OHIO LEGISLATIVE SERVICE COMMISSION
Office of Research Legislative Budget
www.lsc.ohio.gov and Drafting Office
H.B. 327 Bill Analysis
135th General Assembly
Click here for H.B. 327’s Fiscal Note
Version: As Passed by the House
Primary Sponsors: Reps. Wiggam and Swearingen
Effective date:
Kelly Bomba, Attorney
SUMMARY
E-verify requirements for certain employers and contractors
 Requires a public employer, a private employer employing 75 individuals within Ohio,
and a nonresidential construction contractor to verify each new employee’s work
eligibility through the federal E-verify program and keep a record of the verification for
the duration of the employee’s employment or three years, whichever is longer.
 Requires contracts for nonresidential construction projects to include a provision
requiring the contractor responsible for the project and any subcontractor, regardless of
tier, to use E-verify to confirm the identity and work eligibility of any tradesperson
assigned to perform work on the project.
E-verify in public construction and maintenance contracts
 Requires a contract for the construction or maintenance of a public improvement
entered into by a state agency or political subdivision to contain a provision requiring
the contractor and any subcontractor to use E-verify to confirm the identity and legal
work status of specified individuals hired by the contractor or subcontractor.
 Voids any contract for the construction or maintenance of a public improvement that
fails to include the provision.
 Requires the Attorney General to conduct periodic reviews to ensure compliance by
state agencies and political subdivisions.
 Requires a state agency or political subdivision be fined $5,000 for each instance of
noncompliance.
Investigations and enforcement
 Requires the Attorney General to investigate alleged violations of the bill’s requirements
and of required contract provisions.
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 Requires, if reasonable evidence of a violation exists, the Attorney General to order the
violator to pay a fine and submit satisfactory proof of compliance.
 Requires, if an individual or entity does not comply with an order within 30 days of
issuance, the Attorney General to sue the individual or entity in a court of common
pleas.
 Requires the court to determine whether a violation occurred and whether the violator
acted “recklessly” as defined in the bill.
 Requires the court to fine a violator, disqualify the violator from participation in state
contracts, or both, depending on whether the violator acted recklessly.
 Creates the E-Verify Enforcement Fund to be used by the Attorney General for the bill’s
enforcement.
DETAILED ANALYSIS
E-verify requirements for certain employers and contractors
The bill requires the state, any political subdivision, any employer employing
75 individuals within Ohio, and any nonresidential construction contractor employing one or
more individuals within Ohio (an “employer”) to do both of the following:
 Except as described below, after hiring an employee, verify the employee’s employment
eligibility through the E-verify program (see “Background – employee work
eligibility and E-verify,” below);
 Keep a record of the verification for the duration of the employee’s employment or
three years, whichever is longer.1
For purposes of the bill, a “nonresidential construction contractor” is any individual or
company that satisfies both of the following:
 Is responsible for the means, method, and manner of construction, improvement,
renovation, repair, or maintenance on a nonresidential construction project with
respect to one or more trades and represents that the individual or company is
permitted or qualified to perform or have responsibility for one or more trades on the
project;
 Performs construction, improvement, or renovation on a nonresidential construction
project with respect to the individual’s or company’s trade or employs or assigns
tradespersons who perform the construction, improvement, or renovation.
1 R.C. 4151.01 and 4151.04(A)(1).
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A “nonresidential construction project” is any construction project involving a building
or structure subject to the Ohio Building Code (commercial buildings), except that it does not
include an industrialized unit.2
In addition, all contracts for a nonresidential construction project entered into on or
after the bill’s effective date must require the contractor responsible for the project and any
subcontractor, regardless of tier, to use E-verify to confirm the identity and work eligibility of
any tradesperson assigned to work on the project.3
Exemption and waiver for certain workers
The bill exempts an employer from the E-verify requirements when both of the
following apply:
 The employer previously used E-verify to verify the employee’s or tradesperson’s work
eligibility;
 The employer is not required to verify or reverify the employee’s or tradesperson’s
eligibility to work under the federal Immigration Reform and Control Act of 1986 (IRCA)
(see “Background – employee work eligibility and E-verify,” below).
A contract for a nonresidential construction project also may contain a provision waiving
the E-verify requirements under the circumstances described above.4
E-verify in public construction and maintenance contracts
The bill requires a state agency or political subdivision desiring to enter into or renew a
contract for the construction or maintenance of a public improvement on or after the bill’s
effective date to include in the contract a provision that the contractor and any subcontractor
will use E-verify to confirm the identity and legal working status of each of the following types
of employees:
 An individual hired during the term of the contract to perform duties in Ohio;
 An individual assigned by the contractor or subcontractor to perform work on the
contract in Ohio.
The public contractor must use E-verify to confirm the identity and legal working status
of each employee hired by the public contractor. A subcontractor must use E-verify to confirm
the identity and legal working status of each employee hired by the subcontractor. (See
“COMMENT,” below).
Under the bill, any contract for the construction or maintenance of a public
improvement entered into in violation of the requirement is void.
2 R.C. 4151.01(J) and (K).
3 R.C. 4151.04(B)(1).
4 R.C. 4151.04(A)(2) and (B)(2).
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A contract for the construction or maintenance of a public improvement may contain a
provision waiving the E-verify requirements under the circumstances described under
“Exemption and waiver for certain workers,” above.5
For purposes of the bill, a “public improvement” means any of the following:
 A road, bridge, highway, street, or tunnel;
 A waste water treatment system or water supply system;
 A solid waste disposal facility or a storm water and sanitary collection, storage, and
treatment facility;
 Any structure or work constructed by or on behalf of a state agency or political
subdivision pursuant to a contract.
“Maintenance” means any activity necessary to keep a public improvement, its fixtures,
and its components in proper working condition. Maintenance includes janitorial services,
disinfection, snow removal, landscaping, repairs, equipment testing, and scheduled
replacement of parts, components, or materials. Maintenance does not include utilities, waste
management, software systems, or information technology services.6
The Attorney General must conduct periodic reviews to ensure state agency and
political subdivision contracts include the E-verify provisions described above. Any state agency
or political subdivision found to be in violation of the requirements is subject to a $5,000 fine
per violation.7
Investigation and enforcement
The Attorney General must prescribe a form an individual may use to allege a violation
of the bill’s employer E-verify requirements or a required contract provision. The Attorney
General cannot require an individual filing a complaint to list the individual’s Social Security
number or have the form notarized.
The bill requires the Attorney General to investigate any violation alleged in a prescribed
form filed with the Attorney General. An individual may file a complaint using a different form,
but the Attorney General is not obligated to investigate a complaint filed using a nonprescribed
form. The Attorney General cannot investigate a complaint based solely on race, color, or
national origin. A local law enforcement officer may assist the Attorney General’s investigation.
5 R.C. 4151.02.
6 R.C. 4151.01, by reference to R.C. 9.75, not in the bill.
7 R.C. 4151.03.
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If the Attorney General investigates a complaint and finds reasonable evidence exists of
a violation, the Attorney General must, after providing notice and an opportunity for a hearing
in accordance with the Administrative Procedure Act,8 do both of the following:
 Order the violator to pay a fine;
 Order the violator to provide the Attorney General with satisfactory proof that any
violation has been corrected.
The amount of the fine the Attorney General must order varies depending on the
number of violations revealed by the investigation. For a single violation, the fine is $1,000. In
the case of two violations, the fine is $1,000 for the first violation and $2,500 for the second. If
the Attorney General’s investigation reveals three or more violations, the Attorney General
must order a fine of $5,000 for each violation beyond the second.9
If an individual or entity fails to comply with the Attorney General’s order within 30 days
after issuance, the Attorney General must sue the person in the court of common pleas of the
county where the individual or entity is located or does business.10
If the court determines an individual or entity has violated the bill’s requirements or a
required contract provision, the court must do both of the following:
 Order the violator to pay $5,000 for each violation;
 Order the violator to otherwise comply with the Attorney General’s order.11
The court also must determine whether the individual or entity acted “recklessly” when
violating a requirement or a contract provision. In the event of a reckless violation, the court
must order a $10,000 fine per violation and order the violator to be disqualified from bidding
on or participating in any contract for goods, services, or construction paid for in whole or in
part with state funds (a “state contract”) for a period of one year. Under the bill, an individual
or entity acts “recklessly” when the individual or entity conducted business in bad faith and has
acted with conscious disregard or indifference to the E-verify program.12
Where a violation of a required contract provision and a violation of the bill’s E-Verify
requirements arise from the same facts and circumstances, a court may fine an individual or
entity for only one of the violations.13
8 R.C. Chapter 119.
9 R.C. 4151.05(D).
10 R.C. 4151.05(E) and 4151.06(A).
11 R.C. 4151.06(B)(1).
12 R.C. 4151.06(B)(2) and (E) and 4151.01(H) by reference to R.C. 9.242, not in the bill.
13 R.C. 4151.06(D).
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After the one-year period described above elapses, a disqualified individual or entity
may be eligible to bid for and participate in state contracts if the individual or entity files a
sworn affidavit with the Director of Administrative Services that one year or more has elapsed
since the disqualification and the individual or entity has not violated the E-verify requirements
during the period. The Director must maintain a list of all individuals and entities ineligible to
bid for or participate in state contracts due to a violation. The Director must remove an
individual or entity from the list when the one-year period ends, unless the individual or entity
has an unpaid fine levied under the bill. A court must provide the Director with a copy of any
disqualification order, and the Department must maintain a record of all orders and affidavits
filed with the Director.14
E-verify Enforcement Fund
The bill creates the E-Verify Enforcement Fund in the state treasury. Fines collected
under the bill must be deposited to the credit of the fund. The Attorney General must use the
fund to administer and enforce the bill.15
Background – employee work eligibility and E-verify
The IRCA prohibits hiring or employing an alien who is not authorized to perform the
type of job for which the alien is hired or employed. The IRCA establishes penalties for
employers found hiring unauthorized workers.16 To comply with the IRCA requirements, an
employer and a new employee must complete the “I-9 Employment Eligibility Verification
Form,” the “I-9 form.”17 An employer and all new employees must complete this form during
the first three days of employment. The form must be completed for all new employees,
citizens and noncitizens alike. In addition, as part of the required verification of employment
eligibility, the employer must examine specified documents the employee provides.18
As an option in the verification process, the employer may register in the “E-Verify
program” and use the E-Verify verification system.19 The E-Verify program is an Internet-based
program that uses information from the I-9 form to help employers verify the eligibility for
14 R.C. 4151.06(B)(3) and (4) and (C).
15 R.C. 4151.06(F).
16 8 United States Code (U.S.C.) 1324a.
17See OMB No. 1615-0047 (PDF), which may be accessed by conducting a keyword “I-9 form” search on
the U.S. Citizenship and Immigration Services (USCIS) website: www.uscis.gov.
18 8 Code of Federal Regulations (C.F.R.) 274a.2. See also Handbook for Employers M-274, sections 2.0,
3.0, and 4.0, which may be accessed by conducting a keyword “employer handbook” search on the
USCIS website and clicking on the link for the desired section.
19
Originally known as the Basic Pilot/Employment Eligibility Verification Program, the program was
renamed E-Verify in 2007.
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employment of newly hired employees. Participation in E-Verify is voluntary, unless
participation is required by state or federal laws or regulations.20
The E-Verify program was established pursuant to the Illegal Immigration Reform and
Immigrant Responsibility Act of 199621 and is administered by the U.S. Department of
Homeland Security (DHS) in partnership with the Social Security Administration (SSA).22
COMMENT
If the bill were challenged with respect to the Ohio Constitution’s Home Rule
Amendment, a reviewing court might consider whether a municipal or charter county
ordinance or resolution requiring a local agency or contractor to use a method other than
E-verify to confirm an employee’s eligibility to work is an exercise of local self-government. If
that is the case, the ordinance or resolution prevails over the bill even if it conflicts with the
bill’s requirement. The Ohio Supreme Court has generally held that establishing the terms of
public employment and contracting for goods, services, and construction are matters of local
self-government under the Home Rule Amendment to the Ohio Constitution. With respect to a
matter of local self-government, a municipality or charter county may adopt an ordinance or
resolution that conflicts with state law.23