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.