E-Verify Laws in TN, PA, NC Effective Jan. 1, 2013; More on TN’s TLEA

On January 1st, 2013, new E-Verify laws will be phased in for employers in North Carolina, Pennsylvania, and Tennessee.

In North Carolina, employers with 100 or more employees must be registered for and using E-Verify as of January 1st, 2013. Read more here.

Pennsylvania’s new legislation (the Public Works Employment Verification Act) takes effect January 1, 2013, but only applies to public works contractors and sub-contractors where the project is valued at $25,000 or greater. See the law here.

Details about Tennessee’s E-Verify Requirement

Tennesse’s Lawful Employment Act (TLEA) has already been rolled out for most Tennessee employers, but it will become effective for the final group (those with six to 199 employees) on January 1, 2013. The employee count must include employees in any state, so long as the employer is located in Tennessee.

What’s Significant About TN’s E-Verify Law

– Required of all taxpayers with more than 5 employees, it has a wider reach than other states’ E-Verify legislation. (Employers with 5 or less employees are exempt).

– It’s an E-Verify requirement that’s not. Thanks to a last minute change prior to passage, the law actually requires employers to EITHER use E-Verify OR maintain copies of the same identification documents they are already required to view for the Form I-9. While employers have a choice whether to use E-Verify or not under TLEA, they cannot switch back and forth between methods, because the E-Verify program requires its users to employ it exclusively for all new hires.

– Employers must verify employment eligibility of contractors as well as employees,

– Employers can hire third party agents to conduct E-Verify checks.

– Employers without internet access can enter into agreement with the Tennessee Department of Labor & Workforce Development (TDLWD) and permit the TDLWD to enroll them in E-Verify and conduct employment verification checks of new hires on their behalf.

Documents Accepted for Employment Eligibility Verification

  • A valid Tennessee driver’s license or photo ID;
  • A valid driver’s license or photo ID from another state where the license requirements are at least as strict as those in Tennessee (NOT New Mexico or Utah);
  • A birth certificate issued by a U.S. state, jurisdiction or territory;
  • A U.S. government-issued certified birth certificate;
  • A valid, unexpired passport;
  • A U.S. certificate of birth abroad (DS-1350 or FS-545);
  • A report of birth abroad of a U.S. citizen (FS-240);
  • A certificate of citizenship (N560 or N561);
  • A certificate of naturalization (N550, N570 or N578);
  • A U.S. citizen identification card (I-197 or I-179);
  • Valid alien registration documentation or other proof of current immigration registration recognized by the United States Department of Homeland Security that contains the individual’s complete legal name and current alien admission number or alien file number (or numbers if the individual has more than one number).
photo credit: Euthman

Why Tennessee Employers Should Use the E-Verify Option

A major incentive for employers to enroll in E-Verify is the “safe harbor” provision it affords them. If an employer uses E-Verify and receives a confirmation OR if the employee is appealing a tentative non-confirmation and it has not been resolved, the employer will not be found to have violated the law. Employers who utilize the copy retention method are not similarly protected.

Penalties for TLEA Violations

First offense= $500 penalty AND $500 per employee or contractor not verified via E-Verify or documented with copy retained.

Second offense= $1,000 penalty AND $1,000 per employee or contractor not verified via E-Verify or documented with copy retained.

Third offense= $2,500 penalty AND $2,500 per employee or contractor not verified via E-Verify or documented with copy retained.

Additionally, after being found guilty of violating TLEA, Tennessee’s new E-Verify law, if the employer does not submit documentation of compliance, the Tennessee Department of Labor and Workforce Development (TDLWD) will request an order requiring the appropriate local government entity to suspend the employer’s license pending remediation. In the event of subsequent violations (two or more times within a three year period), the business license is subject to suspension for at least one year.

Facts About E-Verify in Tennessee

– As of 2012, about 4,000 TN businesses have enrolled in E-Verify.

– TLEA is considered more moderate legislation than E-Verify legislation in neighboring states of Alabama and Mississippi.

Regional and National Spread of E-Verify Laws

Almost all Southeastern states require E-Verify of all or most employers, including North Carolina, South Carolina, Tennessee, Georgia, Alabama, Mississippi, and Louisiana. Virginia and Florida require E-Verify only for public employers or contractors.

Pennsylvania is the first eastern state to pass E-Verify legislation. Currently, fewer than half of the states do not have an E-Verify requirement at all, and those states are spread across the Southwest, Northwest, Midwest, and South, with a solid block of E-Verify “resisters” in the Northeast.

Now is a great time to do some I-9 / E-Verify housecleaning, before the new laws take effect!

This simple, one page checklist can help you evaluate whether your current system is leaving you vulnerable to audits and liability issues.

Also, check out our Best of ETS’ I-9 and E-Verify Blog Posts and Resources

Disclaimer: This article is general in nature and is not intended to replace the guidance of an employment tax expert and/or legal professional with regards to an appropriate course of action in your particular circumstances. Please consult with a professional for appropriate advice in your case. Pursuant to IRS “Circular 230” rules, any information included herewithin is not intended or written to be used for the purpose of avoiding penalties under the federal Internal Revenue Code.