Builders in Ohio will soon face expanded hiring compliance requirements as the state broadens its use of the federal E-Verify system.
Beginning March 19, all contractors working on public works projects for state agencies and political subdivisions — along with nonresidential contractors — must register for and use E-Verify, the federal system that confirms a new hire’s work authorization against records from the Department of Homeland Security and the Social Security Administration.
Attorneys say the system can help reduce guesswork in employment verification, but it also raises legal and operational risks if used incorrectly.
“There’s no doubt that E-Verify is a better tool than just using your eyes to say, ‘Yeah, I think this is a good document versus a bad document,’” said Bruce Buchanan, Nashville-based senior counsel for law firm Littler Mendelson.
The consequences for mistakes can be steep. In Ohio, penalties can reach up to $25,000 for failing to act on a final nonconfirmation. Contractors may also be barred from bidding on state contracts for up to two years for multiple willful violations. In more severe cases, knowingly hiring an unauthorized worker could lead to permanent revocation of a business license.
As more states adopt E-Verify mandates, attorneys stress that documentation, internal controls and consistent processes are critical.
When Ohio’s law takes effect, 25 states will have enacted some form of E-Verify requirement, according to Yane Park McKenzie, an associate at Troutman Pepper Locke. However, requirements vary widely.
For example, Florida requires private employers with 25 or more employees to enroll in E-Verify, while Alabama mandates the program for all private employers, regardless of size. Municipalities may also enact their own rules, further complicating compliance for multistate contractors.
Alexandra LaCombe, a partner at Fisher Phillips, emphasized that contractors must remember E-Verify does not replace Form I-9 requirements.
“Just because you’re enrolled in E-Verify and run people through E-Verify, doesn’t mean that you have to stop, or can stop, filling out I-9s,” LaCombe said.
Ohio’s move comes amid heightened immigration enforcement under President Donald Trump’s administration. Increased scrutiny from Immigration and Customs Enforcement has placed additional pressure on industries like construction, where immigrant labor represents a significant share of the workforce.
Roughly 34% of construction trades workers are immigrants, and in some specialties that number can reach as high as 61%, according to industry economists. At the same time, the sector faces a labor shortage of approximately 349,000 workers needed to meet demand.
“The reality is that this administration is really coming down hard, and I think that for the remaining three years, they’re really going to go after employers for worksite compliance,” McKenzie said.
Regular internal audits and centralized oversight can mitigate risk, she added. Rather than assigning E-Verify responsibilities project by project, firms should designate a single compliance lead to manage documentation and ensure consistency.
“I think that can lead to lower levels of compliance, or inconsistencies in documentation, things like that,” McKenzie said.
Compliance exposure doesn’t stop at direct hires. Many contractors rely on staffing agencies and subcontractors, but attorneys caution that third-party relationships do not shield companies from liability.
“A lot of construction employers sometimes use staffing agencies, and the staffing agency is also not a shield to protect the employer from total liability,” said Chris Caravello, an associate at Fisher Phillips.
Caravello recommends strong contractual language requiring staffing partners to conduct regular I-9 audits and maintain compliance procedures. If vendors fall short, contractors may need to reconsider those relationships.
Though Ohio’s statute is structured to limit liability for subcontractor violations, McKenzie suggests incorporating flow-down clauses requiring subcontractors to comply with E-Verify mandates. However, she cautions against reviewing a subcontractor’s I-9 forms directly due to privacy concerns.
Littler’s Buchanan echoed that participating in E-Verify can help employers avoid overstepping.
“It literally allows the government to have a sneak peek type of thing into your workforce,” Buchanan said.
Green cards and other work authorization documents change frequently, and employers who independently scrutinize documents beyond required procedures may expose themselves to discrimination claims.
“I am always concerned when [employers] think they have a good knowledge of these documents,” Buchanan said.
While the penalties can appear severe, attorneys note enforcement agencies often focus on intentional violations.
“Good faith compliance does tend to go a long way, especially as the laws are taking off and the state is also kind of learning as they go,” said Asafu Suzuki, a senior attorney at Vorys, Sater, Seymour and Pease.
For contractors operating in multiple jurisdictions, the evolving E-Verify landscape signals the need for proactive compliance planning in 2026 and beyond. With half of U.S. states now requiring some form of E-Verify participation, builders may increasingly choose to standardize verification practices nationwide to reduce administrative complexity and enforcement risk.
As labor shortages persist and enforcement efforts intensify, contractors face the dual challenge of maintaining workforce capacity while navigating a more complex regulatory environment.
Originally reported by Matthew Thibault, Reporter in Construction Dive.
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