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Law Change Affects How Small Businesses Verify New Hire Information

This article was originally published on Nooga.com.

Beginning Jan. 1, Tennessee employers with 50 or more employees will be required to use the federal E-Verify system to electronically verify information about new hires. 

"The federal government instituted the E-Verify program several years ago," said Rhonda Champion, certified public accountant and chief executive officer of Chattanooga's Paypro HCS. "The purpose of the program was to confirm that individuals that were being hired by companies were, in fact, eligible to work in the U.S." 

E-Verify is an online federal program designed to confirm an employee’s eligibility for employment by cross-referencing information from an employee's Form I-9 to data from U.S. Department of Safety and Homeland Security and Social Security Administration. 

Currently, the Tennessee Lawful Employment Act—more commonly known as the E-Verify Act—gives employers with six or more employees the option to use E-Verify or keep on file a copy of one of 11 identification documents such as a driver’s license, U.S. passport or permanent resident card.

The free system reportedly has a 97 percent accuracy rate and has more than 600,000 employers currently enrolled—a number expected to grow with Tennessee’s latest amendment, according to a news release from Paypro HCS, a payroll provider with a Chattanooga office. 

Employers can go through the E-Verify process for free online or get help through a private payroll company. 

"It's not really a difficult process," Champion said. 

She also said that employers with fewer than 50 employees are still required to use one of 11 identification documents, which can be found here

At the start of 2017, penalties for violators will range from the suspension of business licenses to being publicly listed as noncompliant on the state website to monetary fines that could be as much as $2,500.

Additionally, the newly amended legislation will be shortening the compliance period from 60 days to 45 days, according to a news release. 

For more on the E-Verify program, click here.