Phase-In Mandatory E-Verify Law Passes in North Carolina

On June 23, 2011, North Carolina Governor Beverly Perdue signed into law the requirement that cities, counties and businesses employing 25 workers or more use the federal database system E-Verify to check the employment eligibility of new hires. Agricultural companies hiring seasonal workers for 90 days or less during a 12 consecutive month period are exempt. The requirement to use E-Verify is phased in over a two year period: businesses employing 500 workers or more must enroll in E-Verify by October 1, 2012; businesses with 100 or more employees must enroll by January 1, 2013; and businesses employing 25 or more workers must enroll by July 1, 2013.

E-Verify is an internet-based system operated by the Department of Homeland Security (DHS) and the Social Security Administration that allows participating employers to verify the employment eligibility of their newly hired employees. To enroll in E-Verify, an employer must enter into a Memorandum of Understanding with the DHS.

Some employers may express concern about the access that DHS and Immigration and Customs Enforcement (ICE) will have to its information by enrolling in E-Verify. In point of fact, the DHS, the Department of Labor, and the Office of Special Counsel of the Department of Justice are all already authorized to access and audit I-9 Forms in accordance with the Immigration Reform and Control Act of 1986. When enrolling in E-Verify, the Memorandum of Understanding signed by the enrolling employer requires that it agree ”to cooperate with DHS and the Social Security Administration (SSA) in their compliance monitoring and evaluation of E-Verify, including permitting DHS and SSA, upon reasonable notice, to review I-9 Forms and other employment records and to interview it and its employees regarding the Employer’s use of E-Verify, and to respond in a timely and accurate manner to DHS for information relating to their participation in E-Verify.” Article II.C.15

The new legislation also enables anyone to file an anonymous complaint with the North Carolina Commissioner of Labor if they have a “good faith belief” that a business is employing an unauthorized worker. Knowingly filing a false or frivolous complaint is a misdemeanor. The Commissioner of Labor may request the State Bureau of Investigation to assist in investigating a complaint and may subpoena employment records relating to recruitment, hiring, employment and termination policies and practices of the employer against whom the complaint was filed. If the Commissioner of Labor concludes that there is a reasonable likelihood that the business is employing an individual who is not employment-authorized, the Commissioner will notify ICE and local law enforcement. The first violation will result in a civil penalty of $10,000, the second violation will result in a civil penalty of $1,000, regardless of the number of required employee verifications the employer has failed to make, and the third or subsequent violation will result in a civil penalty of $2,000 for each required employee verification that the employer has failed to make.

An employer is required to retain records of its E-Verify verification of work authorization as long as the E-verified worker remains employed, and for one year thereafter.