Ohio E-Verify Rules Reshape Construction Compliance

The landscape of the Ohio construction industry has shifted significantly with the enactment of the E-Verify Workforce Integrity Act (House Bill 246). The law (Ohio Rev. Code Ann. §4151.01 et seq.) introduces mandatory employment verification for non-residential construction projects. Starting March 19, 2026, construction firms must align their internal processes and downstream contracts with these requirements to avoid severe financial and operational penalties. Our firm can help you audit your practices and update your agreements to insulate your business from the steep costs of noncompliance.

What the New Mandate Requires from Contractors

Strict Compliance and Record-Keeping

Covered employers must use the federal E-Verify system to confirm the legal working status of every employee hired for a covered project. Employers must complete a one-time enrollment at www.e-verify.gov. Employers can then create a new “case” for each potential employee, enter information from their I-9 and receive initial results in seconds. Once E-Verify displays a final eligibility result, employers can close the “case.” However, the act requires employers to maintain verification records for three years after the date of hire or one year after termination, whichever is longer.

A critical operational requirement involves “final non-confirmations.” If E-Verify cannot confirm an employee’s eligibility, the employer must immediately terminate that individual. Continued employment after a final non-confirmation violates the act and triggers heavy penalties.

Who Must Comply?

The mandate applies broadly to non-residential construction contractors, subcontractors and labor brokers. Under the law, a “nonresidential construction project” includes the construction or renovation of buildings, highways, bridges, utilities and related infrastructure. While the law excludes residential buildings and agricultural structures, it covers the majority of commercial and civil projects in Ohio.

Enforcement Powers and Potential Penalties

Enforcement and Risks

The Ohio attorney general investigates violations through both formal and anonymous complaints. If the attorney general issues your firm a “notice of violation,” you only have 10 days to request a hearing. Failure to do so renders the notice a final, enforceable order.

The consequences of an enforceable order or losing at a hearing can be severe:

• Failure to Verify: Fines start at $250, increasing to as much as $1,500 for subsequent violations within three years.
• Failure to Terminate: If you continue to employ an individual after a final non-confirmation, fines jump to $25,000 per violation for repeat offenses.
• Debarment: If the attorney general finds that you committed two (2) or more willful violations, you may be disqualified from bidding on or participating in any state contracts for up to two (2) years.

If your firm fails to comply with an order within 30 days, the attorney general may bring civil action against you. If a court determines you violated the law, it must assess additional, harsher penalties:

• Monetary Penalties: The court will validate the attorney general’s penalties and add an additional $1000 per violation.
• Debarment: The court must disqualify you from bidding on or participating in any state contracts for up to two years.
• License Revocation: Most severely, if a court finds a contractor knowingly hired an unauthorized immigrant laborer, the court must order the permanent revocation of the business license specific to that location or the firm’s primary place of business.

Building Contract Protections Before March Deadline

Insulating Your Business Through Smart Contracting
With these high stakes, owners and contractors must protect themselves from the potential failures of subcontractors or labor brokers to comply with this new requirement. State agencies are already inserting these mandates into their contracts — private firms should do the same.

Our team at Cohen Seglias can review, draft and integrate protective clauses into your construction contracts to help safeguard your business and ensure you remain eligible for future Ohio projects.

Broader Industry Impact

Legal analysts expect the mandate to reshape hiring practices across Ohio’s commercial construction sector. General contractors are likely to increase oversight of subcontractor labor, while smaller firms may need outside counsel or compliance vendors to manage verification records. The combination of steep fines and the threat of debarment is expected to push many companies to adopt centralized HR tracking systems well before the March 2026 deadline.

Originally reported by JD Supra.