On December 3, 2014, Texas Governor Rick Perry issued Executive Order No. RP-80, which requires state agencies and state contractors to use E-Verify. The Order imposes, as a condition of all state contracts for service, a requirement that contractors use the E-Verify system to verify the work authorization of all persons, including subcontractors, assigned to do work pursuant to the contract. This also means that anyone seeking a contract with a state agency must also use E-Verify. Whether your company provides services to state agencies now, or could in the future, it is important to understand what E-Verify is and to assess the risks and benefits of signing on to this program. A list of all Texas state agencies is available here with a link to the agency's website.

E-Verify is the federal government's Internet-based employment authorization verification program. It is administered by the Department of Homeland Security (DHS) and the Social Security Administration (SSA). Employers verify their employees' authorization to work by entering information from the I-9 Form and submitting it to E-Verify, which runs the information entered against DHS, SSA, and Department of State (DOS) databases.

When there is an issue with an employee's authorization to work, employers will receive a combined Tentative Nonconfirmation Notice and a Referral Letter called a Further Action Notice. The notice provides the reasons for the Tentative Nonconfirmation, instructions to both the employer and the employee, and necessary steps to contest the Tentative Nonconfirmation. The Further Action Notice must be signed by both the employer and employee and retained with the I-9 Form. Once the Notice is reviewed with the employee, the employee must decide to contest or close the case. If it is contested, the employer should allow the employee to continue working without any change in working conditions. The employer also should refer the case in E-Verify and obtain the referral confirmation sheet. If the employee chooses not to contest the Tentative Nonconfirmation, E-Verify will issue an immediate Final Nonconfirmation and the employer may terminate the employee.

The E-Verify registration process requires employers to sign a Memorandum of Understanding (MOU) with the U.S. Citizenship and Immigration Service (USCIS), submit employer business information, and complete a mandatory tutorial. The MOU sets forth the terms and conditions of using E-Verify. Although existing users do not execute a new MOU each time it is revised by USCIS, employers are bound by any and all new requirements and have an affirmative duty to be aware of changes. This is just one of the risks associated with use of this program.

Employers who either choose to use E-Verify or would now be required to use it are also exposing themselves to increased government scrutiny in several ways. First, employers expressly allow SSA and DHS to perform periodic audits, including employee interviews. Additionally, DHS has the right to disclose some of its records to certain government agencies, federal, state, international or foreign law enforcement agencies, and even the media under certain circumstances.

USCIS maintains a Monitoring and Compliance (M&C) Branch that answers inquiries from the public but also monitors employers' use of the system to determine whether an employer's behavior should be investigated more closely. Accordingly, M&C submits referrals to the Department of Justice Office of Special Counsel for Immigration Related Unfair Employment Practices (OSC) and U.S. Immigration and Customs Enforcement (ICE) for behavior that is viewed as intentional misuse of the system.

The fact that OSC and ICE have somewhat conflicting objectives also places employers in a difficult position. ICE polices the employment of immigrants without authorization to work, which includes the authority to impose civil and criminal penalties and investigate employers who retain employees that have received a Final Nonconfirmation from E-Verify. On the other hand, OSC enforces the antidiscrimination provision of the Immigration and Nationality Act 8 U.S.C. §1324b which prohibits discrimination in hiring, firing, or recruitment based on national origin or citizenship status as well as discrimination during the employment eligibility verification process (I-9 and E-Verify) such as document abuse, retaliation, or intimidation. Therefore, among other things, OSC investigates whether employers: uniformly require all employees to submit an I-9 List B photo identification document; unlawfully decline to hire a person who does not have a Social Security number even where E-Verify requires this if the employee can produce other documents; and dismiss employees for a Tentative Nonconfirmation or Social Security no-match while the employee is contesting this determination.

Employers should, therefore, budget for training, entering cases, monitoring cases, additional I-9 processing requirements, poster requirements, and auditing and compliance.

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