If you are Modular Manufacturer or Builder, here is what you need to know…
E-Verify is a federal, internet-based system operated by the U.S. Department of Homeland Security (DHS) in partnership with the Social Security Administration (SSA). It allows employers to confirm the employment eligibility of newly hired workers by comparing information from the Form I-9 to federal records.
While E-Verify is voluntary at the federal level for most private employers, construction industry employers in certain states are required by law to use it—and compliance is increasingly becoming a condition of doing business on both public and private projects. Some states mandate E-Verify for all businesses, including Alabama, Arizona, Florida (for private employers with 25 or more employees), Georgia (for employers with more than 10 employees), Mississippi, North Carolina (for employers with 25 or more employees), South Carolina, Tennessee (for employers with 35 or more employees), and Utah (for private employers with 15 or more employees).
Other states have more limited E-Verify mandates, often applying only to public employers or building contractors. Examples include Colorado, Idaho, Indiana, Louisiana, Michigan, Minnesota, Missouri, Nebraska, Oklahoma, Pennsylvania, Texas, Virginia, and West Virginia. States that mandate construction industry employee verification through the E-Verify system, including Pennsylvania, Arizona, Georgia, Mississippi, South Carolina, Alabama, and Utah.
So does that include the modular housing industry as a construction business?
If you are a modular builder or set crew owner with employees, clearly it includes your company. But what about modular manufacturer in states where only construction companies are covered? Although I have never seen a legal decision on this issue in any state, I would say yes. Here’s why:
The Pennsylvania’s Construction Industry Employee Verification Act (“CIEVA”)—enacted as Act 75 of 2019—requires all construction industry employers in the Commonwealth to use the federal E-Verify system to confirm the work authorization of newly hired employees, effect since October 7, 2020, and compliance is mandatory. Act 75 defines the construction industry broadly, including businesses that engage in “custom fabrication, building, assembling, site preparation” and other related activities on real property under a contract.
Modular Construction as Building and Assembling: Modular construction inherently involves the “building” and “assembling” of components that are eventually placed on real property. This falls squarely within the definition provided by the Act.
Employer Obligations
- Complete the Form I-9 for each new employee no later than the first day of work.
- Submit the information through E-Verify within three (3) business days of the employee’s start date.
- Retain documentation of the verification process for your records.
- Respond promptly if E-Verify issues a “tentative non-confirmation” by providing the employee with instructions to resolve the matter with DHS or SSA.
- Importantly, the law prohibits using E-Verify to pre-screen applicants or to check the status of current employees (unless required under a federal contract).
Penalties for Noncompliance
Failure to comply with CIEVA can result in:
- · Warnings for first offenses
- · Civil penalties for subsequent violations
- · Potential loss of state contracts for repeated noncompliance
The Pennsylvania Department of Labor & Industry enforces this requirement and may investigate upon receiving a complaint or on its own initiative
Best Practices for Compliance
Register for E-Verify at www.e-verify.gov if you have not already done so.
Keep all I-9 and E-Verify documentation separate from personnel files for easy inspection.
Key Takeaway
E-Verify compliance is not optional for the Pennsylvania’s construction industry and I would argue for modular manufacturers as well. Using the system is a legal requirement for all new hires and a critical part of avoiding fines, delays, and reputational harm.
For questions about setting up E-Verify or developing compliant onboarding procedures, please contact my office.