Indiana Law SEA 590 Requires Employers To Use E-Verify

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The State of IndianaIndiana Governor Mitch Daniels signed immigration legislation (SEA 590) into law on May 10, 2011, and the bill significantly affects both public and private employers. Effective, July 1, 2011, government agencies and vendors providing services to government agencies will be required by law to utilize E-Verify for the purposes of determining the employment eligibility status of all new employees. Please find below a summary of how the new bill will affect public agencies:

  • State agencies and local governments cannot award a grant of more than $1,000 to a business unless they sign and show documentation that the business is enrolled and participating in the E-Verify program.
  • The law authorizes state agencies or local governments to terminate a public contract without penalty if the contractor knowingly employs illegal immigrants. If subcontractors are employed under a public contract, the subcontractor must certify to the contractor that it uses E-Verify and does not knowingly employ illegal immigrants.
  • An agency or political subdivision must verify the eligibility of individuals older than 18 who apply for federal, state or local public benefits, such as health-care services, college scholarships, grants and financial aid.
  • The law requires the Indiana Department of Workforce Development (DWD) to verify citizenship before determining eligibility for unemployment benefits, and authorizes DWD to file civil action to recoup unemployment benefits from employers who knowingly employ illegal aliens. 

Please note that private employers are not subject to utilizing E-Verify to determine the employment eligibility status of all new hires effective July 1, 2011, although the following guidelines subject to the same requirement, although the law grants some legal protection to companies who voluntarily elect to do so:

  • The law authorizes state agencies or local governments to terminate a public contract without penalty if the contractor knowingly employs illegal immigrants. If subcontractors are employed under a public contract, the subcontractor must certify to the contractor that it uses E-Verify and does not knowingly employ illegal immigrants.
  • The law prohibits business owners in Indiana who knowingly hire illegal immigrants from deducting expenses associated with that employee in the calculation of their state income taxes, but a safe harbor is provided to employers who enroll and verify new employee data through the E-verify program.
  • The law establishes penalties for someone who knowingly or intentionally transports, conceals, harbors or shields from detection an illegal immigrant for commercial or private financial gain.
  • Under the law, the State may sue employers, who do not use E-Verify, to recover unemployment insurance benefits paid to a worker employed on or after July 1, 2011, who the employer knew was not authorized to work in the U.S. If the State prevails in this civil action, it also may recover reasonable attorneys' fees and costs. This law also includes adverse tax consequences for employers of illegal aliens, if the employers are not using E-Verify. 

Employment Background Investigations, Inc. is committed to providing employers with valuable education, news and resources around background screening, drug testing, occupational healthcare and employment eligibility.  All content provided by EBI is published for the convenience of its readers and should never be deemed as legal guidance or advice.  Always consult your legal counsel for specific advice on local laws and industry regulations.

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