How One State is Enforcing E-Verify & How It Could Affect You

The Pennsylvania General Assembly recently passed the Construction Industry Employee Verification Act, which imposes new verification and records retention obligations on employers in the industry. Let’s start with the basics:

• What does the law require? The act prohibits covered employers from hiring people without work authorization, requires them to use E-Verify to confirm their newly hired employees’ status, and obligates them to retain records from E-Verify.
• What is E-Verify? E-Verify is an online system that permits employers to verify the employment eligibility of their newly hired employees.
• How does E-Verify work? E-Verify works by electronically comparing the information from an employee’s Form I-9 with records available to the United States Social Security Administration and/or the Department of Homeland Security to verify the identity and employment eligibility of each newly hired employee.
• Is completion of the Form I-9 still necessary? Absolutely. E-Verify is not a replacement for the Form I-9. Rather, it is an additional requirement for employers in the construction industry.
• When is the law effective? The act became law on Oct. 7, 2019. Covered employers will need to comply with the act by Oct. 6, 2020.
• Who must comply? The act applies to all covered employers in the industry. The “construction industry” refers to anyone that “engages in the erection, reconstruction, demolition, alteration, modification, custom fabrication, building, assembling, site preparation, and repair work or maintenance work done on real property or premises under a contract, including work for a public body or work paid for from public funds.” Under the act, an “employer” is an individual, entity or organization in the construction industry that transacts business in Pennsylvania and employs at least one person. The act also applies to staffing companies that supply workers for the construction industry.

Which Employee Records Must Be Kept Under the Act?

Employers must keep the results from E-Verify throughout a person’s employment or 3 years from the date of the verification, depending on which time period is longer. Employers should also remember that they need to keep the Form I-9 for 3 years from the date on which they hire an employee or one year from the date on which they terminate them, whichever is longer.

Who Enforces the Act?

The Pennsylvania Department of Labor and Industry (DLI) has responsibility for enforcing the act. The DLI has the authority to go to an employer’s place of business and inspect its records; to copy an employer’s records; to request statements regarding that employer’s process to verify employees’ work authorization; and to interrogate persons about an employer’s compliance with the law.

If the DLI receives a complaint on the prescribed complaint form that a covered employer has hired someone without authorization, it must conduct an investigation. In the absence of a prescribed complaint form (e.g., someone makes an anonymous complaint), the DLI may conduct an investigation.

The DLI can never conduct an investigation if the complaint solely rests on an employee’s race, color or national origin. If a person provides materially false information in a complaint form to the DLI, that person will be subject to the penalties associated with unsworn falsification to authorities.

What Happens if You Don’t Comply?

The first time a covered employer violates the act, it will receive a written notice from the DLI. The warning notice will detail the violation and will explain the provisions of the act. After the DLI issues the warning notice, a covered employer will have 10 business days to terminate the unauthorized employee and verify that it took such action with the DLI.

If the employer fails to provide verification by the deadline, it will be in violation of the act. The act shows mercy on an employer who complies after an initial violation. If an employer violates the act 10 years after the initial violation, the subsequent violation will constitute a first violation.

If, however, a covered employer commits a subsequent violation, the DLI will refer the matter to the state attorney general for enforcement. After the referral, the attorney general can bring an action against the covered employer where the unauthorized employee was working or is working. In such instances, the court must expedite adjudication of the action; i.e., assigning the matter to a judge and scheduling a hearing as soon as it is practical to do so.

At the time of the hearing, the court only will inquire into whether the employee in question has authorization to work pursuant to Section 642(c) of the Illegal Immigration Reform and Immigrant Responsibility Act of 1996.

This law, in pertinent part, states that the U.S. Customs and Immigration Service shall provide a governmental agency verification of a person’s citizenship and immigration status after receipt of an inquiry.

For the purposes of the hearing, the federal government’s determination under Section 642(c) creates a rebuttable presumption regarding an employee’s status. Indeed, the court can take judicial notice of such a determination and can hear testimony from the federal government on this matter.

An employer also has two important tools in its arsenal if a case proceeds to court. First, the employer can create a rebuttable presumption that it didn’t knowingly hire a foreign national without authorization by providing evidence that it verified the authorization through E-Verify. Second, an employer can assert an affirmative defense if it can establish that it complied with Section 274A(b) of the Immigration and Nationality Act in good faith.

Section 274(A)(b), in pertinent part, requires an employer to verify that it has inspected documents that establish an employee’s identity and authorization to work through the competition of the Form I-9. If the court rules that a covered employer has violated the act, it can order:

• The termination of the unauthorized foreign national’s employment
• The imposition of a 3-year probationary period for the covered employer
• The completion of a verification by the covered employer within 5 business days, which attests that all employees have authorization
• The suspension of the covered employer’s state licenses until it submits the verification

In the event that the attorney general initiates a subsequent action against the same employer for knowingly hiring an unauthorized foreign national and the court rules that there was a violation, the court not only can impose the same sanctions listed above, but it also can order the suspension of the employer’s state licenses for up to 30 days. Such further violations by the same employer can result in a suspension of its state licenses for one year or forever, depending on the circumstances.

Are There Any Protections for Employees?

The act prohibits an employer from discriminating or retaliating against an employee who makes a complaint of a violation or participates in an investigation, an inquiry or a hearing in connection with a violation.

If an employer takes such action, the employee can sue their employer and can obtain reinstatement, restitution that equals three times the amount of their wages and benefits, counsel fees and any other appropriate legal or equitable relief.

Are Contractors Responsible for the Actions of Others?

The act does not make contractors responsible for their subcontractors’ violations. Likewise, subcontractors are not responsible for their subcontractors’ noncompliance. A general contractor can be liable for its subcontractors’ violations if it contractually does not require them to comply with the act and doesn’t obtain confirmation of the same.

What Are the Implications of the Act?

The act increases administrative burdens and transactional costs for employers in the industry because they will need to hire and/or to train staff who are familiar with E-Verify, to draft and institute proper e-verification policies and procedures, to conduct audits to ensure their compliance with the law, and to revise their agreements with subcontractors.

Furthermore, the Pennsylvania Legislature may make the use of E-Verify mandatory for all employers or other states may adopt similar laws if the act proves to be effective in decreasing the hiring of unauthorized individuals. Even so, the act does provide covered employers with additional assurance that they are hiring only employees with authorization to work in this country.