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Legal Eagles: Relief on purchasing and contracting E-Verify requirement 

By Kim Hibbard, NCLM General Counsel 

Now that the 2014 session of the General Assembly has drawn to a close, we can reflect on one of the changes that will have a positive effect on day-to-day municipal operations. The efforts of the League’s membership and its lobbying team paid off in securing a change to last year’s E-Verify legislation that will make it much more practical to implement at the municipal level.

E-Verify is a web-based system operated by the U.S. Citizenship and Immigration Service and the Social Security Administration that allows employers to electronically verify the legal employment status of newly hired employees. North Carolina law requires the State and local governments, regardless of size, to use it for new hires as well as any private employers with 25 or more employees in the state.

Legislation enacted last year (Session Law 2013-418) prohibited municipalities and counties from entering into any contract unless the contractor and subcontractors complied with E-Verify. This created significant administrative burdens, as jurisdictions faced having to create elaborate new processes to scrutinize vendors and service providers for even the smallest and most routine of purchases and projects.

During the 2014 session, the League-sought relief arrived in the form of House Bill 369, which primarily dealt with criminal law changes. Tucked into Section 13 of the bill is a provision clarifying—and scaling back—the local government contracts to which E-Verify applies. Effective for contracts entered into on or after October 1, 2014, the E-Verify contracting prohibition will apply only to contracts that are subject to the formal bidding statute, G.S. 143-129. The formal bidding process currently applies to construction or repair contracts of $500,000 or more and purchasing contracts of $90,000 or more. The new legislation clarifies that there is no longer a need to check for E-Verify compliance on all contracts, regardless of size or type, as municipalities and counties are now placed on par with other local public entities, such as boards of education and authorities. This should result in a noticeable decrease in legal and administrative headaches associated with E-Verify in purchasing and contracting.

The General Assembly ratified HB 369 on August 15 and presented it to the Governor for signature. Governor McCrory signed it into law on Sept. 18 as Session Law 2014-119. Your municipality may wish to revisit the changes made to its purchasing and contracting processes to eliminate any superfluous E-Verify requirements for contracts other than those to which formal bidding applies.