Overview. The Tennessee Lawful Employment Law Act (“E-Verify Act”) was recently amended in an effort to minimize the compliance burden on small businesses, and also to strengthen the authority of the Tennessee Department of Labor (TDOL) to pursue violators. Effective January 1, 2017, private employers with at least 50 employees are required to enroll in the E-Verify program and use the system to verify employment eligibility for newly hired workers. In addition, the amendment authorizes the Tennessee Department of Labor (TDOL) to pursue employers that knowingly violate the E-Verify Act.
Effective Date. Amendments take effect, January 1, 2017
Details. U.S. law requires companies to employ only individuals who may legally work in the United States – either U.S. citizens, or foreign citizens who have the necessary authorization. E-Verify is the Internet-based system that allows businesses to determine the eligibility of their employees to work in the United States by comparing information from an employee’s Form I-9, Employment Eligibility Verification, to data from U.S. Department of Homeland Security and Social Security Administration records to confirm employment eligibility. For most U.S. employers, use of the E-Verify system is voluntary. However, more and more states are beginning to mandate its use by both public and private employers. Tennessee is among those states.
Under the current Tennessee law, all private employers with six or more employees must register and utilize E-Verify or request and maintain one of the listed identity/employment authorization documents from a newly hired employee or non-employee. In determining the number of employees, the employer must count all employees whether employed in Tennessee or outside of Tennessee. Note that while this list is extensive, it is less broad than the list of acceptable documents for Form I-9 purposes and, in fact, includes documents that are not presently acceptable under federal law (i.e., certificates of citizenship and naturalization).
For Form I-9 purposes, employers cannot specify which documents an employee will provide to prove employment eligibility. Accordingly, any requests for a specific document may be made for compliance with the Tennessee law only.
As amended, the E-Verify Act will require private employers with 50 or more employees to enroll in the E-Verify program. The new E-Verify Act will also require these employers to verify the employment eligibility of new hires through the program.
Employers who knowingly fail to enroll in the E-Verify program will be subject to a $500 penalty. An employer who fails to enroll after having received notice from the TDOL will be subject to an additional $500 daily penalty. In addition, the amended E-Verify Act will allow the TDOL to conduct an investigation to determine an employer's compliance. Employers with six or more (but fewer than 50) employees will remain subject to the current law, which provides the alternative of utilizing E-Verify or requesting and maintaining certain identification documents (i.e., unexpired passports, birth certificates, or state-issued identification).
Call to Action. Affected employers with operations in Tennessee should prepare to comply with the amendments and ensure that they are registered for E-Verify by the effective date of the amendments.
As always, please be sure to contact your Relationship Manager or Service Team if you have any questions.