March 12, 2020 | Recruiting Software | Posted by Bob Greene, Senior HR Industry Analyst at Ascentis
E-Verify, the Pennsylvania Construction Industry Employer Verification Act, and a New Era of Employment Screening
The new Pennsylvania Construction Industry Employer Verification Act (PCIEVA) goes into effect in October 2020, and with it comes further evidence that we’ve entered a new era in employment screening. While work authorization is always a hot-button topic in the HCM industry, the current political and economic climate has put the issue in sharper focus than ever before. Verifying that their employees are legally allowed to work in the U.S. is a crucial consideration for employers who wish to avoid fines, penalties, and loss of business.
It’s no surprise, then, that PCIEVA has the attention of employers well beyond Pennsylvania. The new state law expressly prohibits businesses in the construction industry from knowingly employing anyone not authorized to work in the United States. That includes mandatory use of the federal government’s E-Verify system. Similar rules about unauthorized employees have been in effect for public contractors in Pennsylvania for several years, but this act expands the reach to all employers in the construction industry, including building, assembling, site preparation, repair work, reconstruction, demolition, alteration, modification, and custom fabrication.
What is E-Verify?E-Verify is an electronic work-authorization system that was first implemented back in 1997 as a kind of partner program for IRS Form I-9, the federal standard for employment verification. Administered by the U.S. Citizenship and Immigration Services and the Social Security Administration, E-Verify electronically matches an employee’s I-9 information against Social Security and Department of Homeland Security records. This is not, as some employers may assume, a replacement for or alternative to filing accurate I-9 forms. Rather, E-Verify is intended to strengthen compliance with the employment eligibility requirements laid out in the I-9.
Who needs to use E-Verify?Participation in E-Verify is currently optional for most private employers, but it is mandatory for any employer with a federal contract containing a Federal Acquisition Regulation E-Verify clause. Aside from federal contractors, E-Verify compliance rules also vary from state to state: nine states currently mandate it for all employers, while 11 other states require it for public employers. Further complicating the issue, some states, such as Pennsylvania, require E-Verify only for employers within specific industries. Meanwhile, California and Illinois both have laws that limit or outright prohibit mandatory E-Verify requirements.
Obviously, it behooves employers to get well acquainted with the E-Verify requirements for their respective states and industries. Penalties for non-compliance also vary by state and by municipality, but can businesses employing unauthorized workers can face monetary fines, suspension of contracts, loss of business licenses, and bans on doing work in a state or county. To enroll in E-Verify, employers in Pennsylvania and elsewhere can visit www.dhs.gov/E-Verify.
What else has changed?As mentioned earlier, expanded E-Verify requirements are just one of the areas where employers are dealing with changing standards for screening their workforces. In January the U.S. House of Representatives passed legislation forbidding employers to make employment decisions based on a candidate’s credit history, a move opposed by many chambers of commerce and employer organizations. In New Jersey, employers are now forbidden to ask about job applicants’ salary history, including wages and benefits. And Nevada and New York City now bar most employers from rejecting candidates due to marijuana use.
It is interesting to note that most of these new regulations trend toward loosening standards for disqualifying a job seeker, while the new E-Verify guidelines in Pennsylvania do the opposite. That just goes to show that there is no such thing as predictability in the ever-evolving field of human capital management. That makes it all the more crucial for HCM professionals to stay on top of the latest developments in employment regulations, and to maintain the flexibility to adapt as necessary.
Bob Greene currently serves as Senior HR Industry Analyst at Ascentis. Bob’s 40 years in the human capital management industry have been spent in practitioner, consultant and vendor/partner roles. As practitioner, he managed payroll for a 5,000-person bank in New Jersey. As consultant, he spent 8 years advising customers in HRMS, and payroll and benefits system design as well as acquisition strategies. Bob also built a strategic HCM advisory practice for Xcelicor (later acquired by Deloitte Consulting.)