The state of Florida recently enacted legislation that will have a significant impact on employers across the state. Senate Bill 1718 (SB1718), which Governor Ron DeSantis signed into law on May 10, 2023, requires private employers with 25 or more employees to use E-Verify for all new hires, effective July 1, 2023. E-Verify is an internet-based system operated by the U.S. Department of Homeland Security and the Social Security Administration that allows employers to electronically verify the employment eligibility of newly hired employees. The Florida Department of Revenue (FDR) recently provided some guidance clarifying which employers are covered by SB1718's requirements, although some questions remain.

New Law's Requirements

Private employers subject to SB1718 must verify compliance with the E-Verify requirement on their first unemployment compensation or reemployment assistance "return" or report each calendar year when making contributions to or reimbursing the state's unemployment compensation or reemployment assistance program.

There are several civil penalties for non-compliance with the E-Verify requirement. Beginning on July 1, 2024, if the Florida Department of Economic Opportunity (DEO) determines that an employer failed to use E-Verify three or more times in any 24-month period, it may fine the employer $1,000 per day, until corrective action is made (from the date that the DEO determines that the employer failed to use the E-Verify System), in addition to suspending all licenses, until the employer provides proof of compliance.

25-Employee Requirement

Many private employers are uncertain about the 25-employee threshold triggering the E-Verify requirement. It was unclear whether all 25+ employees had to be based in Florida, and whether out-of-state employers with at least 25 employees working remotely in Florida must comply with the new law.

The FDR recently acknowledged the confusion surrounding SB1718 by providing some clarification. Recent guidance, "New Employee Eligibility and E-Verify - Frequently Asked Questions," addresses some of this uncertainty. Question five and its answer states:

According to this Q and A, private employers with 25 employees or more will be subject to the E-Verify mandate if the employees are performing services in Florida at the time of the new employee's employment verification. Therefore, SB1718's E-Verify mandate will not apply to private employers with 25 or more employees who are not performing services in Florida.

This does not remove all uncertainty, however. Under federal law, to participate in E-Verify, employers must create an online account and designate at least one "verification location" and a "hiring site." The verification location is where the employer's staff takes the information from an employee's Form I-9 and creates a case in E-Verify. The hiring site is the location where the employer hires employees and completes the Form I-9. As an example, if a business is headquartered in New York with remote workers in Florida and the employer completed Form I-9 and E-Verify at the New York office, then the verification location and hiring site are in New York. Thus, under federal law, the Florida remote workers are subject to their employer's New York office E-Verify compliance requirements, of which there are none. Thus, under federal law, private employers with 25 or more employees working remotely in Florida, with their hiring site in another state, would not be subject to Florida's E-Verify requirements. But SB1718's language and the guidance’s use of the phrase "performing services in Florida" appears to put federal and state law requirements at odds.

How does an employer stay in compliance with SB1718 in light of federal E-Verify guidance as it relates to remote employees in Florida whose hiring site is outside the state of Florida? There is no perfect answer. Employers should therefore consult with their attorney as to what action to take.

Posted: July 18, 2023