Pennsylvania’s new Construction Industry Employee Verification Act (a.k.a. Act 75) is in effect as of October 7, 2020. The law essentially requires all construction businesses in Pennsylvania to use the U.S. Government’s E-Verify system when hiring new employees. This quick guide will help construction businesses in the state understand and comply with Pennsylvania’s new labor requirements.
What’s in the Pennsylvania E-Verify Law?
This was already a requirement under the PA Public Works Employment Verification Act regarding state projects over $25,000, but now applies to all “construction industry employers” in Pennsylvania.
The stated purpose of Act 75 is to ensure that employers don’t hire individuals who are unauthorized to work in the US. These new requirements are meant to curb the practice of hiring unauthorized workers who are often paid under the table, at significantly lower wages.
The hiring of unauthorized workers gives employers an unfair advantage over those with stricter hiring practices. Pennsylvania now joins a growing number of states, such as Florida and Arizona, who require the use of the E-Verify system.
What “construction industry employers” need to do
There are two main requirements in the law, both effective as of October 7, 2020.
- Construction industry employers (including staffing agencies) who hire a new employee must run the candidate’s information through the Federal E-Verify Website. This new requirement only applies to employees hired after the effective date.
- The records of such verification need to be kept on file for either (a) the duration of the individual’s employment, or (b) 3 years; whichever is longer.
How to comply with Pennsylvania’s E-Verify requirement
Enroll with E-Verify
Obviously, the first step is to enroll with the Federal E-Verify website to begin running potential new hires through the system.
Before you start the enrollment process, read the E-Verify Enrollment Checklist to ensure you have all of the required information at hand.
Document employee records
Construction employers should prepare to keep this documentation of all new hires. If a complaint or investigation is initiated against the employer, these records must be readily available.
Compliance with Pennsylvania’s E-Verify law is just another argument why every construction business needs a document retention strategy. In the event of a legal violation, payment problem, or other dispute, having documentation organized and handy is critical.
Add a subcontract clause
The PA Construction Industry Employee Verification Act provides some relief for contractors and subs concerned about liability for violation by their subcontractors. It comes down to the terms of the construction agreement between the contractor and their subs.
Contractors and subs in Pennsylvania should add a provision in all of their subcontracts requiring compliance with the Act. Furthermore, the language should state that the subcontract will be terminated upon any court-ordered sanctions against the subcontractor.
Lastly, to avoid liability, hiring parties should also obtain written verification that they are aware of the requirements under the Act and that they are responsible for compliance. Copies of these subcontracts and written verification of these requirements should be kept in your business records along with new-hire E-Verify records.
Continue to follow Pennsylvania’s existing requirements
An important thing to keep in mind is that the I-9 verification requirements, along with the other requirements under PA Public Works Employment Verification Act, are still intact. This new law simply requires an additional step in the hiring process.