Alabama Employers Must Comply with E-Verify Rules of Use

By now, all Alabama employers must be enrolled in E-Verify to be compliant with Alabama’s immigration law. Enrollment is just the first step, however. Following E-Verify’s rules of use is a whole new ballgame.

I recently spoke at a legal conference for the Greater Pensacola Society of Human Resource Management regarding immigration worksite enforcement and E-Verify challenges. (I look for any excuse to go to the Gulf Coast.) Through the questions I received at the conference, I learned that many employers (in Alabama and elsewhere) are struggling with following the E-Verify rules.

And there is good reason for their confusion. I have heard other lawyers provide inaccurate information on this subject. For example, another lawyer told a group of employers that employers should E-Verify all existing employees (not just new hires) to make sure the employers’ workforces are authorized. Unless the existing employee is assigned to work on a qualifying federal contract, an employer is prohibited from E-Verifying existing employees.

The Verification Division of USCIS is monitoring E-Verify compliance by performing routine reviews of employers’ accounts. In other words, big brother is watching. Some of the more common rule violations or concerns that have been pointed out to employers via letters include:

•Failing to initiate E-Verify employment eligibility verification within three days of the hire date

•E-Verifying existing employees rather than new hires, unless authorized to do so

•Having an unusual number of Tentative Nonconfirmations (TNCs) that were uncontested by employees, which raises a suspicion of whether the employer is printing out the notices and allowing the employees to contest

•Verifying the same employee multiple times

•Failing to verify any employee for an unusual length of time, which might suggest that the employer is not verifying all new hires

In some of these cases, employers have been requested to contact the Verification Division through [email protected] within a short time frame after receiving its letter. Misuse or violations of E-Verify rules of use may result in action by USCIS or trigger an audit by ICE.

Procedures for using E-Verify may be found in the E-Verify User Manual for Employers. Additional information may be found here.

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.

To Comply With Alabama’s Immigration Law, Should I Just Hire Citizens?

Should an employer just hire U.S. citizens to avoid any risk of violating the Alabama Immigration Act, HB 56?  It’s not a trick question.  The clear answer is “No!”

For fear of running afoul of  HB56, and all the penalties contained therein for employing an unauthorized worker, an Alabama employer may conclude it is just best to hire only U.S. citizens, since hiring individuals who are permanent residents or authorized aliens, for example, is too risky.  That conclusion would a mistake.

On one side of the coin, you have the federal and Alabama laws that prohibit the knowingly employment of unauthorized workers.  On the other side of the coin, however, is the  anti-discrimination law enforced by the U.S. Department of Justice, Office of Special Counsel of Immigration-Related Unfair Employment Practices (“OSC”).  An employer must balance on a tightrope between these two compliance issues.

The anti-discrimination law prohibits a policy of hiring U.S. citizens, unless that policy is specifically required by federal law.  (For example, federal law may require that only U.S. citizens may have jobs that involve sensitive government or security information.)

Other types of prohibited discrimination include:

  1. Demanding specific or additional documents from an employee instead of allowing the employee to present any of the documents listed on the acceptable list of documents for I-9 form completion.
  2. Refusing to hire workers who sound or appear foreign.
  3. Demanding that lawful permanent residents present new “green cards” when theirs expire but not demanding U.S. citizens to produce new documents when theirs expire.

And don’t think that employers who violate the anti-discrimination laws are not getting caught and fined.   The OSC has published several cases on its website.

I believe that the OSC has a careful eye on states such as Alabama that have passed their own immigration laws, because it knows that an employer’s initial instinct may be to go beyond the permissible federal boundaries in attempting to comply with state law.

Per ICE Director, Audits of I-9 Forms Will Continue to Increase


ICE audits of employers’ I-9 forms will continue to increase in the coming years, so now is the time for employers to get ready.  John Morton, the Director of ICE, recently spoke at the Worksite Immigration Compliance Symposium at Stanford School of Law.

Director Morton was accompanied by a host of secret service officers.  The room was full so we found ourselves on the dreaded front row trying to eat our lunch and not make any sudden moves that may be interpreted by the secret service as some hostile act.

Director Morton’s message to the crowd was clear-ICE audits of employers will continue to increase in the coming years so employers better get their houses in order.  The “silent raids” involving the inspection of I-9 forms and issuance of fines for errors on such forms have no end in sight.  Since an employer has only three business days to turn over the I-9 forms after being served with an ICE notice of inspection, an employer’s decision to just wait and see is extremely risky.

We know from our internal audits of employers that the error rates often range between 50%-75%.  If you multiply the I-9 forms with errors by a possible fine of $1100, that is big money at issue.  Then there is the potential for negative press.  Even if the employer had no unauthorized workers, the headline might state something like, “Company fined for Immigration Violations.”  Such a headline implies something much more than just a paperwork problem.  Why take this risk when there are ways to clean up and get ready for the time when ICE comes knocking?

 The good news is that Director Morton and ICE are not keeping their intentions secret.  They are providing clear warning that more audits are coming.

What can employers do?

  1. Obtain experienced legal counsel to audit and provide guidance on correcting their I-9 forms during the relevant retention period.   Self-audits often lead to more problems.
  2. Develop compliant standard operating procedures to avoid future errors and ensure compliance in all immigration areas.
  3. Review the available guidance provided by the government, including the M-274 Manual for Employers, and the M-396 Guide to Selected U.S. Travel and Identity Documents.  Warning:  the guidance provided by the government does not answer all the questions and sometimes is confusing or even conflicting.