Starting Monday, thousands of small businesses in North Carolina will be required to use an Internet-based system to verify that new hires are eligible to work in the U.S.
Under the state law, every business with more than 25 full-time employees will have to run new employees' information through a federal system known as E-Verify.
An employer enters an employee's name, Social Security number, address and date of birth into a system that matches it with other federal data.
"I thought if E-Verify were in place and employers were required to use E-Verify in their hiring practice, it would stymie some of the ease with which illegally present people could be hired," said N.C. Rep. Harry Warren, a Salisbury Republican who helped spearhead the legislation.
Employees whose information runs through without a discrepancy are cleared to work. Employees whose names are flagged have eight days to start an appeal.
After that, any business that continues to employ someone deemed ineligible will be warned, then fined by the N.C. Department of Labor.
The law comes at a time when the state's unemployment rate -- 8.8 percent in May -- is among the nation's highest and immigration overhaul measures are being considered by Congress.
The last phase also goes into effect on the same day that federal extended unemployment benefits end for more than 70,000 jobless North Carolinians.
Warren argues that the E-Verify legislation could help reduce the state's high unemployment by making it harder for undocumented workers to take jobs that North Carolinians could fill.
Some critics argue it's just more paperwork. Others fear it will dry up jobs in sectors, such as construction, that are critical to the economic recovery.
Others, such as John Goodman, director of governmental affairs at the N.C. Chamber of Commerce, said North Carolina's law is just anticipating legislation that's likely to come from the federal government anyway.
"We're trying to get ahead of that," Goodman said.
Two phases already underway
The state law, which has rolled out in three stages, was passed in June 2011 after three years of debate and modifications. Starting in October 2012, businesses in North Carolina with 500 or more employees had to use E-Verify for all new hires. In January, it was extended to businesses with 100 or more employees.
And starting Monday, the third and final phase also applies to the more than 20,000 small businesses with 25 to 99 employees.
"This is the big grab here," Warren said. "This will kick a lot more people into the system and this should help boost the effectiveness of it."
It's also boosting confusion, as this third and final group is the biggest yet -- and perhaps the least prepared, because many larger companies had already been using E-Verify when the North Carolina law took effect.
Kenny Colbert, president of The Employers Association human resources consulting firm in Charlotte, said he's been getting a stream of calls from small-business owners across all sectors.
"Most of our calls have been about, 'I have read (and) heard that I have to start doing it, but how does the process really work?' 'How do I sign up?' " Colbert said.
The process itself is quick and easy, said Roy Brown, chief financial officer of
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