E-Verify: North Carolina and Federal Requirements

North Carolina’s Rule

Last 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 also is being adopted by states, regardless of federal contracts being involved.

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

• Employers with 500 or more employees will be 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.

Federal E-Verify Rule

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 3 business days of the employee’s start date. 

E-Verify must also 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.  E-Verify does not apply to work that is performed outside the US, if the term of the federal contract lasts less 120 days, or if the federal contract pertains to commercially available off the shelf items.  A “commercially available off the shelf item”, known COTS, is something generally sold in substantial quantities in the open market.  A few examples are computer software, computer hardware and construction materials.  Also, industries that hire agricultural workers for 90 days or less in a 12 month period are exempt from enrolling in Federal E-Verify.

Unless the subcontractor is a supplier and not subject to the E-Verify federal contractor rule, a federal contractor must also 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 Any 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 pre-screen job applicants; it is used post-hiring 
• Do not ask for additional documentation in the event of a “Tentative Nonconfirmation” by E-Verify: 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: 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, North Carolina employers with 25 or more employees would do well to visit the E-Verify website.  Click here.  At this point, there is time to become acquainted with E-Verify and its enrollment procedures before registration becomes mandatory.