Are We Seeing Enforcement of Alabamas Immigration Law? Maybe So

Some Alabama employers recently received an interesting letter from the Alabama Department of Labor that goes something like this:

An audit of your wage report for the quarter shows incorrect/invalid social security numbers were reported.  Please review the attached printout and provide the correct social security numbers of each employee.  Listed below are the acceptable documentations to be submitted:

Copy of valid social security card

Proof of validation through U.S. Citizenship and Immigration Services E-Verify website

Failure to respond WITHIN 30 DAYS may result in taxes and/or penalties.

A letter pointing out a discrepancy with a social security number is not that surprising, but the Alabama Department of Labors request for E-verify confirmations is a little bit of a shock and leads to some questions, such as:

  • Is the Alabama Department of Labor trying to enforce the Alabama Immigration Law by confirming that employers are using E-verify?  (Im not sure the Alabama Department of Labor has the authority to ask for E-verify confirmations on the same basis as the federal government agencies such as ICE).
  • Is this letter about ensuring employees are work authorized?
  • What will be done with the information provided to the Alabama Department of Labor?

While the answers to these questions are unclear, employers who receive these letters should proceed cautiously in contacting the applicable employees and asking for documentation to confirm their social security numbers.  There are implications both in terms of avoiding discrimination claims investigated by the Office of Special Counsel and in terms of avoiding worksite enforcement fines by ICE.

These letters suggest that the Alabama Department of Labor actually may be kickstarting enforcement of state law, HB56, that requires that employees be work authorized.  Remember that HB56 Section 15 violations includes business license suspension for 10 days for the first offense.  That could be painful.

President Obama’s announcement of granting Deferred Action to the Dreamers might affect Alabama’s Immigration Law

Many may wonder how President Obama’s recent immigration action might affect Alabama’s immigration law.  First, let’s examine what President Obama did.  President Obama directed the U.S. Department of Homeland Security to grant “deferred action” on a case-by-case basis to certain potential DREAM (“Development, Relief and Education for Alien Minors”) Act beneficiaries.   “Deferred action” means that DHS (or ICE) will not deport or remove, or initiate proceedings to deport or remove, the individual. Those who meet the criteria described below will be eligible to receive deferred action for a period of two years, subject to renewal, and will be eligible to apply for work authorization.  Being granted deferred action, however, does not give an alien a path to permanent residence, lawful status, or citizenship.

The following are the minimum criteria these potential DREAM Act beneficiaries will have to meet to benefit from deferred action:

1.) Entered the United States while under the age of 16;

2.)  Continuously resided in the United States for at least five years preceding the of the announcement and are currently present in the United States;

3.)  Currently enrolled in school, graduated from high school, obtained a general education development certificate, or honorably discharged from the Coast Guard or Armed Forces of the United States;

4.)  Not convicted of a felony offense, a significant misdemeanor offense, multiple misdemeanor offenses, or otherwise pose a threat to national security or public safety;

5.)  Not older than 30 years of age.

Now, this is the important part: the period in which these potential DREAMERS are granted deferred action will be considered a period of stay authorized by the Attorney General. In my opinion, during this period they will be considered to be lawfully present in the United States and thus they may be eligible for certain Federal and State benefits, even though they do not have lawful status.

This deferred status may impact the enforcement and application of Alabama’s immigration law because many sections of the law apply only to those who are not lawfully present in the United States. So, for example, those individuals granted deferred action may be permitted to enroll and attend post-secondary education institutions in Alabama, enter into public records transactions with the state (e.g., apply for or renew a driver’s license or business license), and as mentioned above, be eligible for employment.  Time will tell the real impact.

Important Changes to the Alabama Immigration Law

On Friday, May 18th, Governor Bentley signed HB658, which makes significant changes to Alabamas immigration law (commonly known as HB56 or the Act).  While there are many changes to the law, this high level summary focuses on the major changes that impact Alabama employers.

First, let’s look at the definition section of HB658.

1. The definition of Business Entity was clarified to include only entities that employ one or more persons. So, for example, an LLC that is a holding company and has no employees would not be required to enroll in E-Verify.

2. The definition of State-Funded Entity was modified to clarify that companies that only provide a service or a product to the State or a political subdivision thereof are not considered a state-funded-entity for purposes of the Revised Act.

3. The new definition of Sub-Contractor narrows the scope of the term to mean that only a person or entity awarded a portion of an existing contract by a contractor will be considered as a sub-contractor under HB658.

Second, let’s look at the changes to Section 9, dealing with State contractors.

Section 9 of the HB658 delineates the responsibilities and penalties mandated for those companies that want to do business with the State of Alabama or a political subdivision thereof. This section is the one with the most relevant changes for employers that do business with the State and other Alabama governmental entities.

HB658 eliminated the requirement of providing compliance affidavits as a condition for the award of a contract, grant, or incentive by state, county or municipal governments in Alabama.  However, Contractors will still be required to demonstrate proof of enrollment in E-Verify.  Furthermore, HB658 will require that all state, county and municipal contracts contain the following clause:

By signing this contract, the contracting parties affirm, for the duration of the agreement, that they will not violate federal immigration law or knowingly employ, hire for employment, or continue to employ an unauthorized alien within the state of Alabama. Furthermore, a contracting party found to be in violation of this provision shall be deemed in breach of the agreement and shall be responsible for all damages resulting therefrom.

HB658 narrows the scope of applicability of Section 9 to only employees and employers in Alabama.

While HB658 eliminates the requirement that contractors obtain affidavits of compliance from their sub-contractors in order to avoid liability for their violations, it imposes a new constructive knowledge standard for contractor liability for the violations of sub-contractors assigned any portion of a state contract. In practice, this means that contractors will have to use reasonable care to ensure that their sub-contractors are in compliance with the Alabama law.  Furthermore, HB658 narrows the scope of the E-Verify safe harbor provision for State contractors to only apply to employees that have been E-Verified.

HB658 also modified the penalty structure for violations of Section 9. The most important modification is that under the revised Act, a court must find that an employer has a policy or practice that violates Section 9 before ordering the suspension or revocation of business licenses or permits.

Finally, let’s talk about Section 29, Business Transactions with the State.

HB658 redefined this section to apply only to “Public Records Transaction” and clarifies that it is only applicable to efforts to secure a driver’s license, motor vehicle license plate, non-driver ID, commercial license, or professional license applications. Further, the revised act exempts marriage licenses and transactions relating to housing or the ownership of real property, including payment of property or any other tax.

Applicants will still be required to prove either citizenship or lawful presence in the United States for all initial applications for a public records transaction, but Citizens and Permanent Residents will be exempt from proving lawful status for subsequent public records transactions after the initial verification is made.

If an Alabama Company has no employees should it enroll in E-Verify to be in compliance with Alabama’s Immigration Law?

The answer used to be murky.  However,  HB658 has narrowed the scope of the definition of the term “Business Entity” to include only entities that employ one or more persons.

This is an important change, because under HB56 it was unclear whether a company that had no employees was required to sign up and enroll in E-Verify. When we were studying HB56, Jeff Starling, our L&E Section Chief, said, “It appears that even my hunting ranch must sign up for E-Verify.”  At the time, our conclusion was yes, if you want to comply with HB56 then even if your business entity is a family trust, a hunting ranch, etc., that has no employees, you must enroll in E-Verify.  

This created a big problem for Alabama businesses, because it put us in the crosshairs of the E-Verify requirements. The E-Verify Memorandum of Understanding (“MOU”) speaks in terms of “Employer” not “Business Entity.” Careful reading of the MOU reveals that by enrolling in the program the Employer has to comply with a series of obligations like posting notices, taking tutorials, nor using E-Verify for any other purpose that is not authorized by the MOU.  In order to sign up for E-Verify you must provide information like your Employer Identification Number, number of employees and hiring sites where verification will occur.  All of these compliance requirements for business that did not have employees would have been extremely burdensome for Alabama companies.

Now, with HB658 this issue has been clarified and Jeff’s hunting ranch is no longer required to enroll in E-Verify until that time as he decides to hire one or more employees.