Pennsylvania Public Works Contractors Must Verify Employees

If your company performs construction work for a public entity in Pennsylvania, your lawmakers have just given you another chore.  Pennsylvania Governor Tom Corbett recently signed into law Act 127 entitled The Public Works Employment Verification Act

This new law, which will take effect on January 1, 2013, requires that all public works contractors and subcontractors verify the eligibility and legal work status of each and every newly hired employee through the Federal E-Verify electronic verification system.  E-Verify, or the EVP, refers to the electronic verification program operated by the United States Department of Homeland Security. 

The law applies to all contractors and subcontractors performing work on public work projects as that term is defined in the Pennsylvania Prevailing Wage Act of 1961.  “Public Work” is defined in the Pennsylvania Prevailing Wage Act of 1961 as “construction, reconstruction, demolition, alteration and/or repair work other than maintenance work, done under contract and paid for in whole or in part out of the funds of a public body where the estimated cost of the total project is in excess of $25,000…”  The new law specifically sets forth that, as a precondition of being awarded a contract for public work, a contractor shall provide the public body with a specified verification form acknowledging its responsibilities under and its compliance with the law.  The law also requires all subcontractors to provide the public body with the verification form prior to commencing any work on a public works project.  Contracts between a contractor and subcontractor and contracts between subcontractors and their subcontractors are required under this new law to contain information about the requirements set forth in the Act.  The Pennsylvania Department of General Services has been designated as the government agency with the power and duty to enforce the Act.  When the verification form required by the Act has been developed by the Department of General Services, it will be posted on the internet.  As of this writing, there is no specific date set for the availability of the verification form. 

Contractors and subcontractors should know that this Act provides for significant sanctions for non-compliance.  Non-compliance can be found where there is a failure to verify the employment eligibility of a new employee through the E-Verify system; by the contractor or subcontractor’s failure to provide the verification form as required, or by making a false statement or misrepresentation on the verification form.  The Department of General Services will review and investigate complaints that a public works contractor or subcontractor has violated the Act, and will conduct complaint based and random audits of public works contractors and subcontractors. 

For the first violation, the contractor or subcontractor will receive a warning letter from the Department of General Services.  The letter will also be posted on the Department’s internet website.  For the second violation, a contractor or subcontractor will be debarred from public work for a period of 30 days.  For a third violation, a contractor or subcontractor will be debarred from public work for not less than 180 days and not more than 1 year.  In a case where the contractor or subcontractor has been deemed to have willfully violated the Act, the contractor or subcontractor is subject to a debarment of 3 years.  In addition, the contractor or subcontractor may also be subject to a civil penalty of not less than $250 and not more than $1,000 for each violation involving a failure to provide the verification form or in making false statements or misrepresentations in completing the form. 

For construction contractors and subcontractors who have not already enrolled in the E-Verify system, the E-Verify enrollment website is https:\\e-verify.uscis.gov\enroll.  It should be noted that the E-Verify system does not replace the already existing legal requirement to complete and retain the Form I-9.  Contractors and subcontractors must still complete and retain Form I-9.  Under the federal E-Verify system employers are required to verify a new hire within 3 business days after the employee starts work for pay. 

Contractors and subcontractors should prepare now so that they are ready to comply with the requirements of this new law come the new year. 

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