On May 26, 2011, in Chamber of Commerce of the United States of America et al. v. Michael B. Whiting et al., 131 S.Ct. 1968 (2011), the Supreme Court of the United States upheld states’ rights to mandate use of the employment verification program (E-Verify) organized by the United States Department of Homeland Security (DHS) and Social Security Administration (SSA). As a result of this decision, the majority of states in and around the Spilman footprint have worked to enact legislation requiring its use. E-Verify is a free Internet-based system maintained by DHS through which employers can validate the employment eligibility of newly hired employees in a matter of seconds by electronically comparing the Form I-9 to records maintained by the DHS and SSA. If the information matches, the employee is deemed eligible to work in the United States. E-Verify will alert the employer if there is a mismatch that necessitates further examination.

North Carolina, South Carolina, Virginia and Tennessee have all passed legislation addressing the use of E-Verify for private and public employers based on varying conditions. Pennsylvania encourages use of the E-Verify program and has comparable legislation currently pending. Pa. SB 637, Reg. Sess. 2011-2012. West Virginia has introduced multiple bills (most recently on February 16, 2012) that would require the use of E-Verify. WV HB 4552, Reg. Sess. 2012.

The requirements for participation in the E-Verify program vary between states. South Carolina and Virginia have both established a single effective date by which certain employers should have been or must be compliant. In South Carolina, commencing on January 1, 2012, all private employers required by federal law to complete and maintain federal employment eligibility forms had to begin verifying their employees’ eligibility to work through the E-Verify system within three business days after employing any new employees. S.C. Code Ann. § 41-8-20. Effective December 1, 2013, Virginia will require that any employer with more than an average of 50 employees within the previous 12 months, and which enters into a contract with the Commonwealth for a value in excess of $50,000, use E-Verify for employees working under that contract. Va. Code Ann. § 2.2-4308.2.

North Carolina and Tennessee have incorporated E-Verify through a conditional “phase-in” period, allowing a later effective date for businesses with fewer employees. In Tennessee, the “Lawful Employment Act” (LEA) has been adopted to modify an existing state law that bans the knowing employment of “illegal aliens.” LEA requires employers to verify the eligibility of newly hired employees through either enrolling in and using the E-Verify system or requesting the employee provide one of the specifically enumerated documents set forth in the statute. Tenn. Code Ann. § 50-1-703. By January 1, 2012, all state and local government entities and all private employers had to comply with LEA; by July 1, 2012, all private employers with 200-499 employees must comply with LEA; and all private employers with 6-199 employees must comply with LEA by January 1, 2013. Similarly, effective October 1, 2012, North Carolina employers with 500 or more employees will be required to use E-Verify to determine work authorization for new hires; January 1, 2013 will be the effective date for employers with 100-499 employees; and July 1, 2013 will be the effective date for employers with 25-99 employees. N.C. Gen. Stat. § 64-26.

Employers who employ ineligible or unauthorized aliens face penalties including steep fines, as well as the potential suspension or revocation of the their business licenses. The penalties differ between states and increase in severity based on the number of violations incurred. However, many states allow the employer to correct the violation at the first offense.

Current federal law only requires federal contractors to use E-Verify. However, recently introduced legislation could expand the requirements of the E-Verify program. The Legal Workforce Act (H.R. 2885), if enacted, would require re-verification of all federal, state and local government employees, in addition to new hires. The Achieving Accountability Through Electronic Verification Act (S. 1196), if enacted, would require all employers to verify their employees’ authorization to work through the E-Verify program.

In sum, given the recent influx of related legislation, you should be aware of whether the E-Verify system applies to your business. If you have questions about E-Verify requirements, please contact Larissa Dean at 304.291.7924.