Today, Governor Mark Sanford signed into law the South Carolina Illegal Immigration Reform Act (H. 4400). The new law prohibits employers in South Carolina from “knowingly and intentionally” employing unauthorized aliens and establishes steps that all employers will be required to take to verify the work status of new hires. Employers that violate the provisions of the law will face tough penalties in the form of monetary fines and possible suspension, even permanent revocation, of the ability to employ workers in South Carolina.
Under the Act, employers are required to verify the employment authorization of all newly hired employees by either: participating in E-Verify, the Internet-based system operated by the Department of Homeland Security and the Social Security Administration that electronically verifies employment eligibility; or by employing workers wh
- Possess a valid South Carolina’s driver’s license or identification card issued by the South Carolina Department of Motor Vehicles (DMV);
- Are eligible to obtain a South Carolina driver’s license or identification card in that they meet specific DMV requirements; or
- Possess a valid driver’s license or identification card from another state where license requirements are at least as strict as those in South Carolina.
The Act gives private employers five business days to verify a new hire’s work status. In contrast, federal law requires that employers verify work authorization and initiate the E-Verify query no later than the end of three business days.
By January 1, 2009, all public employers must register and participate in E-Verify. Further, a public employer may not enter into a services contract with a contractor unless the contractor agrees to verify its employees by complying with the provisions stipulated above. The contractor must also require agreement from its subcontractors and sub-subcontractors to comply with the Act.
Public contractors, subcontractors, and sub-subcontractors must comply with the new law according to the following effective dates:
- January 1, 2009: Contractors with 500 or more employees
- July 1, 2009: Contractors with 100-499 employees
- January 1, 2010: All other contractors
Private employers must comply with the Act according to the following effective dates:
- July 1, 2009: Private employers with at least 100 employees
- July 1, 2010: All private employers
As of July 1, 2009, private employers will be “imputed” a state employment license that permits a private employer to employ a person in South Carolina. This newly created, implied employment license will remain in effect as long as the employer complies with the provisions of the Act.
A private employer that – in good faith – verifies the immigration status of a new employee in compliance with the provisions of the Act will be presumed to have complied with the new law.
Employers that violate the Act may incur civil fines of between $100 and $1,000 for each employee whose work status is not verified. If an employer is found to knowingly employ illegal immigrants, the employer’s “imputed” employment license could be suspended for 10 to 30 days for a first offense, up to 60 days for a second offense, and can be revoked up for up to five years for third and subsequent offenses. An employer’s license could be revoked permanently in the most egregious cases.
In addition to the provisions covering employment verification, effective January 1, 2009, businesses may not claim wages paid to an individual of $600 or more per year as a deductible expense for state income tax purposes if the individual is an unauthorized alien. The Act also requires 7% state income tax withholding on Form 1099 compensation paid to individuals who cannot provide a valid taxpayer ID number or Social Security number. It also creates a civil action of wrongful termination against employers that replace a work-authorized employee with an employee who the employer knows or should have known is an unauthorized alien.
The Act makes it a felony to transport or harbor illegal aliens. These provisions do not apply to certain organizations that provide charitable assistance including churches and other religious organizations, soup kitchens, crisis counseling and intervention, and short-term shelters. It also establishes an information website and a 24-hour toll free call center to receive allegations and complaints of suspected violations of federal and state immigration laws.
The Act authorizes and directs the South Carolina Law Enforcement Division to negotiate an agreement with the Department of Homeland Security to assist in the enforcement of federal immigration laws by South Carolina state and local law enforcement personnel.
If you have questions or need assistance on compliance with the South Carolina Illegal Immigration Reform Act, contact the Ogletree Deakins attorney with whom you normally work, a member of the firm’s Immigration Practice Group, or Client Services at firstname.lastname@example.org or by phone at 866-287-2576.
Note: This article was published in the June 4, 2008 issue of the South Carolina eAuthority.