New Governor Mandates E-Verify for Florida State Agencies and Businesses With State Contracts
Labor & Employment Law Alert 01/10/11 Grant Sovern, Otto W. Immel, Eric D. Ledbetter
Even before dancing one step at his inaugural ball, Florida's Governor Rick Scott took a step toward fulfilling his campaign promise of requiring all Florida employers to use the federal government's E-Verify system. Florida is now the 14th state to impose some degree of E-Verify requirements. E-Verify is a federal program administered by the Department of Homeland Security and the Social Security Administration which allows - and in some cases requires - participating employers to electronically check the identity and work eligibility of their newly hired employees.
Governor Scott issued Executive Order No. 11-02 (the "Order") on January 4, 2011, within an hour of being sworn in as Florida's 45th governor. The Order went into effect immediately and imposes broad-reaching E-Verify requirements upon state agencies and entities receiving state contracts. Affected employers should closely watch as the requirements may evolve and develop in the face of likely challenges to certain aspects of the Order and as some unanswered questions are resolved.
All state agencies under the direction of the governor must verify the employment eligibility of all current and prospective agency employees through the E-Verify system. The Order also encourages agencies not under the governor's direction to utilize E-Verify to determine work eligibility of current and prospective employees.
Even more significant are the requirements imposed upon private businesses in Florida. State agencies under the governor's direction must include, as a condition of all state contracts, an express requirement that the contractors use
E-Verify to verify employment eligibility of:
- all persons employed by the contractor during the contract term to perform any duties within Florida; and
- all persons, including subcontractors, assigned by the contractor to perform work pursuant to the state contract.
The Order may have far-reaching effects for businesses awarded state contracts. First, there is no minimum contract value or duration triggering the requirement. No matter how small or short-term the state contract, E-Verify is required.
Second, the contractor must use E-Verify to check the eligibility of all employees performing any duties within Florida, regardless of whether the employees are specifically performing work pursuant to the state contract. In other words, a contractor awarded a state contract to construct a building in Tallahassee must screen not only those working in Tallahassee on the building project, but also all office staff it employs in Miami and all laborers on private projects in Jacksonville with no ties to the Tallahassee contract.
Finally, the Order also requires the contractor to verify the employment eligibility of all subcontractors who will perform work pursuant to its state contract. Thus, a general contractor with a state contract will now have to verify work eligibility for each and every employee of the many subcontractors it hires. This may also surprise employers headquartered outside Florida, who could find their Florida-based workforce subject to E-Verify requirements.
In spite of the relatively straight forward terms of the Order, the governor has left a number of questions unanswered. Based on the fact that the Order requires E-Verify as a condition of all state contracts, it appears that the E-Verify requirements will only apply to businesses obtaining state contracts after the effective date of the Order. However, it is not entirely clear that the governor's Order does not apply to those with existing state contracts.
One of the most troubling aspects of the Order is the requirement to verify the work eligibility of existing employees. If employers follow the mandate of Governor Scott's Order as it relates to verifying existing employees, they could be in violation of the E-Verify system itself. E-Verify expressly prohibits use of the system to verify employment for current employees, except in limited situations dealing with federal government contracts. Although legal challenges to the Executive Order are widely anticipated, the requirements are currently in force.
Another troubling aspect of the Order is the requirement to verify the work eligibility of subcontractors' employees since the data required by the E-Verify system is typically only available to employers and not third-party contractors. How a state contractor is to go about E-Verifying the employees of a subcontractor and what a subcontractor is to do with an existing employee who is not successfully E-Verified are unknown. One solution might be for prime contractors to insert flowdown provisions to compel their subcontractors to use E-Verify on their employees. However, because the Order requires the use of E-Verify for existing employees in apparent violation of federal regulations, the validity of such flowdown provisions would be in question.
In order to use E-Verify, an employer must register online and sign an agreement that legally obligates it to use the system for all new employees. E-Verify supplements the I-9 procedure and uses largely the same data, but it does not replace the I-9 obligation.
Because of the sensitive nature of the data, employers are required to use E-Verify in a manner that is nondiscriminatory and protective of employee privacy. Using E-Verify incorrectly can lead to significant problems for a company, ranging from I-9 audits to debarment from the E-Verify program to privacy and discrimination claims by employees.
If you have questions about Florida's E-Verify Executive Order or E-Verify in general, contact Grant Sovern at (608) 283-2668 / firstname.lastname@example.org, Otto Immel at (239) 659-5041 / email@example.com, Eric Ledbetter at (312) 715-5018 / firstname.lastname@example.org or your Quarles & Brady LLP attorney.