Contractors: Remember to E-Verify All New Employees

E-VerifyApproximately one year ago the Pennsylvania State Legislature passed a law entitled Construction Industry Employee Verification Act.  Since that time, Pennsylvania construction contractors have likely received numerous emails, news blurbs and blogs announcing this statute and its requirements.  This is a reminder that the statute is now in effect as of October 7, 2020.  Generally speaking, the statute prohibits a contractor’s employment of any individual who is not verified through the E-Verify program administered by the United States Department of Homeland Security and the United States Social Security Administration.  For a first violation, the contractor is subject to investigation and remedial action by the Pennsylvania Department of Labor and Industry.  A second or subsequent violation will lead to the referral of the case by the Department of Labor and Industry to the Pennsylvania Attorney General for enforcement and prosecution.

Pennsylvania construction employers should know that the term “employee,” as it is defined in the statute goes beyond a traditional definition of employee.  In fact, under the statute, an “employee” can include a sole proprietor with whom the construction contractor contracts.  As such, a construction contractor should be mindful of the entity with which it is doing business, as to the form of the business, i.e. corporation, partnership, LLC or sole proprietorship.

Pennsylvania construction contractors should place provisions in their subcontracts requiring each subcontractor to comply with the Construction Industry Employee Verification Act and obtain from the subcontractor written verification that the subcontractor is aware of the provisions of the statute and is responsible for compliance with the statute.

The Department of Labor and Industry has created and has made available on its website a complaint form for an individual to allege contractor violations of the statute.  As such, construction contractors are on notice that a complaint which may lead to investigation, and worse, prosecution, may come from anyone who claims to have knowledge that the construction contractor is employing an unauthorized employee.

The Department of Labor and Industry website contains helpful answers to frequently asked questions.  However, should you have specific questions regarding the statute, you should not hesitate to call the attorneys of Reager & Adler, as we will be happy to discuss the statute as it applies to your company.

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