was an entirely voluntary program at its inception, by 2007 new regulations had been put into effect requiring federal agencies and most federal government contractors to use E-Verify.
In 2008, Arizona became the first state to require use of E-Verify by all employers. The Arizona law provides for the revocation of the business license of anyone who knowingly employs persons unauthorized to work in the U.S. In May of last year, the constitutionality of the Arizona law was upheld by the Supreme Court.
Other states requiring the use of E-Verify by most employers include Alabama, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee and Utah. Public employers are required to use E-Verify in Florida, Idaho, Indiana, Missouri, Nebraska and Virginia, while E-Verify is mandated for public contractors in Colorado, Minnesota and Oklahoma. Georgia requires E-Verify enrollment for both public employers and public contractors, with requirements for private employers phasing in this year. The state legislature in Kentucky will consider broad E-Verify legislation in its 2012 session. Individual counties and cities have imposed local E-Verify requirements in Michigan, New York, Oregon, Pennsylvania and Washington. It’s worth noting that some of these laws exempt the smallest businesses and/or those holding relatively small government contracts.
On the other end of the spectrum, a California law passed in the last quarter of 2011 states that local governments cannot require the use of E-Verify, which rendered null and void more than a dozen city and county E-Verify laws in that state. And at one time, the state of Illinois specifically prohibited employers from enrolling in E-Verify. The Illinois law has since been rescinded, leaving up to employers the decision whether or not to use the system.
However, with an overall trend toward more states considering various kinds of immigration-related legislation, it’s quite likely that more laws mandating use of E-Verify will come into force. Often these laws are opposed by unusual coalitions of business groups and immigrants’ rights advocates. Business leaders often express concern about the costs and paperwork burden imposed on business owners by any widening of the scope of employment verification measures. The uncertainty of the current situation complicates financial planning for small business owners.
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