North Carolina Enacts New Employee Verification Requirement

North Carolina Enacts New Employee Verification Requirement

July 01, 2011

North Carolina Governor Bev Purdue has signed legislation (House Bill 36) that requires employers in the state with 25 or more employees to use E-Verify to confirm that new employees are eligible to work in the United States.

Operated by the Department of Homeland Security in partnership with the Social Security Administration, E- Verify is an Internet-based system that allows an employer to determine a new hire’s eligibility to work in the United States.

Compliance Deadlines:

North Carolina’s E-Verify requirement will be phased in based on employer size according to the following schedule:

• Employers with 500 or more employees are required use E-Verify beginning October 1, 2012.
• Employers with 100 to 499 employees must use E-verify by January 1, 2013.
• The requirement applies to employers with 25 to 99 employees beginning on July 1, 2013.

Employers with fewer than 25 employees are exempt from the requirement. In addition, the law does not apply to seasonal temporary employees employed for 90 or fewer days during a 12-consecutive month period.

Record Retention:

The law requires employers to retain records of e-verification for the duration of the employee’s employment plus one year.

Penalties:

Employers found to have failed to comply with the E-Verify requirement must file an affidavit within 3 business days attesting they have requested an e-verification pertaining to the employee(s) in which the employer failed to obtain an e-verification upon hire. The penalty for failing to file a timely affidavit is a fine of $10,000. A second violation of the e-verification requirement may result in a fine of $1,000. Subsequent violations may result in a fine of $2,000 for each e-verification the employer failed to perform.

Compliance Recommendations:

Employers should register for E-verify and review hiring procedures to ensure that e-verification is incorporated into the process prior to the applicable effective date. Those using E-Verify should also be trained on how to properly use the system (e.g., before initiating an E-Verify query, employers must wait until a candidate has accepted an offer of employment and both parties have completed the I-9 form; however, they must wait no later than the third business day after the new hire begins working for pay).

Employers should also note that using E-Verify does not relieve them of the responsibility to complete and retain an I-9 form for all newly hired employees.