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.