Legal Alerts

New State Law Resurrects Requirement to Verify New Employees' Work Authorization: Effective July 21


One of the changes to emerge from the Minnesota Legislature is a new law that requires employers who perform state contracts for services to verify new employees' work authorization for all state contracts that are valued at more than $50,000. The new law, Minn. Stat. 16C.075, requires verification of those newly hired employees who will perform work under the state contract. The new law resurrects a portion of an Executive Order in effect under former Gov. Tim Pawlenty, requiring certain state contractors to use E-Verify for newly hired workers. Gov. Mark Dayton allowed the Executive Order to expire in April 2011. 

Under the new law, a state-paid service vendor with contracts valued in excess of $50,000 and any subcontractors must certify that, as of the date services will be provided under the state contract, the vendor and all subcontractors have implemented or are in the process of implementing E-Verify for newly hired employees working on the state contract. This state law uses a federal electronic registration system known as E-Verify administered by the Department of Homeland Security and Social Security Administration. E-Verify is designed to inform employers whether the federal government's records are consistent with documents that the employee presented to establish work authorization. 

The new Minnesota law affects contracts for services in excess of $50,000, but does not appear to apply to contracts for supplies. In addition, the law requires the use of the federal E-Verify system only for newly hired employees who will perform work under the state contract. It does not require E-Verify for all newly hired employees, and does not require E-Verify for existing employees working under the state contract or otherwise. 

Please note, existing federal E-Verify requirements prohibit the use of the E-Verify system by an employer to verify the eligibility of its existing employees, with a limited exception for federal contractors subject to E-Verify requirements. The new Minnesota law does not change this federal prohibition. 

Unlike Government Pawlenty's Executive Order, the new law does not require state agencies to use E-Verify for new hires. It also does not provide a process for the vendors' certification of compliance, or provide for termination of the contract if the vendor does not comply. 

The new law became effective on July 21. 

Below is the language of the new law. Under the previous Executive Order, the state of Minnesota established guidance on Minnesota's E-Verify requirements, however, it is unclear whether such guidance will apply to the new law. We will monitor any new guidance that may accompany this new law and provide that as quickly as possible.

37.25 Sec. 29. [16C.075] E-VERIFY. 
37.26 A contract for services valued in excess of $50,000 must require certification from 
37.27 the vendor and any subcontractors that, as of the date services on behalf of the state of 
37.28 Minnesota will be performed, the vendor and all subcontractors have implemented or are 
37.29 in the process of implementing the federal E-Verify program for all newly hired employees 
37.30 in the United States who will perform work on behalf of the state of Minnesota. This 
37.31 section does not apply to contracts entered into by the State Board of Investment. 
37.32 EFFECTIVE DATE. This section is effective the day following final enactment, 
37.33 and applies to contracts entered into on or after that date.

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