Tennessee and Alabama joined the growing list of states requiring certain employers within the state to use E-Verify when hiring new workers.  The Alabama law broad implications for individuals who are unlawfully present in the United States.  Below, we will highlight the aspects of the statutes that impact employers doing business in Tennessee and Alabama.

 Alabama

The Alabama law prohibits any employer or business entity, as a condition for the award of any contract, grant, or incentive by the state or any political subdivision of the state, from knowingly hiring or continuing to employ an unauthorized alien.  The business entity must attest by sworn affidavit that it shall not knowingly hire or continue to employ an unauthorized alien.  The employers receiving such contracts, grants, or awards must also enroll in the federal government’s E-Verify program, and E-Verify every employee that is required to be verified according to the applicable federal rules and regulations.  The law also flows down to subcontractors.  This section of the statute takes effect on January 1, 2012.

Effective April 1, 2012, every business entity or employer in Alabama must enroll in E-Verify and, in accordance with the federal rules and regulations governing E-Verify, must use E-Verify to verify the employment eligibility of employees.  (With the exception of covered federal contractors, E-Verify permits the verification of employees hired after the employer enrolls in E-Verify.  Employers may not go back and E-Verify existing employees, unless required to do so as a federal contractor.)  Failure to obey the statute could result in the business losing its licenses and permits to operate in Alabama.

The statute prohibits an employer from deducting as a business expense for any state income or business tax purposes in Alabama any wage, compensation, or remuneration paid to an unauthorized alien.  An entity that violates the provision is subject to a penalty equal to ten times the business expense deduction claimed.

The law makes it a discriminatory practice for a business entity or employer to fail to hire a job applicant who is a U.S. citizen or an alien authorized to work in the United States or to discharge such an individual while retaining or hiring an employee the business entity or employer knows or reasonably should have known is an unauthorized alien.  The statute provides for a civil cause of action in Alabama state court.  The aggrieved applicant or employee may recover compensatory relief.  The statute provides for prevailing party attorneys’ fees and costs but limits the amount of fees payable to the prevailing party to the amount the losing party paid to his or her attorney.

The statute makes it a Class A misdemeanor to conceal, harbor, or shield or attempt to conceal, harbor, or shield an alien from detection in any place in Alabama, if the person knows or recklessly disregards the fact that the alien has come to, has entered, or remains in the United States in violation of federal law.  Although not directly implicating the employment of unauthorized aliens, it is foreseeable that state or federal authorities could use the threat of this provision (or similar federal statutes) to bully or strong arm employers during on-site inspections of the workplace.  Employers should therefore be aware of the provision.

Tennessee

The new Tennessee statute is called the Tennessee Lawful Employment Act.  The statute seeks to ensure that both employees and non-employees are authorized to work in the United States.  A non-employee is defined as any individual, other than an employee, paid directly by the employer in exchange for the individual’s labor or services.

In the case of a non-employee, before the non-employee provides labor or services, the employer must request and maintain a copy of one of the following documents: 

  1. A valid Tennessee driver’s license or photo identification license issued by the Tennessee Department of Safety;
  2. A valid driver license or photo identification license issued by another state whose issuance requirements are at least as strict as those in Tennessee.  Tennessee is supposed to develop a list of states whose licenses/photo identification are acceptable;
  3. An official U.S. birth certificate;
  4. A U.S. issued birth certificate;
  5. A valid, unexpired U.S. passport;
  6. A U.S. Certificate of Birth Abroad;
  7. A Certificate of Citizenship
  8. A Report of Birth Abroad of a Citizen of the U.S.;
  9. A Certificate of Naturalization;
  10. A U.S. citizen identification card; or
  11. Valid alien registration documentation or other proof of current immigration registration recognized by the U.S. Department of Homeland Security that contains the individual’s complete legal name and current alien admission number or alien file number.  (Although not clear, it would seem that a permanent resident card, Employment Authorization Document, or I-94 card authorizing the alien for employment with the specific employer would fall within this description.

In the case of employees, the employer must request and retain one of the above documents prior to the employee providing labor or services to the employer.  In the alternative, the employer can enroll in E-Verify, verify the work authorization of the hired employee using E-Verify, and maintain a record of the results from E-Verify for the employee. 

The employer must maintain the required documentation for a period of time consistent with the Form I-9’s requirements – three years after the date of hire (or three years after the non-employee provides labor or services) or one year after termination, whichever is later.

The statute is phased-in based on the size of the employer. For employers of 500 or more employees, the statute is effective January 1, 2012.  Private employers with 200 to 499 employees must comply by July 1, 2012.  For employers of six to 199 employees, the law takes effect on January 1, 2013.

E-Verify In Other States

Numerous other states have mandated the use of E-Verify, although in many, E-Verify is limited to state agencies or entities contracting with the state.  Among those states that have mandated use of E-Verify in some form:  Arizona, Colorado, Florida, Georgia, Idaho, Indiana, Louisiana, Minnesota, Mississippi, Missouri, Nebraska, North Carolina, Oklahoma, Rhode Island, South Carolina, Utah, and Virginia.