Pennsylvania House Bill 1170, known as the Construction Industry Employee Verification Act (the Act) was recently passed which will require all construction-industry employers, both public and private, to use E-Verify to determine the eligibility of their employees to work in the United States. The Act was passed in both the House and Senate with bipartisan support but was not signed by Governor Tom Wolf.¹ Construction companies with state contracts in Pennsylvania were already required to E-Verify new hires. The Act now makes the law statewide for the entire industry. The Act will take effect October 6, 2020.  

 

Under the Act, the “construction industry” is defined as anyone engaged in the erection, reconstruction, demolition, alteration, modification, custom fabrication, building, assembling, site preparation, and repair work or maintenance done on real property or premises under a contract, including work for a public body or work paid for from public funds. “Construction industry employer” is defined as “an individual, entity or organization in the construction industry, which transacts business in the Commonwealth and employs at least one employee in the Commonwealth.” The term construction industry employer includes a staffing agency that supplies workers to a construction industry employer. 

 

Complaints about a violation of this law may be made to the Pennsylvania Department of Labor & Industry (Labor & Industry). Labor & Industry will investigate and has authority to (1) enter and inspect the place of business or place of employment of any employers or employees, at any reasonable time, for the purpose of examining and inspecting records of the employer that relate to compliance with this Act; (2) copy any and all records as Labor & Industry may deem necessary or appropriate; (3) require from the employer a full and accurate statement, in writing, of the employer’s work verification process; and (4) interrogate persons to determine whether the employer is in compliance with the Act. Labor & Industry will verify the work authorization of the alleged unauthorized employee with the federal government. 

 

Once determined that the employee is not authorized to work in the United States, Labor & Industry will take all of the following steps. For a first violation, Labor & Industry shall issue a warning letter detailing the violation and informing the construction industry employer of the requirements under the Act.² Upon receipt of the warning letter, the employer has 10 days to notify Labor & Industry, in writing, that the employee was terminated. If the employer fails to provide such verification, the violation constitutes a second violation, which will be referred to the Attorney General. For second and subsequent violations, the Attorney General will bring an action against the employer in the county where the unauthorized worker is or was employed by the employer. The court, in determining whether an employee is an unauthorized worker, will consider only the federal government’s determination. The employer may provide proof that it verified the employment of the employee through E-Verify, which will create a rebuttable presumption that an employer did not knowingly employ an unauthorized employee. The employer also has an affirmative defense if the employer can demonstrate that it has complied in good faith with the immigration regulations. 

 

Upon a finding by the court that a violation under the Act has occurred, the court shall order (1) that the employee be terminated, and the employer must verify the termination to Labor & Industry within five business days. Failure to provide the proper notification will result in a suspension of the employer’s business license until the employer is in full compliance. Upon verification, each business license will be automatically reinstated; and (2) the employer will be subjected to a three-year probationary period for each business location where the unauthorized employee performed work. During this probationary period, the employer will be required to file quarterly reports with Labor & Industry of each new employee who is hired, and acknowledge that it has not knowingly employed an unauthorized employee. For a second violation, the court also has the power to order suspension of the employer’s business license(s) for a period not to exceed 30 days. For a third or subsequent violation during the three-year probationary period, the court shall order suspension for a term not less than one year up to the permanent revocation of the employer’s business license(s). In determining whether to order suspension, or the duration of the suspension, the court shall consider the following: the number of unauthorized workers; any prior misconduct by the employer; the degree of harm resulting from the violation; whether the employee made good faith efforts to comply with the Act; and the role of the directors, officers, or principals of the employer in the violation. 

 

Under the Immigration Reform and Control Act of 1986, all U.S. employers are required to verify the employment-eligibility of all new hires by completing the Form I-9 Employment Eligibility Verification Form. Pennsylvania employers in the construction industry are now also required to take a further step by matching the information provided by the employee on the Form I-9 and entering the data into the E-Verify system. More than 17,000 employers in Pennsylvania have enrolled in the E-Verify program to date. 

 

E-Verify is a government internet-based system, administered by the Department of Homeland Security (DHS) and the Social Security Administration (SSA), that allows enrolled employers to confirm the eligibility of their employees to work in the United States. E-Verify employers verify the identity and employment eligibility of newly hired employees by electronically matching information provided by employees on the Form I-9 against records available to DHS and SSA. Employers can go to the E-Verify website to enroll in the program. The E-Verify confirmation is done in conjunction with the I-9 completion. E-Verify is not a substitute for the I-9 verification. Once the employer and employee complete the Form I-9, the employer then, and only then, verifies the information provided by the employee through E-Verify. The employer will get either a rapid confirmation acknowledging that the employee is verified to work in the United States or will get a tentative non-confirmation, which will refer the employee to either the SSA or DHS to resolve an issue regarding the employment authorization. It is important that the employer not take any adverse action against an employee while they are attempting to resolve a tentative non-confirmation. Only after a final non-confirmation is issued may the employer terminate the employee. Employers are required by law to retain a record of the verification for the duration of the employee’s employment, or three years, whichever is longer. 

 

Advocates of the new law stress that it is about saving Pennsylvania jobs by penalizing unscrupulous contractors who hire and exploit illegal workers for profit and closes a loophole that allows unauthorized immigrants to secure jobs with the help of fake social security cards or other paperwork. Supporters of the bill say that employers who hire unauthorized workers often pay them lower wages off the books, giving companies an unfair advantage over contractors who follow the law, especially when companies are competing for work during the bidding process. 

 

Critics argue that the law will make employers less likely to hire immigrants, even if they are here legally, as well as the potential to lead to racial profiling. Frank Sirianni, the president of the Pennsylvania Building and Construction Trades Council, which represents more than 130,000 construction workers in the state, said that the bill “isn’t anti-immigrant. It’s pro-worker. It’s pro-business.” Governor Wolf explained that he has concerns about how this law may impact immigrants, people coming to America looking for opportunity, but acknowledges that “the law is a legitimate attempt to protect the rights of workers who want to make sure that their jobs aren’t being taken away by someone who might be working for an unscrupulous contractor who would be paying them less than they deserve to get paid.”