State E-Verify laws show mixed results

When employers think of “mandatory E-Verify,” they tend to focus on the FAR rule (also known as the federal contractor rule) which can impact employers on a profound level – requiring them to E-Verify both new and current employees based on receipt of a “covered contract.” Often overlooked however, are the myriad of state E-Verify laws which have been proliferating at an alarming pace. These state laws are difficult to track, frequently subject to legal challenges, and often lacking in enforcement provisions. Recent news reports from Arizona and Mississippi (two of the “mandatory E-Verify” states) highlight the challenges and successes in implementing a localized E-Verify requirement.

Arizona Employers Slow to Adopt
No, we’re not talking about SB1070 here, but rather the Legal Arizona Workers Act (LAWA), which was enacted in 2007 and signed by then-Governor Janet Napolitano. In essence, LAWA requires all businesses in the state to use E-Verify to check the employment eligibility of newly hired employees. In exchange, an employer found to be employing undocumented workers would benefit from a “rebuttable presumption” that it did not knowingly or intentionally do so if the business was using E-Verify at the time of the violation. Employers failing to participate may be denied economic development benefits and be forced to repay any benefits previously obtained from the state. Despite these dire consequences, the Arizona Republic reports that only a third of the state’s estimated 100,000 employers have signed up for E-Verify. While this fact alone does not tell the whole story (employers, after all, are not necessarily hiring these days), federal employment data and statistics obtained by the Arizona Republic suggest that hundreds of thousands of workers have been hired in the state without being submitted to E-Verify. For example, according to the Republic, Arizona employers made more than 1.3 million new hires in the last fiscal year but ran only 730,000 E-Verify checks. Part of the issue is enforcement, or rather, the lack thereof. Since the law took effect in 2008, only two companies have faced sanctions and no employer has lost its license. Arizona, like many states, does not track who is using E-Verify and doesn’t have the resources to go after the “mom and pop” businesses which may be ignoring the law. Some employers have also complained that the setup and training required for E-Verify is onerous, especially for small companies without HR departments.

Mississippi sees success in numbers
Then, there’s Mississippi. The Mississippi Employment Protection Act mandates a phased-in E-Verify requirement that will eventually force all employers in the state to utilize E-Verify. Currently, the E-Verify requirement applies to state agencies, all public contractors, and private employers with at least thirty (30) employees. By next July, the law will cover all employees. The Mississippi law also has teeth: penalties for non-compliance include the cancellation of any state or public contracts, and ineligibility for any state or public contract for up to 3 years. An employer may also have its business license revoked for up to 1 year. Unlike the Arizona law, however, the Mississippi measure appears to be gaining traction, at least in terms of raw E-Verify queries. According to a recent article in the Jackson Advocate, Mississippi employers have submitted 210,086 queries thus far in 2010, compared with 107,093 queries made in all of fiscal year 2008. The growth in numbers (which occurred during the hardest time of the recession) is most likely due to the legislation, which most recently expanded to include medium to large size employers. There is also the possibility that many employers have been jumping on the E-Verify bandwagon as a result of the federal contractor rule. Despite the overly rosy tone of the article, it’s still uncertain whether the Mississippi law is achieving the desired results or merely adding on to employers’ burdens. Some employers still complain of the logistical headaches of implementing a new system and process, especially one that has “compliance” consequences if done improperly.

What does the future hold?
Judging from recent activity, states will continue to legislate in this area until Congress can address the problems of employment eligibility verification on a national scale. Most recent case in point: several counties and cities in Washington State have been implementing laws and ordinances that demand employers (or certain groups of employers) to use E-Verify. Just this week, the Centralia City Council approved the first reading of an ordinance (5-1 count) which will require contractors who work with at least $1,000 in city funds to use E-Verify. As previously reported, 4 counties in Washington have implemented some form of E-Verify requirement, affecting public contractors. For the latest news on State requirement and all things E-Verify, please subscribe to our blog and make sure to visit our interactive E-Verify State Map.