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E-Verify: The Top 10 Mistakes Companies Make

Labor & Employment Law Update Eric D. Ledbetter, Grant Sovern, Otto W. Immel

E-Verify, a relatively new federal program administered by the Department of Homeland Security ("DHS") and Social Security Administration ("SSA"), allows participating employers to electronically check the identity and work eligibility of their employees. Some companies are required to use E-Verify either because they have qualifying federal contracts/ subcontracts under the Federal Acquisitions Regulations ("FAR") or because they operate in a jurisdiction where it is required - Arizona, Mississippi or South Carolina, for example. However, the program is strictly voluntary for the vast majority of companies.

In order to participate, 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. The following are some of the top mistakes a company should take precaution against with respect to E-Verify:

1. Voluntarily registering for E-Verify when it may not be in your company's best interest.

Although DHS does not charge for access to the E-Verify database, there are still associated business costs in terms of developing a policy and procedure, training staff, and ensuring compliance. Most importantly, E-Verify can create the potential for significant legal liability in the form of government audits, and employee complaints of privacy and discrimination violations. Before your company signs up, you should have a clear idea of the potential costs and benefits, and should evaluate whether you have adequate compliance funds and HR staffing levels to roll out a major new hiring procedure.

2. Registering the whole company for E-Verify at once when a controlled rollout might work better.

Employers are allowed to introduce E-Verify on a per worksite basis. This can be enormously beneficial for large companies with operations in multiple locations. Businesses that slowly implement E-Verify over the course of several weeks or months are often in a better position to control the impact of its introduction into the workplace.

For example, suppose a company operates in Illinois, Wisconsin and South Carolina. Suppose further its Wisconsin facility has a federal contract requiring the use of E-Verify that goes into effect on June 1, 2010. The company might well decide to register the South Carolina operation today, since E-Verify is universally required in that state. But, it might wait until the contract goes into effect June 1, 2010 to register the Wisconsin facility. In Illinois, where the choice is optional, it might postpone registration until a later date, if at all. This could be particularly helpful since Illinois has the toughest E-Verify compliance laws in the country.

3. Signing up for E-Verify and then not using it.

Once a company signs up for E-Verify, it is legally required to use it for every new hire and, in the case of federal contractors, for existing employees working directly on the contract. Companies that register for E-Verify and then fail to use it could face debarment from the program. Therefore, making them ineligible for federal contracts and from operating in jurisdictions where E-Verify is required. In addition, failing to use E-Verify could trigger a company-wide I-9 audit by U.S. Immigration & Customs Enforcement ("ICE"). If an unauthorized worker is subsequently identified by ICE, the failure to have used E-Verify to check that person's work eligibility at the time of hire could lead to civil or even criminal charges. For these reasons, it is imperative for participating companies to use E-Verify in a systematic manner.

4. Signing up for E-Verify without a strategy and company policy in place first.

It is essential to have a policy and operating procedures before your company starts using E-Verify. You will need to decide which sites are participating and when. You should also decide which HR members will have access to E-Verify and ensure their training and certification. Legal notices about the company's use of E-Verify, as well as employee privacy and nondiscrimination rights must also be posted. If you operate in Illinois there are additional state level obligations to consider. The best way to introduce E-Verify and minimize costs and potential legal liability is to develop a policy and operating procedures first, then train your staff, and finally introduce it across your company in a measured way.

5. Not initiating E-Verify queries on time.

There are several timelines to be aware of with E-Verify. Federal contractors have 30 days from the award of their FAR contract to register for E-Verify. If they are already registered, they have 30 days to change their E-Verify account designation to federal contractor. After registration, they have 90 days to initiate E-Verify queries for all new hires and existing employees working directly on the contract. If they choose to check all existing employees, they have 180 days to do so. Companies that voluntarily register for E-Verify (i.e., non-federal contractors) must begin using it to verify all new hires immediately upon registration. There is no grace period for voluntary registrants.

At the employee level, the timeline for an individual's E-Verify query is similar to the I-9 timeline. A query must be initiated after the I-9 process has been completed and before the end of the third day of employment. Employers must follow this timeline precisely, as noncompliance could lead to government audits and/or employee claims of privacy and discrimination violations.

6. Accepting a "List B" identity document without a photo.

The document requirements for E-Verify are largely the same as the Form I-9 requirements, with one significant exception. When an employee presents a combination of identity (List B) and work eligibility (List C) documents, the employer may only accept the identity document if it contains a photograph. The photograph will correspond to an electronic photo tool in the E-Verify system that helps employers authenticate the identity of new-hires.

7. Taking adverse action against an employee who contests a Tentative Non-Confirmation ("TNC").

When the E-Verify system cannot confirm that an employee's I-9 data matches DHS and SSA records, it will issue a TNC. A TNC does not necessarily mean that an employee is unauthorized to work in the United States. The employer must notify the employee as soon as reasonably possible and provide them with an opportunity to contest the TNC and attempt to resolve the discrepancy. The employer must not terminate the employee or take other adverse action, such as delaying training or project assignments, or pushing back the start date itself. For all purposes, a TNC employee should be treated like any other employee until such time as E-Verify resolves the discrepancy and issues a final confirmation or non-confirmation.

8. Using E-Verify for illegitimate reasons.

The E-Verify system provides access to private information about millions of U.S. workers. An employer must take steps to make sure the E-Verify system is used for the right purpose, at the right time, and by the right persons. Employers must safeguard E-Verify account login information and never permit untrained or uncertified personnel to conduct E-Verify queries. Failure to take these steps could lead to significant legal liability.

9. Using E-Verify in a selective, sporadic or discriminatory manner.

E-Verify should be used for every new hire, including U.S. citizens. As with the I-9 process, an employer must not ask for more or different documentation than is legally required on the Form I-9 (with the exception of the List B photo requirement discussed above). Nor should they reject I-9 documents that appear to be genuine and reasonably related to the employee. The employer must also post the mandatory E-Verify notice from the Department of Justice to inform employees and potential employees of their rights.

10. Not checking back frequently on outstanding TNCs.

If an employee elects to contest a TNC, it can take days or longer for the discrepancy in the record to be resolved. During this time, the employer is obligated not only to continue employment without any adverse treatment as discussed above, but also to check the E-Verify system daily for updates. When DHS converts the TNC into a Final Non-Confirmation, the employer will be under an obligation to complete the E-Verify query and terminate the employment.

If you have questions about your immigration, I-9, E-Verify compliance programs or need help conducting a self-audit of your I-9 documentation, please contact attorney Eric Ledbetter in Chicago at 312-715-5018 / [email protected], Benjamin Kurten in Milwaukee at 414-277-5851 / [email protected], Grant Sovern in Madison at 608-283-2668 / [email protected], Otto Immel in Naples at 239-659-5041 / [email protected] or your Quarles & Brady attorney.

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