E-Verify is an internet-based system that compares information from an employee’s Form I-9, Employment Eligibility Verification, to data from Social Security Administration, U.S. Department of Homeland Security, and U.S. Department of State records to confirm employment eligibility.  As is normally required, the employer and employee must first complete the I-9 form.  The employer then enters the information into the E-Verify system, which compares the employee’s information against information in SSA and DHS databases.  If the information matches, E-Verify returns an “Employment Authorized” result which confirms the employee is authorized to work.

If there’s a mismatch, E-Verify returns a “Tentative Nonconfirmation” (TNC) result.  The employer must print and review a notice with the employee that explains the mismatch. The employee can contest the mismatch and has 8 days to resolve the problem.  If the employee successfully resolves the mismatch, E-Verify returns a result of employment authorized.  If not, E-verify returns a “Final Confirmation” result requiring the employer to terminate the employee or risk knowing hire violations.

Verification of employment authorization through E-Verify creates a rebuttable presumption that the employer has not knowingly hired an authorized worker.  However, it does not provide a “safe harbor” from worksite enforcement.

Who is required to use it?

Under federal law, there are three scenarios where employers are required to use E-Verify:

1) Those ordered to do so by an Administrative Law Judge in Office of the Chief Administrative Hearing Officer proceedings where they found to have violated the employer sanctions or anti-discrimination provisions of the law;

2) Those seeking to employ F-1 students in STEM field of study who are eligible for a 17-month extension of OPT; and

3) Certain federal contractors and subcontractors.  It is important to review any contracts awarded or renewed after 9/8/2009 to determine if E-Verification participation is required.  Unlike the I-9 process and the traditional E-Verify program, the clause in federal contracts requires verification of all new hires regardless of whether the employee will be assigned to a federal contract, and re-verification of all existing workers who will be working on the contract.

E-Verify requirement applies to federal contracts with a performance period longer than 120 days and a value of $150,000 or more.  It also applies to subcontractors if the value of the subcontract is over $3,000.  Exempt contracts include those that are for less than $150,000, for less than 120 days, and those that are for commercially available off-the-shelf items.

A number of states, including all of the Southeast ones, require all or some employers to utilize the E-Verify program to verify status of new hires.  The following states currently require all employers to use E-Verify:  Alabama, Arizona, Georgia (>10 employees), South Carolina, Tennessee (>5 employees) and Utah (>14 employees).  The following states currently require some state contractors to use E-Verify:  Colorado, Florida, Georgia, Indiana, Louisiana, Minnesota, Missouri, Nebraska, Oklahoma, Pennsylvania, Utah and Virginia.

If optional, should you use it?

There is a growing trend toward requiring more employers to utilize E-Verify, but for the vast majority of employers nationwide participation in E-Verify remains voluntary.  At this point overall participation is at about 3% of the total employer population.  Frankly, the cons of participation in E-Verify still vastly outweigh the pros.

E-Verify does not eliminate the need for the I-9 verification process, and thus is an additional administrative burden.  E-Verify is still, at least in part, a paper-based system because of its reliance on a review of documents, and it is unable to detect many forms of document fraud and identify theft.  E-Verify does not authenticate the identity of the person presenting the documents.  It only verifies that the data on the documents matches the information in the federal databases.

While there has been significant improvement in E-Verify’s data accuracy, mistakes in the system still abound in the form of false non-confirmations, which are caused by inaccuracies in the SSA and DHS databases.  This results in an administrative burden on employers, and inconvenience and financial hardship to the employee if there is an erroneous final confirmation.

Employers who participate in E-Verify cannot be held civilly or criminally liable for action taken in good faith reliance on E-Verify’s confirmation system – for example if the employer receives a final confirmation notice and terminates the employee, it can’t be charged with discrimination later if it turns out that the worker in fact was work authorized.  Some employers may find participation beneficial as a way of demonstrating to the government their good faith efforts to comply with the employer sanctions of the law, especially for employers in “high risk” industries with regard to the employment of unauthorized workers.  Nevertheless, participation in E-Verify doesn’t excuse an employer’s failure to properly complete I-9 forms.

There might be some limited advantages to participating in E-Verify, but the general rule is that employer should participate in E-Verify only if required by federal or state law.  At least for now – until the eventuality of all employers having to use E-Verify.