• Employer Obligations Under Tennessee's "Non-Mandatory" E-Verify Law
  • December 8, 2011
  • Law Firm: Kramer Rayson LLP - Knoxville Office
  • E-Verify is a web-based employment verification system administered by the Department of Homeland Security and the Social Security Administration. Over the past few years, several states have addressed a perceived shortcoming in federal immigration law by passing state laws requiring the use of E-Verify in certain circumstances, as well as other laws to address and/or curb illegal immigration.

    The Tennessee Legislature recently passed the Tennessee Lawful Employment Act ("the Act") which requires employers to either (1) enroll in E-Verify and check all new hires in the system; or (2) request and maintain a copy of an identification document for each new hire. The acceptable identification documents include a valid state-issued driver's license or photo identification, an unexpired U.S. passport, a lawful permanent resident card, a U.S. birth certificate or certificate of birth abroad, a U.S. certificate of citizenship or naturalization, or other proof of immigration status and work authorization.

    Note that an employer must select one of these alternatives of compliance with the Act for all of its new hires. In other words, it cannot E-Verify a portion of its employees and maintain document of identification for others. Employers are under the same obligation of consistent treatment of employees under federal employment verification laws.

    The Act will become applicable to employers in phases, beginning on January 1, 2012, and depending on the size of the employer. Employers with five (5) or fewer employees are exempt from the law. Government employers, and employers with 500 or more employees, must comply by January 1, 2012. Employers with 200 to 499 employees must comply by July 1, 2012. Employers with six (6) to 199 employees must comply by January 1, 2013.

    Despite an employer's existing obligation to confirm the identification and employment authorization of its employees pursuant to the I-9 regulations of the Immigrant Reform and Control Act ("IRCA"), there are at least a couple of different and/or additional obligations imposed by the Tennessee Law. First, the Act requires employers to maintain a copy of the identification document. I-9 regulations do not impose a requirement that the document be maintained, only that it be examined and recorded on the I-9 Form. Similar to the federal law, the Tennessee Lawful Employment Act requires the employer to maintain the documentation for the later of three years after the employee's hire date or one year after his termination date.

    The other provision in the Act that differs from existing federal law is the requirement that employers maintain the required documentation for a "non-employee providing labor or services," such as an independent contractor. Such individuals cannot be confirmed using E-Verify; therefore, the employer must obtain and maintain an identification document for these workers. Federal I-9 regulations, on the other hand, contain an exception to the employment verification requirement for independent contractors.

    Several important issues remain unclear from the language of the Act, for example, whether an employer may select the identification document to be presented. Under I-9 regulations, employers are specifically prohibited from requesting a particular document and must accept whatever document the employee provides as long as it is listed on the I-9 Form and appears to be genuine and relate to the individual. Failure to comply with this provision of the federal law could result in evidence of national origin discrimination on the part of the employer.

    It is also unclear by what date the employer must obtain the required documentation. The Act could be read to require that the employer have the documentation prior to the employee beginning work; as opposed to the federal law which gives employers three (3) days to obtain such documentation. This additional obligation could be quite burdensome for employers.

    Finally, the Act does not appear to distinguish between in-state and out-of-state employers. For example, would an employer operating in several states be required to utilize E-Verify only for employees in Tennessee? If so, this could have the potentially damaging effect of employers relocating their operations to other states. On a related issue, it is unclear whether the total number of employees for purposes of determining the law's effective date includes only those employees working in Tennessee, as opposed to at the employer's operations in other states.

    But regardless of these unresolved issues, the bottom line is that the Act does not appear to impose significantly greater obligations than employers already have under existing federal law.

    A violation of the Act occurs when an employer fails to obtain E-Verify confirmation, or to request and maintain a copy of one of the specified identification documents. Like the federal law, the Act provides the employer with an absolute defense, or "Safe Harbor," to employment of an illegal alien under this legislation if it uses E-Verify. This defense is not available if the employer uses the alternative method of obtaining one of the listed identification documents.

    The penalties for violating the Tennessee Lawful Employment Act are as follows:

     (1) First offense = $500 penalty + $500 per employee or non-employee not verified or for whom a copy of identification documentation is not maintained;

    (2) Second offense = $1,000 penalty + $1,000 per employee or non-employee not verified or for whom a copy of identification documentation is not maintained; and

    (3) Third offense = $2,500 penalty + $2,500 per employee or non-employee not verified or for whom a copy of identification documentation is not maintained.

    And under existing Tennessee law, an employer may have its business license revoked or suspended for employing an unauthorized worker, until it provides a sworn statement that it no longer employs illegal workers. A second violation within a three-year period will result in the suspension of the employer's business license for at least one year.

    The Tennessee Department of Labor and Workforce Development ("TDOLWD") can provide assistance for employers wishing to enroll in E-Verify who do not have internet access. That agency also investigates any complaints regarding violation of the Act, which can be made by any "lawful resident" of the state. It is also the TDOLWD that is authorized to promulgate the rules and regulations to effect and enforce the Act; and in doing so hopefully clarifying some of the unresolved issues discussed above. What is clear is that Tennessee employers are facing the ever more complicated task of complying with a mishmash of federal and state laws and regulations designed at confronting illegal immigration.