Tennessee Lawful Employment Act Requires Verification Of Authorized Status Of Employees And Non-Employees Such As Independent Contractors

Tennessee Lawful Employment Act Requires Verification Of Authorized Status

Of Employees And Non-Employees Such As Independent Contractors

On June 7, 2011, Governor Bill Haslam signed into law the Tennessee Lawful Employment Act (Act), which will require Tennessee employers who employ six or more employees to verify the authorized status of all newly hired employees and non-employees. The Act defines “employee” as any individual for whom an employer must complete a Form I-9 pursuant to federal law and regulations, and does not include an independent contractor. The Act defines a “non-employee” as “any individual, other than an employee, paid directly by the employer in exchange for the individual’s labor or services.” “Non-employees” include independent contractors.

Under the new law, Tennessee employers must verify the status of all newly hired employees in one of two ways. Employers either may choose to enroll in, and verify the work authorization status of new hires through, the online federal E-Verify program, or they may require new hires to produce one of the following documents prior to the new hire providing labor or services for the employer:

(1) A valid Tennessee driver’s license or photo identification issued by the Tennessee Department of Safety;

(2) A valid driver’s license or photo identification issued by another state where the issuance requirements are at least as strict as those in Tennessee;

(3) An official birth certificate issued by a U.S. state, jurisdiction, or territory;

(4) A U.S. government-issued certified birth certificate;

(5) A valid, unexpired U.S. passport;

(6) A U.S. certificate of birth abroad;

(7) A report of birth abroad of a U.S. citizen;

(8) A certificate of citizenship;

(9) A certificate of naturalization;

(10) A U.S. citizen identification card; or

(11) Valid alien registration documentation or other proof of immigration registration recognized by the U.S. Department of Homeland Security with complete legal name and current alien admission number(s) or alien file number(s).

As to non-employees, employers are provided only one avenue for checking authorized status. Employers must verify the authorized status of non-employees by requesting and maintaining one of the employment authorization documents listed above prior to the non-employee providing labor or services for the employer.

The Act does provide an exception for an employer who does not have internet access. In such a case, the employer can contact the Tennessee Department of Labor and Workforce Development and conduct E-Verify checks through that department if the employer signs an attestation, under penalty of perjury, that the employer does not have internet access and completes any other forms necessary to facilitate the E-Verify process.

Under the Act, employers must maintain a record of the results generated by the E-Verify system for three years after the date of hire or one year after the date of termination, whichever is later. Likewise, employers must maintain any document obtained to verify the authorized work status of any new employee or non-employee for three years after the document is received or for one year after the employee or non-employee stops providing labor or services to the employer, whichever is later.

Penalties for violating the Act range from a warning (for first time violations deemed to have been committed unknowingly so long as the employer complies with the requested remedial action within sixty days of the initial order) to a fine of $2,500, plus $2,500 for each employee or non-employee who was not verified, for an employer’s third or subsequent violation. If found to be in violation of the law, employers will be required to provide evidence of compliance within sixty days of issuance of the final order of violation. Failure to do so will result in suspension of the employer’s business license until the violation is remedied.

The new law will take effect on January 1, 2012, for governmental entities and private employers with 500 or more employees; on July 1, 2012, for private employers with 200-499 employees; and on January 1, 2013, for private employers with 6-199 employees.

The new Tennessee law joins a growing list of state immigration laws designed to curtail the employment of unauthorized aliens. Given the proliferation of state laws such as the Tennessee Lawful Employment Act, employers bear an increasingly heavy burden to ensure knowledge of, and compliance with, the nuances of the state-specific immigration laws in all of the states in which they operate.