In North Carolina, having 25 employees flips on a legal obligation that many business owners do not see coming: verifying the status of their employees through the E-Verify system. Whether you’re wondering if your business already faces this obligation or you’re getting close to the threshold, it’s important to be prepared. Fortunately, once you have a system in place, compliance is relatively straightforward.
What is E-Verify? Understand North Carolina’s requirements
E-Verify is a free federal web system run by USCIS/DHS that confirms a new hire’s work authorization against government records. It works alongside Form I-9, rather than replacing it, which means that employers with 25 or more employees must comply with those regulations. The requirement was written into law in June of 2011, as part of HB 36: N.C.G.S. § 64-25 et seq.
E-Verify has been fully phased in for all covered employers since July 1, 2013. The program had a staggered rollout: employers with 500+ employees have had to use the system since October 2012, and 100+ since July 2013.
Does your business count? The 25-employee threshold explained
In order to determine whether your business has to use the E-Verify system, check the number of employees you have working in North Carolina. If you have 25 or more employees in the state, you are covered under that requirement. Note, however, that an “employee” does not include someone whose term of employment is less than nine months over a calendar year, which means that short-term or seasonal workers do not qualify. Suppose, for example, that you hire over 100 employees to manage pop-up holiday shops across North Carolina from late October through December. Because they are seasonal employees, they would not trigger the E-Verify requirement.
Many business owners struggle to determine whether their business falls under those requirements. Count carefully, and revisit those counts as your business grows to ensure that you remain in compliance.
Am I Covered?
- Does my North Carolina business have to use E-Verify? — In North Carolina, any employer that transacts business in the state and employs 25 or more employees must use E-Verify for new hires, not counting workers whose term of employment is less than nine months in a calendar year.
- What is the E-Verify 3-business-day rule in North Carolina? — A North Carolina employer is presumed compliant if it verifies a new hire’s work authorization through E-Verify within three business days of the employee's date of hire, after completing the Form I-9.
Step 1 — Register your business with E-Verify
If you’ve recently crossed the 25-employee threshold, it”s time to make sure your business is in compliance and that you’re verifying employee eligibility within three days of their hire date. Start by enrolling your business at e-verify.gov. You’ll need to:
- Designate a program administrator. This individual is generally either the owner or a member of the HR team and will be accepting responsibility for managing the E-Verify requirements and ensuring that the business remains in compliance.
- Provide key company information. This will include your EIN, NAICS, and the hiring sites you use to bring people into your company.
- Review and sign the Memorandum of Understanding, acknowledging that you understand the system and its requirements.
Enrollment is free and done directly within the federal system. Leave time to review submitted documents and the MOU.
Step 2 — Complete the Form I-9 first
Order of operations matters when it comes to keeping up with E-Verify requirements. The I-9 form comes before E-Verify. As you go through the hiring process, complete Section 1 (employee) and Section 2 (employer review of documents) of the I-9 before entering information into E-Verify. E-Verify draws from I-9 data, so make sure that everything on those forms is accurate to the best of your knowledge to prevent mismatches downstream that could lead to delays or compliance challenges.
Step 3 — Run E-Verify within the 3-business-day window
To maintain compliance, your business must meet essential deadlines. A North Carolina employer is presumed compliant if it verifies work authorization through E-Verify within three business days after the employee’s date of hire. Key points:
- The “date of hire” is considered the employee’s first day of work for pay--the day they actually start working with your company.
- Business days are Monday through Friday, generally excepting federal holidays.
Once the I-9 is complete, prioritize completing E-Verify to ensure that the business remains compliant. Once you send in the information, you will get back one of two responses: an Employment Authorized response, verifying the employee’s eligibility to work in the United States and in North Carolina, or a Tentative Nonconfirmation, which may mean that the employee is not eligible for employment.
What to do if you get a Tentative Nonconfirmation (TNC)
Receiving a tentative nonconfirmation can feel daunting. However, don’t panic! A TNC is not the final answer on employment. Start by giving the employee the notice and letting them decide if they want to contest it. If they do choose to contest, the employee can continue working while they resolve the issue.
As an employer, you can point the employee to the E-Verify requirements and the USCIS process for contesting the TNC. Keep documentation throughout the process, including all communications you have with the employee and the employee’s paperwork as they contest the issue. Pay particular attention to timelines and deadlines to ensure that the process goes smoothly.
Recordkeeping and staying compliant over time
Staying in compliance – and proving that compliance – means not only following the requirements, but keeping up with documentation over time. Start by developing a process for your new hires, including a repeatable new-hire checklist that ensures that the 3-day window is never missed. Retain I-9s and E-Verify case records according to federal retention rules, including maintaining those documents for the employee’s entire tenure with the company. If an employee leaves the company, you’ll still need to keep up with documents for a predetermined period of time: three years after the employee’s date of hire or one year after their employment was terminated, whichever is longer.
Once you have systems in place, don’t just assume that you’re in compliance. Re-check employee counts periodically to ensure that you have a current record, since your obligations may change as you grow.
Approaching 25 employees? What to do before you cross the line
If you know you’re getting close to 25 employees, especially if you’re on the verge of increasing your employee count, it’s time to get ready. Don’t wait until you’ve already hired that 25th employee to start your new processes; instead, make sure you’re prepared from day one. Keep in mind that if you wait too long, you can end up with financial penalties and fines – not to mention the administrative scramble of retroactively getting compliant.
Create effective projections
Start by effectively projecting hiring timelines. Pay attention to the 9-month requirement – that is, that employees must work for the company for at least 9 months out of the year, rather than filling seasonal roles with the company – when considering future anticipated headcount. Clear projections will give you a better idea of when your business is likely to cross that 25-employee threshold.
Set up E-Verify early
Don’t wait until you’re searching for your 25th employee to set up E-Verify. Instead, set up E-Verify enrollment before that new hire pushes you over the limit. Enrollment and MOU signing take time, and you don’t want to be caught outside the three-day window.
Create clear hiring processes and checklists
If you’re nearing the 25-employee threshold, it’s time to adapt your hiring and onboarding to reflect the E-Verify requirement. By setting up those processes early, you’ll ensure that you’re ready to go when you do hire that 25th employee.
Penalties and enforcement in NC
The North Carolina Department of Labor enforces E-Verify use via a compliant-driven process. Noncompliance can result in significant penalties, including fines between $100 and $10,000 per day, per violation. The fines may depend on the size of the employer and how many violations they have committed as well as the overall size of that violation. In addition, repeated non-compliance may mean that the DOL revokes the employer’s business license. Check with the NC DOL for current information about those potential penalties.
Stay in compliance with E-Verify requirements
With a simple system, the E-Verify requirements are a routine part of operating a business in North Carolina, not an extensive burden. First, confirm that you’re covered. Then, enroll your business in E-Verify. From there, you just need to make sure that you complete the I-9 and run E-Verify within three business days of hiring a new employee.
However, keeping up with those requirements can be challenging for some business owners, especially if you’ve recently crossed that 25-employee threshold or you’re struggling to keep up with all compliance requirements. Platinum Group can help you remove manual data entry to speed up verification and boost accuracy. We are a network partner of isolved People Cloud. With isolved E-Verify, auto-populated fields and built-in validation rules minimize human error, helping ensure accurate, compliant submissions from the very first step. And, you can verify new hires’ employment eligibility quickly and confidently with a secure, streamlined process. Your HR team can electronically confirm work authorization, accelerate onboarding, cut manual errors, and stay compliant with federal requirements. Reach out for a consultation to learn more about how we can help streamline compliance requirements, manage HR tasks, complete payroll, and more.
This content is intended as general information only, not legal advice. Verify current thresholds, deadlines, and penalties with NC DOL or counsel.