United States: "To E-Verify, Or Not To E-Verify"

Tennessee's new immigration law is now in effect for many employers in the state. The Tennessee Lawful Employment Act, signed by Gov. Bill Haslam last summer, creates new obligations for employers to verify the identity of new employees in order to ensure that they are legally authorized to work in the United States. The state's largest employers began to implement the new law on January 1, and it is a good time for employers of all sizes to become familiar with the law's requirements and how it will affect their screening procedures for new employees.

Tennessee's old law did not require use of E-Verify, but provided a safe harbor for employers that voluntarily chose to use it. E-Verify is an Internet-based system that allows employers to check a new hire's employment eligibility by using data from the U.S. Department of Homeland Security and the Social Security Administration. Employers have had the option of voluntarily using the E-Verify system for several years, but Tennessee's new law intends to expand its use among the state's government employers and among private employers with more than six employees. The current law leaves E-Verify as an option but also mandates certain actions from employers with respect to the identification paperwork presented by employees. The law also expands responsibilities with respect to documentation required of independent contractors.

Basic Requirements

Employers can satisfy their obligations under the statute in one of two ways: (1) they can enroll in the federal E-Verify program and use that program to verify the work authorization status of all new hires; or (2) they can request and maintain a copy of a new hire's identification document, such as a valid driver's license. Employers should carefully review Tennessee Code Annotated § 50-1-701 et seq. for the complete list of acceptable documents that can be copied in lieu of participating in E-Verify. The primary distinction between the two above-referenced choices is that the statute affords employers who use E-Verify an absolute defense in the event that they are accused of employing an undocumented worker. Employers who choose to maintain copies of identification documents rather than enrolling in E-Verify do not have this "safe harbor."

Whichever of these two screening procedures an employer chooses, it must use the same one for all new employees. An employer may not screen some employees through E-Verify and accept documentation from other employees. The statute also applies to businesses that hire independent contractors, who are called "non-employees" under the statute. These individuals must provide a valid identification document for the employer's records. E-Verify is not an option for independent contractors, even if an employer would otherwise screen its regular employees through E-Verify.

It is important to note that Tennessee's new law does not affect the employer's obligations under federal law. Employers must still complete and maintain I-9s, even though in some cases the permissible identification documents will be different for the Tennessee law. Furthermore, employers should only screen a new employee through E-Verify or by requesting an identification document after the employee has been hired. Screening potential employees before they have been hired is not required under Tennessee or federal law, and may open the employer to charges of discrimination in hiring.

Effective Dates

The statute went into effect for government entities and private employers with 500 or more employees on January 1, 2012. Employers with 200 or more employees must comply with the law no later than July 1, 2012. Employers with six or more employees must comply by January 1, 2013. The statute does not apply to private employers with five or fewer employees.

Getting Started

Employers who choose to register for E-Verify can do so for free through a government website, www.uscis.gov/everify. To enroll, employers must first complete an electronic contract called a Memorandum of Understanding (MOU) with the Department of Homeland Security and the Social Security Administration; it is important that the employer carefully read this MOU and understand its obligations under the MOU before signing. Once enrolled in E-Verify, an employer should be able to verify a new employee's work authorization status online in a matter of minutes. Employers who do not have Internet access can get assistance from the Tennessee Department of Labor and Workforce Development, which will enroll the employer in the program and conduct work authorization status checks of the employer's employees at no charge to the employer.

Employers must maintain a record of the results generated by the E-Verify program or a copy of one of the acceptable documents for three years or for one year after the employee stops working for the employer, whichever is later.

Enforcement

Any lawful Tennessee resident may file a complaint with the Tennessee Department of Labor and Workforce Development, which is the state enforcement authority for the statute. The Commissioner of Labor and Workforce Development may levy a civil monetary penalty against private employers ranging from $500 to $2,500 for each employee who is not properly verified. In extreme cases of noncompliance, the Commissioner may order the suspension of the employer's business license. A list of violators also will be published on the Department's website.

Practical Considerations

As is often true with new legislation, the statute as it is drafted leaves employers with a number of unanswered questions. For example, the statute does not specify a time to conduct these screenings except to say it should be done "prior to the employee providing labor or services." This may be more stringent than federal law, which requires that an employer check a new employee's documents and complete form I-9 within three days of hire.

Furthermore, it is unclear at this point how the number of employees should be calculated for employers with operations in multiple states. For example, the statute does not explain whether a Tennessee-based employer with multistate operations would have to count its out-of-state employees as well as those located within the state. It is also unclear whether an out-of-state employer operating in several states must use E-Verify only for its employees in Tennessee.

The General Assembly will reconvene on January 10, 2012. While members of the General Assembly may prefile bills for the 2012 session before that date, no bill has been filed to date to address these issues or provide other clarification about how employers should implement that statute's provisions into practice. Some time remains, however, for the General Assembly to address the topic; the filing deadline for new bills will be towards the end of January, perhaps as early as January 26.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Joycelyn A. Stevenson
 
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