North Carolina

In line with a trend that has been developing in recent years on a state level, North Carolina recently enacted a bill that will require employers that employ 25 or more individuals in the state to use E-Verify. The new requirement will be rolled out over the next two years based on the size of the employer. Employers with 500 or more employees must begin using E-Verify for new hires by October 1, 2012; employers with 100 or more employees must comply by January 1, 2013; and employers with 25 or more employees must begin using the system by July 1, 2013. The law also requires local government entities (regardless of size) to use E-Verify by October 1, 2011. State government agencies and universities were, pursuant to an existing rule, already required to use the system.

The law includes an interesting exception. For temporary and seasonal employees (those employed for 90 or fewer days during a 12-month period), employers are not required to use E-Verify. Generally, though, employers who register for E-Verify are required by federal law to use the system for all new hires. As such, employers should be careful about relying on this exception and must ensure that they comply with federal E-Verify rules.

Under the North Carolina law, employers must retain the E-Verify record for as long as the employee is an active employee and for one year after termination. The federal retention requirement for I-9s, however, may require employers to retain the E-Verify data longer.

Employers who violate the new law may be fined as much as $2,000 for each employee whose employment authorization was not confirmed using E-Verify.

The text of the ratified bill is available here.

Alabama

Alabama has joined Arizona and Georgia on the list of states with the toughest immigration laws in the U.S. The new law, as of April 1, 2012, will require all employers in the state to use E-Verify to confirm the work authorization of all new hires. For those employers that contract with the state, the requirement may take effect earlier: state contractors will be required to use E-Verify beginning as early as September 1, 2011. In order to enter into a new state contract on or after April 1, 2012, an employer must provide proof of E-Verify registration.

For employers who do not have state contracts, there is no direct penalty for failing to use E-Verify. However, those employers found to knowingly hire unauthorized workers could face suspension or revocation of business licenses.

For state contractors, the penalties for failure to use E-Verify are steeper and may include cancellation of the state contract, liability for breach of contract, and/or suspension or revocation of business licenses.

Indiana

Indiana has enacted a tamer E-Verify law. Beginning July 1, 2011, employers entering into or renewing contracts with the state or local governments will be required to use E-Verify. State and local governments, as well as those receiving government grants of more than $1,000, must also use E-Verify for all new hires.

The Indiana law encourages all employers in the state to use the E-Verify system. Certain state income tax credits and deductions will be unavailable to employers for employees who turn out not to be authorized to work, but there is a safe harbor for those employers who voluntarily use the E-Verify system.