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E-Verify for Small Businesses: Is It Required?

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By Aditi Mukherji, JD on July 02, 2013 12:03 PM

E-Verify for small businesses may soon be mandatory, if the immigration bill that passed the Senate last week becomes law. But instead of requiring all employers to use E-Verify within 18 months, as had been proposed, the amended version of the bill pushes back that timeframe by a few years, Inc. reports.

Still, many states already require businesses, including many small mom-and-pop shops, to use the E-Verify system. For example, on July 1, North Carolina became the 22nd state to require E-Verify for small businesses. But not all small businesses are affected under the law, the Charlotte Observer reports.

Here's what small business owners need to know about E-Verify:

  • What is E-Verify? E-Verify is an online system run by the government and used by employers to verify that a worker is eligible to work in the United States. The system has a central federal database of valid Social Security numbers and the names of individuals associated with each. The system is also meant to improve accuracy of tax and wage reporting. But employers who use E-Verify are still required to complete and file an I-9 for each new employee.
  • Is your small business big enough to require E-Verify? North Carolina exempts businesses with fewer than 25 employees, while Georgia exempts businesses with 10 or fewer employees. Since states vary widely on the number of employees that trigger the E-Verify requirement, you'll want to check with an experienced local employment attorney to learn the rule where your business is located.
  • Are you in an E-Verify state? E-Verify is currently free to employers and is available in all 50 states. But state laws vary widely on its required use. In California and Illinois, for example, municipalities are prohibited from passing mandatory E-Verify ordinances. But 22 states require use of the E-Verify system, according to NumbersUSA.
  • Burdens on business owners? Employers must submit the following information based on the new hire's I-9 for E-Verify: An employee's name and birth date, Social Security number, citizenship status, I-94 number if applicable, type of document provided on I-9 to establish work authorization status, and proof of identity. The employer must initiate the verification within three business days of the employee's start date.
  • Concerns for business owners? Major concerns for small businesses include significant costs and high error rates. The error rate problems are expected to disproportionately affect businesses that rely on immigrant workers. In 2009, for example, naturalized citizens and other authorized foreign-born workers were 26 times more likely to get a system error from E-Verify than U.S.-born workers, reports The Washington Post. System errors could be a major headache for small businesses and lead to major job loss of eligible workers.

So small business owners who see the E-Verify system as a regulatory burden can breathe a sigh of relief -- but only a short one. The immigration bill, in its current form, would still require most employers to use the E-Verify system within four years.

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