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Immigration Update

September 27, 2012

North Carolina E-verify Requirement for Large Companies Takes Effect on October 1st

North Carolina Governor Purdue signed HB 36 (E-Verify legislation) into law last June. The law requires all government, public, and private employers with 25+ employees in North Carolina to verify the employment authorization of new hires through E-Verify. E-Verify is a federal internet-based system that queries the employment authorization and identification of persons seeking employment. E-Verify compares documents presented as part of the I-9 process with information stored in State and Federal databases to confirm or deny a person’s authorization to accept employment in the U.S.  North Carolina has now become one of 19 states that has some form of E-Verify requirement for employers. South Carolina’s staggered E-Verify employer requirement began in 2009.

The implementation is staggered based on employer type and size. A previous E-Verify law already required public universities, community colleges, and other North Carolina state agencies to use E-Verify. The new law required all counties and municipalities to begin using E-Verify by October 1, 2011. The requirement deadline for private sector employers varies depending on the number of individuals a company employs in North Carolina. The implementation schedule for these is as follows:

October 1, 2012: E-Verify required for use by private employers that employ 500+ people in North Carolina

January 1, 2013: E-Verify required for companies that employ 100+ workers, but fewer than 500 workers, in North Carolina

July 1, 2013: E-Verify required for companies that employ 25+ workers, but fewer than 100 employees, in North Carolina

The E-Verify requirement does not apply to seasonal temporary employees who are to be employed for no more than 90 days during a consecutive 12-month period. The law also does not apply to employers that employ fewer than 25 employees in North Carolina. An employer not subject to a FAR E-verify clause in a government contract cannot E-verify its current workforce. The E-Verify requirement applies only to new hires after the implementation date.

Employers must register, complete training, and pass an exam in order to participate in E-Verify by the applicable date. This process can take 1-2 days to complete, so companies affected by the October 1, 2012 implementation date must begin the registration process now to be compliant. All companies affected by the legislation are required to enter a newly-hired employee’s information, as reported on the Form I-9, Employment Eligibility Verification, into the E-Verify system to confirm the employee’s authorization to work in the United States.

Penalties for Violating North Carolina’s E-Verify Law grow based upon the number of violations. Employers that knowingly employ unauthorized workers will be required for the first violation to file a signed, sworn affidavit within 3 days of the finding of the violation, stating the employer has consulted with the employee and requested verification of work authorization through E-verify Failure to file the affidavit within three business days result in a civil penalty of $10,000. The second violation fine is $1000, regardless of how many verification were not made. The third violation fine is $2000 per employee verification he employer failed to make through E-Verify. The employer may appeal the fine within 15 days of its determination.

The law also contains a provision for reporting violations of the E-Verify law. Any person with a good faith belief that an employer is violating, or has violated, the E-Verify law may file a complaint with the North Carolina Commissioner of Labor. The Commissioner will investigate complaints and may issue a subpoena for production of employment records as part of the complaint investigation. If a complaint is found to be valid, the Commissioner will hold a hearing to determine whether a violation has occurred and issue fines if necessary. If the Commissioner concludes that there is a “reasonable likelihood” that an employee is an undocumented worker, the Commissioner must notify Immigration and Customs Enforcement (ICE) and local law enforcement agencies.

If you have concerns about your Company’s I-9 or E-Verify compliance, please contact a member of the Moore & Van Allen Global Services Team.