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January 01, 2008

Hiring Alert for Tennessee Employers

Here is a Memorandum that I received from Greg Siskind re Tennessee immigration compliance law;

To: Clients with Tennessee Business Licenses

On January 1, 2008, Tennessee House Bill No. 729 (Public Chapter No. 529) will take effect. The bill creates a new version of Section 50-1-103 of the Tennessee Code Annotated. New Section 50-1-103 permits the Tennessee Commissioner of Labor and Workforce Development to order the suspension of a business license of any employer found to “knowingly employ, recruit or refer for a fee for employment, an illegal alien.”

1. How does Tennessee define “knowingly”?

The new law requires actual knowledge that a person is an illegal alien or, importantly, having a “duty imposed by law” to determine the immigration status of an illegal alien and failing to perform such duty.

So aside from the obvious problem example of simply hiring someone an employer knows is out of status, an employer arguably could be found to have knowingly employed an illegal alien if the employer did not follow immigration law in determining the immigration status of an employee. This could mean failing to complete an I-9 for an employee, failing to examine the identity and work authorization documents associated with the I-9 and failing to re-verify employment authorization on I-9s for employees with expiring work documents.

2. Who is an “illegal alien”?

While this may seem obvious, the definition in the bill is broad. All persons who are neither permanent residents nor authorized to work are “illegal aliens”. So someone legally in the US who is not a permanent resident would be considered an illegal alien under the law. This might include a non-immigrant like a student, a legally admitted refugee or a person with a pending adjustment application who is awaiting green card status and is legally allowed to remain in the US while he or she waits. The catch is that if such a person is not authorized to work, for purposes of the law, they are illegal aliens. This is because the law is designed to prevent employers from illegally hiring individuals barred from working in the US and not just those who are out of status.

3. How does the Commissioner of Labor and Workforce Development determine when to go after a company?

In order for an investigation to occur of an alleged violation of the new law, a complaint must be filed. The complaint may be lodged by a state or local government agency, an “officer” (a term not defined), an employee of the company (though this presumably would cover a former employee as well) or an “entity” (this term is also not defined though it could presumably mean competitor companies as well as anti-immigration organizations).

4. If the Commissioner determines there is evidence the new law has been violated, what is the process that occurs before a company’s business license is affected?

If the Commissioner determines that there is substantial evidence of a violation, then a hearing shall be conducted. After a hearing, if the Commissioner determines that that there is “clear and convincing evidence” that a person has violated the law, then an order shall be requested to revoke, suspend or deny an employer’s business license. The commissioner is required to sate whether there have been prior violations of this law.

5. If the business license is revoked, how can it be reinstated?

For a first violation, the commissioner can only order the revocation of the business license “until the person shows to the satisfaction of the commissioner that the person is no longer in violation of subsection (b). If the case is focused on the employment of a single individual and the individual is terminated, then the business license would presumably be reinstated. But there is no timetable in the statute providing for how long the Commissioner has to make this determination. Furthermore, if an investigation determined that there may be numerous employees working illegally at the company because a company has been lax with respect to its I-9s and other immigration recordkeeping, the Commissioner might choose to conduct an audit to determine that a company has no other employees illegally working for them.

6. What happens if a subsequent violation is found to have occurred?

If an employer is found to have committed a second or subsequent violation within three years of the first order, the business license shall be suspended for one year.

7. Is there an appeals process?

The statute does not provide for an appeals process.

8. Is an employer liable for work performed by independent contractors?

No, as long as labor law does not consider the work to be true employment where a W-2 must be filed for a worker.

9. Are there any safe harbors in the bill?

Yes. If an employer has received an I-9 form from an employee within 14 days of hire (federal law requires such a form be received by an employee on the day of hire anyway and the documentation proving work authorization within three days of hire) and the information provided by the person was later determined to be false, an employer will not be found to have violated the new law.

Employers are also protected if they have verified the status of a worker using the Department of Homeland Security’s e-Verify electronic work authorization program (formerly called the Basic Pilot program).

10. What steps can a company take to reduce the likelihood of being found to have violated TCA §50-1-103?

Companies should consider the following actions:

• Conduct regular I-9 training for employees responsible for the function

• Centralize I-9 record keeping

• Establish a non-discriminatory system to re-verify I-9s with expiring work authorization documents

• Switch to an electronic I-9 system rather than a paper-based one

• Purge I-9s which you are legally permitted to purge

• Have an outside firm conduct an internal I-9 audit to identify and remediate violations before a government audit occurs

• Develop a government audit response plan and train employees thoroughly in how to respond to s surprise audit

• Begin using the Department of Homeland Security’s e-Verify system

11. Are there other Tennessee laws covering employers and immigration?

The main additional law was passed in 2006 and is Public Act No. 878. It bars employers who knowingly utilize the services of illegal immigrants in the performance of a contract from access to contracts with Tennessee state agencies. Employers are also required to sign an attestation that they will not knowingly use the service of illegal immigrants in the performance of the contract. Firms found to have used illegal workers in the performance a state contract will be barred from contracting with the state for a one year period.

Posted by VisaLawyer at January 1, 2008 08:51 AM

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