Construction-related
employers face a number of risks in their business, and perhaps none is more
common than the risk of employing unauthorized workers. The nature of the
workforce in the construction industry and related trades means these employers
are often targets for investigations and raids by U.S. Immigration and Customs
Enforcement (ICE) looking for businesses that employ individuals not authorized
to work in the United States. U.S. employers are required to complete the Form
I-9 for new hires to verify work eligibility, but many do not complete the form
properly, on time, or at all. Frequently, the company representatives tasked
with certifying the form are not trained to complete the certification process
properly, and any of these errors can lead to significant fines during a
government audit.

One tool employers may consider using to limit their risks in
this area is the federal government’s E-Verify system, designed to quickly
determine whether new employees are authorized to work in the United States.
The E-Verify system also offers a limited “safe harbor” to its users: if an
employee is determined by E-Verify to be authorized to work in the United
States, the employer is protected against liability if the E-Verify result was
an error and it later turns out the worker was not actually work authorized. As
explained below, this is only one factor for employers to consider when
deciding whether to register for the E-Verify system.

While use of E-Verify is generally voluntary, many employers
are required by state or local law, or status as a federal contractor, to use
the system. Additionally, Congress is currently considering legislation that,
if it becomes law, would phase in mandatory use of E-Verify for virtually all
employers nationwide. With the government’s increased scrutiny of the private
sector workforce and with
ever-expanding E-Verify obligations, it is imperative that employers become
familiar with E-Verify’s basic rules and begin to plan for administrative
changes in the event that using the system becomes mandatory for them.

What Is E-Verify?

E-Verify is the federal government’s online verification
system that uses Social Security Administration (SSA) and Department of
Homeland Security (DHS) databases to enable employers to verify that an
employee is authorized to work in the United States. There is no charge for use
of the system.

Who Is Required
to Use E-Verify?
Federal Contractors and Subcontractors (and Sub-subcontractors, etc.)

In
2008, President Bush issued an Executive Order requiring federal government
contractors to use E-Verify to confirm the employment eligibility of employees
who perform work on contracts within the United States. In September 2009,
regulations implementing this requirement went into effect. The regulations
require federal contractors to agree, through language inserted into their
federal contracts, to use E-Verify to confirm the employment eligibility of all
persons hired during a contract term. In addition, the rule requires federal
contractors to confirm the employment eligibility of current employees
“assigned to the federal contract” within the United States, which includes the
50 states and the District of Columbia, Guam, Puerto Rico, and the U.S. Virgin
Islands. This requirement is a dramatic departure from the E-Verify rules that
apply to all other users prohibiting use of E-Verify for any current employees.

State Laws

Almost
a third of states require use of E-Verify for some or all employers in the
state. State legislation and court decisions result in an ever-changing list,
making it difficult for employers that operate in multiple states to keep up
with their legal obligations. Employers should consult with legal counsel to
determine whether they are required to use the E-Verify
system in a particular state.

At the time of writing, the following states required use of
E-Verify for all or most employers: Arizona, Alabama, Georgia, Louisiana,
Mississippi, North Carolina, South Carolina, Tennessee, and Utah.

Florida, Indiana, Missouri, and Nebraska require public
employers and state government contractors (and most subcontractors) to use the
system.

In Colorado and Minnesota, state government contractors must
use E-Verify. And Idaho and Virginia require
public employers to use the system.

Should My Business
Voluntarily Enroll in E-Verify?

Many
employers have opted to voluntarily use the E-Verify system. By doing so, these
employers are not likely to be significantly affected by a future federal
mandate to use the system. These employers also avoid having to make sense of
the ever-changing patchwork of state laws requiring use of the system. But
other employers have taken a wait-and-see approach to E-Verify and, absent a
mandate to do so, have not enrolled in the system. Both approaches present
benefits and problems, and employers should carefully consider a number of
factors, including those below, and consult with legal counsel in determining
which course to take.

Benefits of Using E-Verify

• Peace of Mind. Using E-Verify provides employers
  with a sense of certainty and confidence. You receive official notice from the
  federal government that a particular employee’s information (as provided to the
  employer) matches what is in the government’s databases. It also provides a
  limited “safe harbor” from liability in the event that the system’s results
  turn out to be inaccurate. If the E-Verify system indicates that an employee is
  authorized to work, and the employer has been given no reason to suspect that
  the employee is not authorized to work in the United States, the employer is
  protected against federal government fines that may otherwise be imposed for
  hiring or continuing to employ a worker known to lack work authorization. Note
  that this safe harbor is limited. If anything about the I-9, the documents
  presented by the employee, or other evidence (such as a complaint or tip from a
  credible source) should have indicated to the employer that the employee was
  not authorized to work in the United States, the safe harbor protection may be
  lost, and the employer could face liability.

• Improved I-9s. Use of E-Verify will generally
  improve an employer’s I-9 practices. The information that employers put into
  the system comes directly from the Form I-9. If an I-9 is incomplete or not
  completed correctly, the employer may not be able to run the required E-Verify
  query, or the query may cause an erroneous result. Most employers who use
  E-Verify find they are forced to pay more attention to proper completion of
  their I-9 forms to avoid problems with E-Verify.

• Fewer SSA “No-Match” Letters. Because the E-Verify system compares
  an employee’s data to the SSA’s databases, use of E-Verify will virtually
  eliminate so-called “No-Match” letters from the SSA. Any employee who would have
  triggered such a letter would be revealed at the time of hire and would either
  work with the SSA to ensure that the appropriate information is listed in the
  SSA’s database or would be discharged.

• Preparation for Mandatory Use. Using E-Verify voluntarily may be
  beneficial to employers who expect they may soon be required to use the system
  due to federal, state, or local laws or due to contractual agreements with
  their clients. Registering for E-Verify in advance of a requirement to do so
  will give the business the opportunity to phase in use of the system. This
  allows time to resolve any difficulties in using the system and can be
  particularly effective for businesses with multiple worksites, as other
  worksites learn from the first worksite’s trials and errors. Early voluntary
  adoption of E-Verify may help avoid HR panic if/when E-Verify becomes
  mandatory.

• Evidence of Good Faith. Using E-Verify may demonstrate to the
  federal government that an employer has voluntarily implemented best practices
  by taking steps to ensure it employs only those who may legally accept
  employment in the United States. When facing a government investigation, proper
  use of E-Verify may serve as evidence that the employer has made good faith
  efforts to ensure compliance with workforce authorization laws and regulations.
  Any employer who has been through an ICE investigation can attest to the fact
  that “good faith” is an important determination that can lead to lower fines
  (or no fines at all).

Risks of Using E-Verify

• Waiver of Advance Notice of
  Inspection. When
  employers sign a Memorandum of Understanding with the federal government as
  part of the E-Verify registration process, they give up their right to the
  72-hour advance notice other employers receive before an ICE inspection of
  their I-9 forms. This means employers who are registered for E-Verify must be
  prepared for an ICE inspection at any moment by ensuring that their I-9s are in
  order and that they have implemented a government investigation response plan.

• Voluntary Exposure of I-9 Errors. As noted above, the information
  employers put into the E-Verify system comes directly from the Form I-9, which
  means the system has the potential to reveal the employer’s I-9 errors and
  issues to the federal government, which could possibly result in liability. By
  contrast, for employers who do not use E-Verify, any incorrect information on
  an I-9 form would only be revealed to the federal government if the employer
  was being audited or investigated.

• Data Mining. I-9 data in E-Verify enables the government to
  easily mine the information for evidence of questionable practices or potential
  violations of law. The government’s review of an employer’s E-Verify entries
  could reveal multiple employees providing the same social security number,
  alien registration number, or green card document number, which could trigger
  an investigation. To give rise to an investigation, however, such situations do
  not have to arise within a single employer’s workforce. If several employers
  use E-Verify and each has an employee with the same identifying information,
  those employers could be targeted for an investigation based on the likelihood
  that at least some of the documents presented by the employees were fraudulent.
  If the government determines that the employer should have noticed that the
  documents were fraudulent, significant fines or other penalties could result.

• System Errors. The E-Verify system is far from
  perfect. An outside evaluation of the system revealed that E-Verify often will
  wrongly confirm the employment eligibility of individuals who are not
  authorized to work in the United States. The main reason for the high error
  rate is that E-Verify cannot detect identity theft. If an employee provides an
  employer with the name, date of birth, and social security number of an
  individual who is authorized to work in this country, E-Verify is unable to
  determine that the information does not pertain to the employee presenting the
  information because E-Verify typically does not include photographs.

• Risk of Investigation by the
  Department of Justice. Similar to the data mining concerns above, DHS shares information with
  the Justice Department’s Office of Special Counsel for Unfair
  Immigration-Related Employment Practices (OSC) relating to possible employer
  misuse of E-Verify.

  As of March 2010, DHS provides data, including citizenship
  status, to the OSC from queries employers run through E-Verify. The OSC may use
  the information from E-Verify to investigate possible violations of the
  Immigration and Nationality Act. These violations could include discrimination
  based on citizenship, immigration status, or national origin; document abuse by
  imposing unfair documentation requirements or practices during the I-9 process;
  and/or retaliation against certain employees.

  Even without such information-sharing, use of E-Verify gives
  rise to a greater possibility that managers and/or HR representatives will
  commit “document abuse” or other discriminatory practices in the hiring
  process. Employers using E-Verify often mistakenly believe they are required to
  see an employee’s green card if the employee claims to be a lawful permanent
  resident. Requesting that document can result in an OSC complaint and
  investigation. Similarly, many employers improperly use E-Verify for existing
  employees, which can also result in OSC action.

• Administrative Costs. While the E-Verify system is “free,”
  in that employers do not have to pay any fees to use it, use of the system
  requires that employers invest a significant amount of administrative time and
  resources in training, system administration, running E-Verify queries, and
  working through the case resolution process for employees who are not
  immediately confirmed by the government as employment authorized. In addition,
  use of E-Verify does not relieve employers of the requirement to complete I-9
  forms for employees, which means enrolling in E-Verify actually increases,
  rather than decreases, the administrative tasks associated with hiring.

• Loss of Employees. Finally, using the system may, in
  some cases, tell employers something they do not want to know: that the highly
  qualified person just hired and desperately needed to fill a critical role in
  your business is not authorized to work in the United States.

How Do I Register
for and Use E-Verify?

Whether you choose to or are required to enroll in the
E-Verify system, the
steps are the same:

1. Register for E-Verify. Registration to use E-Verify can be
   completed online. At the end of the registration process, the E-Verify system
   will issue a Memorandum of Understanding (MOU) to be agreed to by the employer.
   There are multiple registration configurations available; it is generally
   recommended that employers work with legal counsel to ensure that registration
   is properly completed.

2. Complete E-Verify tutorial. Each employer representative who
   will submit verification requests must complete the online E-Verify tutorial
   before initiating any requests.

3. Post required notices. E-Verify employers must post the
   provided DHS and DOJ notices at each hiring site so they are clearly visible to
   prospective employees. If an employer uses an online application system, it
   should provide the notices to applicants at the time they apply for positions
   by posting them online.

4. Read and comply with the E-Verify
   manual. The manual
   will be provided by DHS during registration. It is also available on the
   E-Verify website.

5. Use E-Verify at registered sites
   for new hires. Once
   each hiring site is registered for E-Verify, it must use the system to confirm
   the employment eligibility of every new hire at that site. An employer must not
   use E-Verify for those hired before its registration date (unless those
   employees are assigned to work under a federal government contract or
   subcontract that requires their information be submitted to the E-Verify
   system).

   1. Verification must be initiated within 3 business days after the
      employee’s first day of work for pay. (The deadline is Thursday for someone
      hired on a Monday.)

   2. Verification must not be
      initiated until parts one and two of the I-9 form are complete.

      1. If a “List B” document is used
         by the employee during the I-9 process, the employer may accept it only if it
         contains a photograph.

      2. If an I-551 (Permanent
         Resident Card), I-766 (Employment Authorization Document), or U.S. Passport is
         used by the employee during the I-9 process, the employer must retain a copy.

   3. Typically, verification may only
      be completed for new hires. If the employer is not required to complete a form
      I-9 for an employee (and does not do so), it should generally not submit that
      employee’s information for verification. As noted above, this rule is different
      for federal government contractors, who are required to use E-Verify for
      employees assigned to work under certain federal government contracts. The rule
      is also different for rehires. DHS indicates that a rehire should be treated as
      a “new hire” for E-Verify purposes, even if the employer would otherwise simply
      use Section 3 of the Form I-9 to reflect the employee’s rehire date.

      1. If an employee is returning
         from certain layoffs, a strike, a lockout, or authorized leave, he is probably
         not a “new hire.” A new I-9 does not need to be completed for this employee,
         and the employee’s data should not be submitted to the E-Verify system. 
         However, to show that the employee is not being “hired,” the employer must be
         able to establish that the employer and the individual employee reasonably
         expected that the employee would resume employment at all times after the beginning
         of the layoff, strike, lockout, or authorized leave.

      2. If an employee is transferred
         from one worksite to another (but continues to work for the same employer), a
         new I-9 must not be completed, and that employee’s information must not be
         entered into E-Verify. 

         Note that this
         transfer provision must not be manipulated to avoid the use of E-Verify. If an
         individual is legitimately hired in one location to perform work there and is
         later transferred to a site registered for E-Verify (within the same legal
         entity), the employer generally must not use E-Verify for that individual.
         However, if the employer uses a California site simply to hire individuals with
         the intention of sending those individuals to work in Arizona (or another
         E-Verify state), it may face significant liability, as such activity creates
         the impression that the employer may have constructive knowledge that it is
         employing unauthorized workers.

      3. If an employee is transferred
         from one employer to another (depending on the circumstances, this may apply
         when an employee transfers from one legal entity to another?even within the
         same corporate organization), a new I-9 must be completed. If that employee has
         been transferred to a worksite that is registered for E-Verify, his information
         must be entered into the verification system.

      
      

6. Obtain confirmation of employment
   authorization or a final non-confirmation. Once an employer puts an employee’s I-9 data into the
   E-Verify system, the system will (within seconds) return one of several results.
   The most common are: “Employment Authorized,” “SSA (or DHS) Tentative
   Non-Confirmation,” or “DHS Verification in Process.”

   1. Employment Authorized: This indicates the employee is
      authorized to work. The employer must close the query and then record the verification
      number generated by E-Verify on the employee’s I-9 form or print out the
      verification page and retain it with the form I-9. No further action is
      necessary.

   2. SSA Tentative Non-Confirmation: This indicates there is an
      information mismatch with the SSA databases. The following instructions must be
      followed by an employer for SSA and DHS Tentative Non-Confirmations (TNCs):

      1. The employer must inform the employee of the TNC and must print the TNC
         notice (generated by E-Verify) and review it with the employee.

      2. The employee has the option to
         contest or not to contest the TNC. The employee must indicate on the notice
         whether he or she will contest the TNC. The employer and the employee must sign
         the TNC notice.

      3. If the employee chooses not to
         contest the TNC, it is considered a final non-confirmation of employment
         authorization, and the individual’s employment should be terminated.

      4. If the employee chooses to
         contest the TNC, the employer must use the E-Verify system to generate a
         referral letter, which will provide instructions to the employee for contesting
         the TNC. The employee must contact the appropriate agency (SSA or DHS) within 8
         government working days to resolve the discrepancy.

      5. While attempting to resolve the
         discrepancy, the employee may continue to work. The employee must not face
         adverse employment action based on a TNC.

      6. SSA or DHS will automatically
         update the E-Verify system once the discrepancy is resolved or once it is
         determined that the discrepancy is not resolvable. At that point, the status of
         the verification will change to “Employment Authorized,” “Final
         Non-Confirmation,” or “Review and Update Employee Data then Resubmit.”

         1. Employment Authorized:  the employer should resolve the query and record the
            verification number generated by E-Verify on the employee’s I-9 form or print
            the case verification sheet and retain it with the I-9. No further action is
            necessary.

         2. Final Non-Confirmation: unless the
            employer believes the final non-confirmation to be in error, the employer
            should terminate the employee’s employment. Employers must keep records to
            indicate reasons for termination. (Note that if the employer continues to
            employ the individual, a rebuttable presumption is created that the employer is
            knowingly employing an unauthorized worker, which can lead to significant
            fines.)

         3. Review and Update Employee Data then Resubmit: the data originally put
            into the system may not have been correct. Review the social security number
            and other information carefully and resubmit the E-Verify inquiry.

         
         

   3. DHS Verification in Process: This indicates that DHS is working
      to confirm employment authorization in its databases. In general, DHS will make
      a determination within 24 hours, and the status of the verification will change
      to either “Employment Authorized” or “DHS Tentative Non-Confirmation.”
      Employers should follow the instructions above once the status changes.

7. Discharge employees with final
   non-confirmations unless the final non-confirmations are believed to be in
   error (see above).

8. Record verification numbers on employees’ I-9 forms as appropriate or print and
   retain case verification sheets.

9. I-9
   Compliance: remember that compliance with existing I-9 regulations is the first
   step toward compliance with both federal and state E-Verify requirements.

Conclusion

The
E-Verify process, while provided by the U.S. government at no charge, is far
from free. The system requires employers to understand and apply complex rules
governing employment eligibility. While many employers are required to use
E-Verify, others currently have the choice of whether to use it. The system can
be a useful tool, but it is best implemented as part of a comprehensive
compliance program. These programs may include I-9 training, voluntary I-9
audits, implementation of software programs, use of E-Verify, and policies
covering immigration compliance, which together will go a long way to
minimizing an employer’s legal liability for violations of immigration laws.

In the near future, use of E-Verify may be required for most
or all U.S. employers. This likelihood, when combined with the recent focus on
prosecution of employers for immigration-related violations, leads to the
conclusion that employers should implement strong compliance programs and begin
planning for the eventual use of E-Verify.