On June 14, 2011 House Judiciary Committee Chairman Lamar Smith (R-TX) introduced H.R. 2164, entitled the “Legal Workforce Act.”  The proposed bill amends the existing Immigration and Nationality Act to require employers to participate in the national E-Verify system, an internet-based program used to determine worker eligibility in the United States by matching potential employees against databases maintained by the Social Security Administration and the Department of Homeland Security. According to the General Accountability Office (GAO) the E-Verify program was initiated by Congress in the late 1990s. It was voluntary and available to just a few states. In 2004, it became available to all 50 states. North Carolina now joins just 16 states that have some form of E-Verify requirements.

Even within those states that utilize E-Verify there exists a great deal of discretion surrounding employment eligibility requirements. Based on feedback from many employers, laws governing worker eligibility is subjective and varies dramatically depending on the state your business operates. In many cases employers have run into duplicative and sometimes contradictory legal requirements. The introduction of H.R. 2164 represents a distinct shift in hiring practices that attempts to provide a level of consistency to workforce eligibility verification.  To date, the bill has garnered a significant amount of bi-partisan support as well as an endorsement by the U.S. Chamber of Commerce.

If adopted H.R. 2164 is expected to significantly change the manner in which public and private employers verify worker eligibility. Under H.R. 2164 the existing paper-based I-9 system is replaced with an electronic work eligibility check. According to proponents of the legislation the current paper system is easily beaten by those attempting to obtain employment under false pretense and is therefore plagued by widespread document fraud. In addition to an electronic I-9 system employers will also be required to utilize E-Verify to perform a background check which will be run electronically to match pertinent information against Social Security information and, potentially, IRS data.

If enacted the bill will pre-empt state laws and allow for a more comprehensive policy regarding enforcement. Proponents of the bill expect the legislation to reduce employment verification disparities and close loopholes for those attempting to secure wrongful employment. According to the U.S. Chamber of Commerce, H.R. 2164 goes far to protect private companies during the hiring process by ensuring employers have the tools necessary to make appropriate and legally defensible employment decision.

H.R. 2164 is scheduled to come to vote in July under an open rule that allows amendments. If the bill is adopted implementation will be phased in gradually. The bill calls for large companies to begin using the new system as early as October, 2012 then gradually incorporating smaller companies beginning in October, 2013. The law exempts companies with less than 25 employees and seasonal workers who are employed in the agriculture sector full-time for 90 days or less during the year. If adopted into law companies failing to comply with the new system will face an initial warning followed by a series of fines if they continue to refuse the system checks.

As legislation develops please look for continued updates from the Partnership.  We would like to request feedback from our members and manufacturers in Henderson County as to their thoughts on this bill and the prospective impact to doing business here.  Please email [email protected] to provide feedback on the proposed legislation.