Legal - Illegal Immigration & Public Contracts
 BACKGROUND
(Updated: 11/7/11)     

On June 4th, 2008, Governor Mark Sanford signed into law the South Carolina Illegal Immigration Reform Act, 2008 Act No. 280. Section 3 of this Act added Chapter 14 to Title 8 of the South Carolina Code of Laws. Titled "Unauthorized Aliens and Public Employment," this new Chapter contains the Act's primary restrictions regarding contracts between private businesses and governmental entities. According to the Act's title, Chapter 14 was added in order "to require contractors or subcontractors who contract with public employers for the physical performance of services to register and participate in the federal work authorization program or otherwise verify employees, to define terms, to establish deadlines for compliance by public employers, contractors, and subcontractors, to require that the provisions of the chapter are enforceable without regard to race, religion, gender, ethnicity, or national origin, and to authorize the director of the State Budget and Control Board to prescribe forms and promulgate rules necessary to administer the act and publish the rules and regulations on the Board's website."

The shortcut to this page is: www.procurementlaw.sc.gov/immigration

For more information, use this shortcut: www.bcb.sc.gov/BCB/immigration/


 APPLICATION TO PUBLIC CONTRACTS
(Updated: 11/7/11)     

The following summary is provided solely as an introduction to the concepts found in Section 3 of The South Carolina Illegal Immigration Reform Act. After familiarizing yourself with these concepts, you should read the Act itself. Only the Act is binding. This summary is not an official agency interpretation of the Act and should not be relied on in any setting.

Restrictions / Basic Rule

□ Section 3 of the Act prohibits covered persons from entering into covered contracts unless the contractor agrees either (a) to verify all new employees through the federal work authorization program [and requires the same from subcontractors and sub-subcontractors] or (b) to employ only qualifying workers. Effectively, the Act also requires contractors to agree to provide any documentation required to establish either (a) that the Act does or does not apply to the contractor, subcontractor, or sub-subcontractor; or (b) that the contractor, and any subcontractor or sub-subcontractor, are in compliance with Section 3 of the Act.

Covered Persons

□ Public Employers: every department, agency, instrumentality, and political subdivision of the State of South Carolina.
□ Contractors: any person having a covered contract with a public employer.
□ Subcontractors: any person having a covered contract with a contractor.
□ Sub-subcontractor: any person having a covered contract with a subcontractor.

Covered Contracts

□ Any public contract that involves the physical performance of manual labor within South Carolina, if the total cost of the manual labor exceeds (i) thirty percent of the total cost of all labor, or (ii) five percent of the total contract price, unless the contract falls within an exclusion.

Comments / Suggestions:

- For each contract, the contractor will need to calculate the total cost of manual labor both as a percentage of the total cost of all labor and as a percentage of the total contract price. In doing so, the contractor should base its calculations on its obligations as they exist at the time the contract is executed, without regard to possible future changes. A contract that, as originally executed, is not a covered contract may become a covered contract either when the labor costs involved in a change order are added or when the total cost of the contract is reduced (e.g., a deductive change order).


Exclusions

The following types of contracts are not covered even if they involve the required dollar value of manual labor.

□ Small State Contracts < $25,000: Contracts with a total annual value of less than $25,000 with a public employer other than a political subdivision.

□ Small Local Contracts < $15,000: Contracts with a total annual value of less than $15,000 with a public employer that is a political subdivision.

□ Commodities & Equipment: Contracts primarily for the acquisition of movable personal property described in the government's solicitation and in final form and ready for the use intended including, without limitation, commodities or equipment.

□ Professional & Consultant Services: Contracts predominantly for the performance of professional or consultant services.

Federal Work Authorization Program

□ The Act allows contractors to comply with the Act by agreeing (a) to register and participate in the federal work authorization program to verify the employment authorization of all new employees, and (b) to require agreement from its subcontractors, and through the subcontractors, the sub-subcontractors, to register and participate in the federal verification of the employment authorization of all new employees. Federal work authorization program means the E-Verify Program maintained and operated by the United States Department of Homeland Security and the Social Security Administration, or any successor program.

Comments / Suggestions:
- Information about the program is available on the internet from the Department of Homeland Security's U.S. Citizenship and Immigration Services.


Qualifying Workers

□ The Act allows contractors to comply with the Act by agreeing to employ only workers who either:
(a) possess a valid South Carolina driver's license or identification card issued by the South Carolina Department of Motor Vehicles;
(b) are eligible to obtain a South Carolina driver's license or identification card in that they meet the requirements set forth in Sections 56-1-40 through 56-1-90; or
(c) possess a valid driver's license or identification card from another state where the license requirements are at least as strict as those in South Carolina, as determined by the Executive Director of the South Carolina Department of Motor Vehicles, or his designee. The Executive Director of the South Carolina Department of Motor Vehicles, or his designee, shall publish on its website a list of states where the license requirements are at least as strict as those in South Carolina.

Comments / Suggestions:
- DMV's listing of qualifying states is available on the internet at www.scdmvonline.com, under the heading "SC Illegal Immigration Reform Act"


Subdividing Work

□ The Act expressly prohibits either a public employer or a contractor from dividing work or duties that would otherwise constitute a single service contract into separate contracts for the purpose of avoiding the requirements of the Act.

Enforcement / Violations

□ Protests: In general, if a law (e.g., statute, regulation, ordinance) allows for a protest of the award of a government contract, that protest process is the exclusive remedy for civil violations of the Act's public contracting requirements.

□ Contract Terminations / Breach: As a term of a covered contract, a covered business agrees to comply with the applicable requirements of the Act. As with any contractual obligation, violation of that obligation would constitute a breach of that contract.

□ Suspension / Debarment: Section 11-35-4220 provides as follows: "[T]he appropriate chief procurement officer has the authority to debar a person for cause from consideration for award of contracts or subcontracts if doing so is in the best interest of the State and there is probable cause for debarment. The appropriate chief procurement officer also may suspend a person or firm from consideration for award of contracts or subcontracts during an investigation where there is probable cause for debarment."

□ Criminal Prosecution: The Act provides that "a person who knowingly makes or files any false, fictitious, or fraudulent document, statement, or report pursuant to this chapter is guilty of a felony, and, upon conviction, must be fined within the discretion of the court or imprisoned for not more than five years, or both."

Starting Dates

The General Assembly elected to implement this new law in phases. The start date depends on the size of the business involved.

□ For businesses with 500 or more employees, begin applying the Act on January 1, 2009.

□ For businesses with 100 or more employees but less than 500 employees, begin applying the Act on July 1, 2009.

□ For businesses of any other size, begin applying the Act on January 1, 2010.


 FORMS
(Updated: 11/26/08)     

According to Section 8-14-40, a public employer complies with Title 8, Chapter 14 of the South Carolina Code of Laws (originally enacted as Section 3 of The South Carolina Illegal Immigration Reform Act, 2008 S.C. Act No. 280) if it obtains a written statement from the contractor certifying that the contractor will comply with the requirements of Title 8, Chapter 14 and agrees to provide to the public employer any documentation required to establish either: (a) the applicability of Title 8, Chapter 14 to the contractor, subcontractor, and sub-subcontractor; or (b) the compliance with Title 8, Chapter 14 by the contractor and any subcontractor or sub-subcontractor.

The State Budget and Control Board's three central purchasing offices -- the State Engineer's Office, the State Procurement Office, and the Information Technology Management Office -- intend to obtain such a written statement by requiring that responses to public contract notices include standard language that parallels the statute. In other words, bids and proposals submitted in response to government issued solicitation, e.g., Invitations for Bids and Requests for Proposals, will have to include a standard solicitation clause.

For any solicitation issued before January 1, 2009 that may result in a contract being executed on or after January 1, 2009, the responsible procurement official should, as appropriate, either amend the solicitation to include the relevant clause or seek the prospective contractor's agreement to the clause prior to issuing the award.

In general, written statements will not be sought for contracts awarded before January 1, 2009.

Procurement Code Transactions: Non-Construction

In all contracts covered by the Act, the State Procurement Office and the Information Technology Management Office intend to use the clause labeled below as Procurement Code Transactions: Non-Construction. State level public entities conducting acquisitions subject to the Consolidated Procurement Code and using the Materials Management Office's Uniform State Provisions & Clauses may wish to use this clause to comply with Section 3 of The South Carolina Illegal Immigration Reform Act.

Procurement Code Transactions: Construction

For all construction-related contracts covered by the Act, the State Engineer's Office will be recommending the use of the clause labeled below as Procurement Code Transactions: Construction.

Other Transactions

For any transactions that do not fit one of the above two situations, the South Carolina public entity (state or local) conducting the transaction may wish to consider using the clause labeled below as Other Transactions.


 LINKS & REFERENCES
(Updated: 12/4/08)     

The State Budget & Control Board's Office of Human Resources has prepared numerous resources to help governmental entities understand and comply with other aspects of the Act. Those resources have been posted to the internet at OHR's site.

The South Carolina Department of Labor, Licensing and Regulation has also posted information on its website regarding implementation of the South Carolina Illegal Immigration Reform Act. In addition, a news release has been posted on LLR's Media Center web site. Additional information on this topic may be available from LLR's Office of Immigrant Worker Compliance.

Information about the E-Verify Program is available on the internet from the Department of Homeland Security's U.S. Citizenship and Immigration Services.

DMV's listing of qualifying states is available on the internet at www.scdmvonline.com, under the heading "SC Illegal Immigration Reform Act"

The following resources may be of use. No representation is made regarding their content.


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