HB 246: E-Verify in Construction

Ohio House Bill No. 246 aims to mandate the use of the federal E-verify program by nonresidential construction contractors, subcontractors, and labor brokers operating in Ohio. The bill establishes clear definitions for key terms, outlines the requirements for E-verify use and record-keeping, and details a system of enforcement, including investigations by the Attorney General, escalating fines, and potential suspension from state contracts for violations. The most severe penalty for knowingly employing an unauthorized alien is the permanent revocation of relevant business licenses. The bill also mandates compliance provisions in state and local government construction contracts and imposes fines on entities that fail to include these provisions.

Main Themes and Most Important Ideas/Facts:

1. Mandatory E-verify Use: The central theme is the requirement for specific entities within the nonresidential construction industry to utilize the E-verify program to confirm the employment eligibility of their employees.

• Key Requirement: “Except as provided in division (C) of this section, no nonresidential construction contractor, subcontractor, or labor broker shall fail to verify the employment eligibility of each employee hired to perform work on a nonresidential construction project through the e-verify program.” (Sec. 4151.02(A))
• This applies to employees performing work on “nonresidential construction project[s],” which are broadly defined to include various buildings, highways, bridges, and infrastructure, excluding residential, agricultural, and mobile home projects. (Sec. 4151.01(F))

1. Prohibition on Continued Employment of Unauthorized Aliens: The bill explicitly prohibits employers from continuing to employ individuals after receiving a “notice of final nonconfirmation” from the E-verify program.

• Key Prohibition: “No nonresidential construction contractor, subcontractor, or labor broker shall continue to employ an individual after receiving a notice of final nonconfirmation for that individual from the e-verify program.” (Sec. 4151.03)

1. Enforcement and Complaint Process: The bill establishes a complaint-driven enforcement mechanism overseen by the Ohio Attorney General.

• Complaint Form: The Attorney General is required to prescribe a complaint form, which cannot require the complainant’s social security number or notarization. (Sec. 4515.04(A)(1))
• Investigation: The Attorney General “shall investigate any violation alleged in a prescribed complaint form when the attorney general determines the complaint contains sufficient facts to reasonably conclude that a violation may have occurred.” (Sec. 4515.04(A)(1))
• Exception to Investigation: Investigations are prohibited if the complaint is based “solely on race, color, or national origin.” (Sec. 4515.04(B))
• Local law enforcement officers are permitted to assist in investigations. (Sec. 4515.04(C))
• Investigations resulting from “isolated technical error or a malfunction in the e-verify program” are not subject to orders or civil actions. (Sec. 4515.04(G))

1. Penalties for Non-Compliance: The bill outlines a tiered system of fines and potential suspension from state contracts for violations of the E-verify requirements.

• Initial Violations (Sec. 4151.02 – Failure to Verify): A fine of $250 per violation. (Sec. 4515.04(E)(1))
• Initial Violations (Sec. 4151.03 – Continued Employment): A fine of $5,000 per violation. (Sec. 4515.04(E)(1))
• Repeat Violations (within 3 years): Fines escalate significantly for repeat offenders. For example, a second violation of failing to verify employment eligibility within three years results in a $1,000 fine per violation (Sec. 4515.04(E)(2)), and a third violation results in a $1,500 fine per violation (Sec. 4515.04(E)(3)). Repeat violations of continuing to employ an unauthorized alien also escalate, reaching $25,000 per violation for a third offense within three years. (Sec. 4515.04(E)(3))
• Civil Actions for Non-Compliance with Attorney General Order: If an entity fails to comply with an Attorney General order within 30 days, the Attorney General “shall bring a civil action.” (Sec. 4151.04(F), Sec. 4151.05(A))
• Court-Imposed Penalties in Civil Actions: If a court finds a violation in a civil action, it will impose the Attorney General’s fine (if valid) plus an additional $1,000 per violation. (Sec. 4151.05(B)(1)(a))
• Suspension from State Contracts: Entities found in violation by a court are rendered “not eligible to bid for or participate in any state contract for a period of two years.” (Sec. 4151.05(B)(1)(b))

1. Permanent License Revocation for Knowingly Employing Unauthorized Aliens: The most severe penalty is the permanent revocation of relevant business licenses if a court determines that an entity has “knowingly employed an unauthorized alien.”

• Key Penalty: “If a court… determines that a nonresidential construction contractor, subcontractor, or labor broker has knowingly employed an unauthorized alien, the court shall order each appropriate agency to permanently revoke any license issued by the agency and held by the nonresidential construction contractor, subcontractor, or labor broker specific to the business location where the unauthorized alien performed work.” (Sec. 4151.06(A))
• If a specific location license is not held, but a general business license is necessary, all licenses from that agency at the primary place of business will be revoked. (Sec. 4151.06(A))
• The determination of unauthorized alien status for this penalty is based solely on federal government determinations. (Sec. 4151.06(B))

1. Requirement for State and Local Contracts: The bill mandates that state agencies and political subdivisions include provisions in their nonresidential construction contracts requiring compliance with the E-verify requirements.

• Mandate: The Attorney General “shall conduct periodic reviews of state agencies and political subdivisions to ensure that state agencies and political subdivisions are including within their contracts for the construction or renovation of nonresidential construction projects provisions requiring compliance with sections 4151.02 and 4151.03 of the Revised Code.” (Sec. 4151.07(A))
• Penalty for Non-Compliance: Failure to include these provisions results in a $5,000 fine for each instance. (Sec. 4151.07(B))

1. Definitions of Key Terms: The bill provides specific definitions for terms like “Alien,” “Employee,” “E-verify,” “Labor broker,” “Nonresidential construction contractor,” “Nonresidential construction project,” “Subcontractor,” and “Unauthorized alien.” These definitions are crucial for understanding the scope and applicability of the bill. (Sec. 4151.01)

Potential Implications/Considerations:

• This bill would impose new compliance burdens on nonresidential construction businesses in Ohio.
• The escalating fines and potential loss of state contracts could significantly impact businesses found to be in violation.
• The permanent license revocation provision for knowingly employing unauthorized aliens is a particularly stringent penalty.
• The bill’s impact on the availability of labor in the nonresidential construction sector could be a point of discussion.
• The role of the Attorney General in enforcement is clearly defined, suggesting a proactive approach to compliance.
• The E-verify enforcement fund created by the bill will be used to administer and enforce the provisions, indicating a dedicated resource for this effort.

Conclusion:

Ohio House Bill No. 246 represents a significant legislative effort to regulate the employment of authorized workers within the nonresidential construction industry in Ohio through the mandatory use of E-verify. The bill establishes a clear framework for compliance, enforcement, and penalties, with a strong emphasis on deterring the employment of unauthorized aliens. The escalating nature of the penalties and the potential for permanent license revocation highlight the serious intent behind this proposed legislation.