United States: North Carolina Joins Growing List Of States Mandating Employer Use Of Federal E-Verify System

In light of growing dissatisfaction with the federal immigration system, various states have taken matters into their own hands in an attempt to limit employment of unauthorized aliens.  Though this tactic is controversial, the U.S. Supreme Court has upheld one such statute in Arizona.  

North Carolina has joined the fray, and on July 1, 2013, its E-Verify requirement went into effect for all private employers of 25 or more employees.  These employers must now use the federal E-Verify employment eligibility verification system to check work authorization for all new hires.  The law provides for penalties for employers who fail to use E-Verify, starting with $10,000 for the first violation, with additional penalties for subsequent violations.

E-Verify Background

The Immigration Reform and Control Act of 1986 ("IRCA") mandates that U.S. employers verify the identity and employment eligibility of newly hired employees through completion of a Form I-9 and review of required documents.  IRCA contains civil and criminal penalties for failure to comply, including potential fines of up to $16,000 per unauthorized worker.  As an enhancement to the I-9 process, the federal government has created E-Verify, which is a free Internet-based system operated by the Department of Homeland Security ("DHS") and the Social Security Administration that allows participating employers to confirm an individual's employment eligibility by inputting information gathered during the I-9 process.  The system either confirms the individual's eligibility to work or issues a tentative non-confirmation, which requires further action by the individual to validate his/her authorization to work.

Use of E-Verify offers employers a safe harbor against a later finding that a worker was in fact unauthorized.  But there is a catch: before using E-Verify, an employer must sign a non-negotiable Memorandum of Understanding ("MOU") with the DHS.  In the MOU, the employer waives its right to a three-day advance notice of an I-9 audit.  This means an employer faces the risk of an unannounced visit from Immigration and Customs Enforcement ("ICE") without the ability to prepare in advance.

What Employers Need to Do

Maintaining compliance in North Carolina will require private employers with 25 or more employees to verify the work authorization of all new hires through E-Verify.  Employers must retain verification records during each employee's employment and for one year after employment ends.  Employers do not need to verify work authorization for seasonal or temporary employees who are employed for 90 or fewer days during a 12-month period.

The North Carolina Commissioner of Labor has the authority to investigate complaints that an employer has not verified an employee's work authorization.  The Commissioner may require an employer to produce employment records, may hold a hearing, and may impose penalties on employers.  If the Commissioner thinks there is a reasonable likelihood that an employee is an unauthorized alien, the Commissioner will also notify ICE along with local law enforcement.

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