Georgia Expands E-Verify, Closes 1099 Contractor Loophole

On May 13, Georgia Gov. Nathan Deal (R) signed legislation expanding the state’s requirement for the use of the federal E-Verify system when hiring workers, closes a loophole for project worker identification and imposes severe penalties for violations.

Photo courtesy Office of Gov. Nathan Deal

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The new law builds upon previous state regulations that required public owners and public works contractors to use E-Verify, and expands the mandate to all businesses with more than 10 employees. The law goes into effect on Jan. 1, 2012, for employers with 500 or more full-time employees, and on July 1, 2012, for firms with between 100 and 499 workers. On July 1, 2013, employers with between 11 and 99 full-time workers will need to comply.

 “What we’ve done is create a level playing field for all employers,” said Gov. Deal in a press statement announcing his signing of the bill. “The use of E-Verify means everyone plays by the same rules – and it protects employers by giving them a federal stamp of approval on their workforce.”

Mark Woodall, director of governmental affairs for Georgia AGC, says the new law closes a “gaping loophole” that some independent contractors, classified as 1099 contractors, had been exploiting under the previous E-Verify regulations.

Because independent contractors, who have no employees, are not allowed to self-verify their immigration status, they could not participate in E-Verify, says Woodall. In several instances last year when illegal workers were found at construction sites, it most often involved these 1099 contractors, who could be hired without the E-Verify system.

The new law requires these workers to provide a driver’s license or identification card from a state that verifies immigration status.

The bill, HB 87, creates a new offense of “aggravated identity fraud” for anyone who uses false identification for purposes of obtaining employment. The offense carries maximum penalties of 15 years in prison and/or a fine of $250,000.

Leaders of AGC and ABC both expressed frustration at the federal inaction on immigration reform.

“We ought not be doing this at the state level,” said Woodall. “You don’t want a patchwork of 50 different requirements on this. Hopefully the pressure will start building from the state level back up to Washington for them to do something.”