United States: Ready Or Not, Here They Come: State E-Verify Laws And What Employers Should Know

Just as the nation's unemployment rate has risen to new levels, so has public pressure on the government to curb employment of undocumented workers. Several states have responded to illegal employment by passing laws that require employers to use a federally created Internet-based program called E-Verify. This electronic verification system allows employers to verify that new hires are authorized to work in the United States by comparing information from employees' Form I-9s with records maintained in federal databases.

While employer participation in E-Verify is voluntary under federal law, the recent United States Supreme Court decision in Chamber of Commerce of the United States v. Whiting has given states the green light to make E-Verify1 participation mandatory for employers. In the 5-3 decision, the Court upheld an Arizona law that, in addition to imposing licensing sanctions on businesses that hire unauthorized workers, requires Arizona businesses to check the work authorization status of new employees through E-Verify. Given this unequivocal endorsement from the High Court, employers should now expect to see a proliferation of state laws requiring mandatory E-Verify participation. Not only will the hiring process change for many employers who hire employees within a state that has passed E-Verify legislation, but multistate employers will be forced to navigate an ever-changing and sometimes contradictory patchwork of state laws.

Development of the E-Verify Program

Sanctions against employers for hiring unauthorized aliens were first created at the federal level in 1986 when Congress passed the Immigration Reform and Control Act (IRCA).2 IRCA prohibits employers from knowingly or intentionally hiring or continuing to employ an unauthorized alien.3 It also established the I-9 system, which requires employers to complete a Form I-9 for every new hire as a way to demonstrate employer compliance with IRCA.4 Form I-9 requires employees to attest to their eligibility to work, and employers to certify that the documents presented reasonably appear on their face to be genuine and relate to the individual.5 Employers who act in good faith compliance with the I-9 system are entitled to an affirmative defense to federal employer sanctions.6

In 1996, Congress passed the Illegal Immigration Reform and Immigrant Responsibility Act (IIRIRA), which created three pilot programs to improve the efficiency and accuracy of the I-9 verification process.7 Of those three programs, E-Verify, formerly called the Basic Pilot Program, is the only program still in existence. A free Internet-based program, E-Verify is administered by the Secretary of Homeland Security.8 It allows employers to compare employees' Form I-9 information with records in the Social Security Administration database and the Department of Homeland Security's immigration databases. E-Verify does not replace the I-9 system, and employers who elect to participate in E-Verify must still complete Form I-9 for every new employee.9 While employers who in good faith comply with the I-9 system are entitled to an affirmative defense to sanctions, those who use E-Verify are entitled to a rebuttable presumption that they did not knowingly hire an unauthorized employee.10

With limited exceptions for certain federal government entities and IRCA violators, participation in E-Verify is voluntary under federal law. "Except as specifically provided in subsection (e), the [Secretary of Homeland Security] may not require any person or other entity to participate in a pilot program."11 In addition, the Federal Acquisition Regulation12 requires many federal contractors to use E-Verify to verify the employment eligibility of certain new and current employees.

While federal law still makes E-Verify voluntary for most employers, the Supreme Court decision in Chamber of Commerce of the United States v. Whiting now authorizes state governments to mandate participation by all employers.

Supreme Court Decision in Chamber of Commerce of the United States v. Whiting

The issue before the Whiting Court was whether federal immigration laws preempted the controversial Legal Arizona Workers Act (LAWA).13 Enacted in 2007, LAWA authorizes the Arizona Attorney General and county attorneys to bring legal actions against employers who knowingly or intentionally employ unauthorized aliens. Under LAWA, the Arizona superior court may suspend or revoke an employer's business license after repeated violations of the statute. LAWA also mandates that all employers within Arizona must use E-Verify to verify the immigration status of new employees.

Within a month of LAWA's enactment, the Chamber of Commerce of the United States, along with several businesses and civil rights groups, filed a lawsuit against Arizona state officials to challenge the constitutionality of LAWA.14 The Chamber of Commerce argued that LAWA should be invalidated because IRCA expressly and impliedly preempts LAWA. Both the district court and appellate court disagreed. Affirming the lower court, the Ninth Circuit held that LAWA was a "licensing or similar law" exempted from IRCA's preemption clause and that Arizona's licensing sanctions and E-Verify requirement escaped implied preemption because they were consistent with congressional intent.15

On May 26, 2011, in Chamber of Commerce of the United States v. Whiting, the Supreme Court affirmed the Ninth Circuit's decision. The Court held that: (1) Arizona's licensing law was not expressly preempted by federal law; (2) Arizona's licensing law was not impliedly preempted by federal law; and (3) Arizona's requirement that employers use E-Verify was not impliedly preempted.

First, the Court held that LAWA falls within the authority Congress left to the states and therefore is not expressly preempted. The Court reasoned that although states may not impose civil or criminal sanctions on businesses that employ unauthorized aliens, they may impose sanctions "through licensing and similar laws." These sanctions may include revocation of a business's state-issued authorization to conduct business within the state. "Licenses" subject to revocation under Arizona's law include "any agency permit, certificate, approval, registration, charter or similar form of authorization that is required by law and that is issued . . . for the purposes of operating in the business in this state," including "articles of incorporation, certificates of partnership, foreign corporation registrations, and transaction privilege licenses."

Second, the Court held that LAWA's unauthorized worker provision is not impliedly preempted because it implements the sanctions Congress expressly allowed the states to pursue through licensing laws. When Congress reserved this authority for the states, the Court reasoned, it must have intended for the states to use appropriate tools to exercise the authority. Furthermore, LAWA follows all of IRCA's material provisions, including using the same definition of "unauthorized alien." LAWA does not disrupt the careful balance Congress struck in enacting IRCA because federal and state laws protect against employment discrimination, LAWA only covers knowing and intentional violations, and LAWA provides a safe harbor for employers who use E-Verify as required by the law.

Third, the Court concluded that LAWA's requirement that employers use E-Verify is not impliedly preempted because it does not conflict with the federal requirements.

The fact that the federal government may only require its use in limited circumstances says nothing about when the states may do so. The consequences of an employer's failure to use E-Verify are the same under the Arizona and federal law — the employer loses the benefit of the rebuttable presumption of compliance with the law. Furthermore, LAWA does not obstruct the goal of IIRIRA, as Congress has expanded and encouraged the use of E-Verify and directed that it be made available in all 50 states.

State E-Verify Laws

Even before the Whiting decision, several states made E-Verify participation mandatory for employers located within those states as well as those who contract to provide services to those states. Of the 17 states with E-Verify mandates in place today, the following eight states require employers, both public and private, to participate in E-Verify depending on the number of employees: Alabama, Arizona, Georgia, Mississippi, North Carolina, South Carolina, Tennessee, and Utah. While the remaining states limit mandatory E-Verify participation to public employers or contractors, it may only be a matter of time before these and new laws will extend to private employers as well.

As new laws surface, employers may find themselves forced to comply with state E-Verify laws that facially contradict federal requirements or the requirements of the laws of other states. For example, on January 4, 2011, Florida Governor Rick Scott signed Executive Order 11-04, mandating that all Florida state agencies, as a condition of awarding a state contract, use the E-Verify system to verify the employment eligibility of "(a) all persons employed during the contract term by the contractor to perform employment duties within Florida; and (b) all persons [including subcontractors] assigned by the contractor to perform work pursuant to the contract with the state agency." Based on a plain reading of the language, the Executive Order required the use of E-Verify to check the employment status of current employees in violation of federal rules prohibiting the use of E-Verify for current employees. Indeed, under a "Memorandum of Understanding" that employers must sign to enroll in E-Verify, employers who use E-Verify for current employees risk being terminated from the program altogether. Luckily, Florida evidently realized the conundrum it created for employers and on May 27, 2011, Governor Scott signed a new Executive Order superseding his original order which clarifies E-Verify is to be used only for new hires. The fix may not always be so simple. If placed in an E-Verify Catch 22, employers should first seek clarification from the state authority responsible for enforcing the E-Verify requirement and consult legal counsel.

States with Mandatory E-Verify Laws

At the end of this article Table 1 summarizes E-Verify legislation that has been passed in several states; it does not include proposed legislation. Its purpose is to provide employers with a snapshot of today's E-Verify landscape, but note that it is not a comprehensive summary of individual state laws. Moreover, state E-Verify legislation is a dynamic area of law, and increased activity in the wake of the Whiting decision is a virtual certainty. Accordingly, employers should refer to state legislature websites for the most up-to-date information on state E-Verify requirements to ensure compliance. In case of doubt, employers should consult counsel for guidance.

Life After E-Verify: What Should Employers Do Now?

With momentum building for state E-Verify mandates, employers should expect to see stricter enforcement nationwide. In several states, failure to use E-Verify could result in suspension of business licenses, termination of contracts, civil fines, or debarment from contracting with the state altogether. To avoid these harsh sanctions, employers should thoroughly review each state's E-Verify requirements, and take proper measures to ensure compliance.

To start, employers new to E-Verify (or even those who have been participating in the program for some time) should consider adopting some of the following useful hiring practices:

  • For multistate employers obligated to use E-Verify in one state, consider adopting E-Verify companywide to avoid conflicting standards within the company (not to mention confusion for Human Resources and employees).
  • Do not use E-Verify on current employees. Unless the employer has been awarded a federal contract on or after September 8, 2009, this is prohibited by federal guidelines.
  • Require uniform verification of new employees. Even if an employer is required to use E-Verify for certain employees only, selective use of E-Verify may be perceived as discriminatory.
  • Never use E-Verify on a job applicant prior to hiring. If the candidate is not hired, the candidate may later bring charges of discrimination against the employer.
  • If available in the employer's state, inform all job applicants about the E-Verify Self Check service. Self Check is available in Idaho, Arizona, Colorado, Mississippi, Virginia, and the District of Columbia. Because E-Verify is not yet bug-free, prospective employees could save their employers precious time and money by resolving erroneous results before starting employment.

Again this is a changing area of the law that is highly politicized and fraught with minefields. Employers should proceed carefully in this area and seek guidance from experienced counsel when necessary.

Table 1: State E-Verify Laws




Footnotes

1. Chamber of Commerce of United States. v. Whiting, 563 U.S. ___ (2011) (09-115).

2. IRCA, Pub. L. 99-603, 100 Stat. 3359 (1986).

3. 8 U.S.C. § 1324a(a)(1).

4. Id. at 1324a(b).

5. U.S. Citizenship & Immigration Servs, Handbook for Employers: Instructions for Completing Form I-9 (Employment Eligibility Verification Form) 11, http://www.uscis.gov/files/form/m-274.pdf.

6. Id. § 1324a(b)(6).

7. IIRIRA, Pub. L. 104-208, §§ 401-405, 110 Stat. 3009, 3009-655 to 3009-666 (1996).

8. Id. at 403.

9. Id. at 403(a)(1); see U.S. Citizenship & Immigration Servs., E-Verify User Manual for Employers 13, http://www.uscis.gov/USCIS/E-Verify/Customer%20Support/E-Verify%20User%20Manual%20for%20Employers%20R3%200-%20Final.pdf.

10. IIRIRA § 402(b)(1).

11. Id. at 402; see Chamber of Commerce v. Edmondson, 594 F.3d 742, 768 (10th Cir. 2010) (internal citations omitted).

12. See Federal Acquisition Regulation, 48 C.F.R. pts. 1-53 (2010).

13. Ariz. Rev. Stat. Ann. §§ 23-211, 212, 212.01.

14. Ariz. Contractors Ass'n v. Candelaria, 534 F.Supp.2d 1036 (D. Ariz. 2008).

15. Chicanos Por La Causa, Inc. v. Napolitano, 544 F.3d 976 (9th Cir. 2008).

Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Morrison & Foerster LLP. All rights reserved

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions