1. IMMIGRATION & E-VERIFY: THE 10,000-POUND GORILLA ON YOUR JOB SITE

2. IMMIGRATION LAW AND POLICY: DINNER CONVERSATION TOPIC?

3. WATER COOLER TOPIC?

4. FOR THE CONSTRUCTION INDUSTRY Increasing workforce investigations Stricter enforcement of immigration laws E-Verify: required in an increasing number of situations Employee misclassification audits The bottom line: Every employer needs to be proactive about complying with immigration laws and policies. This is of particular concern to employers in the construction industry.

5. CONTROLLING LAWS & POLICIES Immigration Reform and Control Act of 1986 (“IRCA”) – federal legislation E-Verify - a federal database that many companies are required to use Deferred Action for Childhood Arrivals (“DACA”) – announced November 2014 Deferred Action for Parents of Americans and Lawful Permanent Residents (“DAPA”) – announced November 2014

6. FEDERAL LEGISLATION Immigration Reform and Control Act of 1986 (“IRCA”)  Unlawful to hire “unauthorized aliens”  “unauthorized aliens:”  individuals who are not “lawfully admitted for permanent residence” or  not otherwise authorized by the attorney general to be employed in the U.S. [8 U.S.C § 1324a(h) (2012)].

7. FEDERAL LEGISLATION Immigration Reform and Control Act of 1986 (“IRCA”)  Requires all employees and employers to complete I-9 Forms  Employer must retain the original forms during the employment of each active employee (and for three years after employees become inactive or are terminated).  The goal: require every employer, regardless of the number of individuals it employs, to verify all employees hired after Nov. 6, 1986, are authorized to work in the U.S.

8. FEDERAL LEGISLATION Who enforces IRCA? ICE.

9. FEDERAL LEGISLATION U.S. Immigration and Customs Enforcement (“ICE”)  Federal law enforcement agency under DHS  Enforces U.S. immigration laws, including IRCA  IRCA authorizes ICE to inspect 1-9 Forms upon service of a Notice of Inspection  Can then inspect forms for compliance  10 business days to correct 8 U.S.C. § 1324a(b)(6)(B)

10. FEDERAL LEGISLATION Consequences of IRCA violation:  Monetary penalties for knowingly hire and continuing to employ violations range from $375 to $16,000 per violation  Repeat offenders receive penalties at the higher end

11. FEDERAL LEGISLATION Consequences of IRCA violation:  Penalties for substantive violations, which includes failing to produce a Form I-9, range from $110 to $1,100 per violation (i.e., per employee)  In determining penalty amounts, ICE considers five factors: the size of the business, good faith effort to comply, seriousness of violation, whether the violation involved unauthorized workers, and history of previous violations. 8 U.S.C. § 1324a(b)(6)(B)

12. FORM I-9: THE GOOD NEWS … Most I-9 errors are innocent mistakes – and often, the employers making them don’t have undocumented workers. Here are some common ones that can cost employers money: 1.No Employee Signature on Section 1 2.Status missing on Section 1 3.Incorrect, or missing, document description on Section 2 4.No Signature on Section 2 5.Improperly defining “active employees” 6.Improper storage of I-9 Forms

15. FORM I-9: TIPS FOR SUCCESS Properly train HR employees to check, and process, I-9 Forms –Ensure employer and employee have signed –Status of employee designated –Adequate description of the documenting authorizing work in the US –No discrimination based on immigration status or national origin Have a company policy defining “active” and “inactive” employees Keep I-9 Forms and proof of E-Verify compliance separate

16. VOLUNTARY INTERNET-BASED SYSTEM E-VERIFY Not a statute but an Internet-based system (USCIS.gov/e-verify) that allows businesses to determine the eligibility of their employees to work in the U.S. In many cases, E-Verify will more accurately determine an employee’s eligibility to work than the I-9 Form system under IRCA. Available to all U.S. employers free of charge by the U.S. Department of Homeland Security (DHS) but it generally is not mandatory for employers REQUIRED FOR MOST NC & SC EMPLOYERS

17. VOLUNTARY INTERNET-BASED SYSTEM E-VERIFY Required for: -Contractors on federal projects or doing business with federal government -Employers in a growing number of states -Applies to employees, NOT independent contractors REQUIRED FOR MOST NC & SC EMPLOYERS

18. VOLUNTARY INTERNET-BASED SYSTEM E-VERIFY Alabama, Arizona, Colorado, Georgia, Idaho, Indiana, Florida, Louisiana, Minnesota, Mississippi, Missouri, Nebraska, North Carolina, Oklahoma, Pennsylvania, South Carolina, Tennessee, Utah and Virginia REQUIRED FOR MOST NC & SC EMPLOYERS

19. VOLUNTARY INTERNET-BASED SYSTEM E-Verify in NC  Required for all employers within 25 or more employees working in NC  Can apply to out-of-state companies  As of October 2015, all contractors and subcontractors on state construction projects must use E- Verify N.C.G.S. § 143-133.3 REQUIRED FOR MOST NC & SC EMPLOYERS

20. VOLUNTARY INTERNET-BASED SYSTEM E-Verify in NC  New statute, signed by Gov. McCrory in 2015, requires E-Verify for state contractors without regard to number of employees  Some exceptions:  Goods, materials, & equipment  Travel, transportation, & lodging REQUIRED FOR MOST NC & SC EMPLOYERS

21. VOLUNTARY INTERNET-BASED SYSTEM E-Verify in NC: How to Comply  If working on state projects, prepare to begin E-Verifying  Include “flow-down” language in contracts regarding the use of E- Verify REQUIRED FOR MOST NC & SC EMPLOYERS

22. VOLUNTARY INTERNET-BASED SYSTEM E-Verify in NC: Penalties  First Offense:  Must file sworn affidavit of request of work authorization through E-Verify  Failure to do so in 3 days: $10,000.00 penalty  Second Offense:  $1,000.00, plus affidavit requirement  $2,000.00 per additional employee not verified REQUIRED FOR MOST NC & SC EMPLOYERS

23. VOLUNTARY INTERNET-BASED SYSTEM E-Verify in SC  Required for all private employers with any employees in SC  Can apply to out-of-state companies  Knowing hire of unauthorized alien is a violation of the employer’s license S.C. Code Ann. §§ 41-8-20 – 30 REQUIRED FOR MOST NC & SC EMPLOYERS

24. VOLUNTARY INTERNET-BASED SYSTEM Non-compliance penalties:  Probationary period  Loss of business or contracting license  Monetary fees and penalties S.C. Code Ann. §§ 41-8-40 REQUIRED FOR MOST NC & SC EMPLOYERS

25. IMMIGRATION LAW & EMPLOYEE MISCLASSIFICATION: PENDING DISASTER?

26. EMPLOYEE MISCLASSIFICATION Occurs when a business wrongly classifies an employee as an independent contractor, or vice versa Violation of the federal Fair Labor Standards Act Number One “Trending Topic” on DOL.gov Also in NC news in recent years: –Investigation of Housing and Urban Development (HUD) and other government projects completed from 2009 to 2013. –Payroll records of 64 HUD projects with budgets over $1 revealed NC employers were misclassifying employees 35.2% of the time –Result: $467 million per year of lost tax revenue from employers and workers failing to pay employment-related taxes. http://media.mcclatchydc.com/static/features/Contract-to-cheat/?brand=mcdhttp://media.mcclatchydc.com/static/features/Contract-to-cheat/?brand=mcd. Series by: Mandy Locke, David Raynor, Rick Rothacker, and Franco Ordoñez of The News and Observer, The Charlotte Observer, and McClatchy DC.

27. REFORM IN NC? NC General Assembly: House Bill 482 would expressly define the factors that would determine whether a worker is an employee or independent contractor. A few of the factors being considered by the NC Legislature include: “Whether the individual is engaged in an independent business, calling, or occupation;” Whether the individual is paid a fixed price, a lump sum, or upon a quantitative basis for the work performed; “Whether the individual is not subject to discharge because he or she adopts one method of doing the work rather than another;” Whether the individual is free to hire assistants as he or she may think necessary and “whether the individual has full control over such assistants;” and “Whether the individual selects his or her own time.” http://www.ncleg.net/gascripts/BillLookUp/BillLookUp.pl?Session=2015&BillID=H482

28. U.S. DEPARTMENT OF LABOR U.S. Dept. of Labor: A Stricter Test “Economic reality” test in a nutshell:  Is the worker really in business for him or herself….  Or, in reality, is the worker economically dependent on the employer?  If so: EMPLOYEE, NOT independent contractor.

29. THE FUTURE LAW? “Strategic Enforcement” efforts by DOL’s Wage & Hour Division will proliferate I.E.: the government is CRACKING DOWN on employee misclassification NC will likely follow suit and may pass legislation The result? –Fewer “independent contractors” –Employers will be unable to circumvent immigration laws via misclassification –A shift in construction labor force will occur –Individuals unauthorized to work in the US will be forced elsewhere