North Carolina — Hiring & Onboarding

North Carolina requires private employers with 25 or more employees to verify the work authorization of newly hired employees through the federal E-Verify system. The E-Verify mandate does not apply to all new hires, however—a statutory definition of “employee” sets important limits on coverage and exceptions:

Who is excluded from the E-Verify requirement?

• Under N.C. Gen. Stat. § 64-25(4), an “employee” is “any individual who provides services or labor for an employer in this State for wages or other remuneration,” but this expressly excludes “an individual whose term of employment is less than nine months in a calendar year.” This means employers are not required to run E-Verify on short-term, temporary, or seasonal hires whose expected employment will be under nine months, regardless of industry or job type.

• The statute does not provide further carveouts by industry, occupation, or sector. There are no special exemptions for agricultural, hospitality, construction, or any other category of work—the only explicit exclusions for private employers are (1) having fewer than 25 employees and (2) hiring workers for terms of less than nine months.

• Importantly, government entities (such as state agencies, counties, and municipalities) are not considered "employers" under N.C. Gen. Stat. § 64-25(5) and so fall outside the private employer E-Verify mandate entirely.

Enforcement and effective dates:

• Effective dates for the mandate varied by employer size, beginning in 2012 for the largest employers and extending to 2013 for those with 25 or more employees. Recordkeeping, verification timing, and penalties are addressed in separate sections of this guide.

Source: N.C. Gen. Stat. § 64-25(4)-(5)

Federal law requires every employer in North Carolina—regardless of size—to complete and retain Form I-9, Employment Eligibility Verification, for each individual hired for employment after November 6, 1986. This requirement applies to all employees who perform labor or services in exchange for wages or other remuneration, including U.S. citizens and noncitizens. The mandate is codified at 8 U.S.C. § 1324a and enforced by the Department of Homeland Security through U.S. Citizenship and Immigration Services (USCIS) and Immigration and Customs Enforcement (ICE).

Two-section completion structure

Form I-9 consists of two core sections that divide responsibility between employee and employer. Section 1 (Employee Information and Attestation) must be completed and signed by the employee no later than the first day of employment—defined as the date the employee begins performing labor or services for pay. Employees may complete Section 1 before the first day of employment, but not before accepting a job offer. In Section 1, the employee attests under penalty of perjury to their identity and employment authorization status (U.S. citizen, noncitizen national, lawful permanent resident, or alien authorized to work).

Section 2 (Employer Review and Attestation) must be completed by the employer or an authorized representative within three business days of the employee's hire date. For example, if an employee begins work on Monday, the employer must complete Section 2 by Thursday of that week. If the job lasts fewer than three business days, both Sections 1 and 2 must be completed by the first day of employment.

Document examination and List A / List B + C structure

To complete Section 2, the employer must physically examine original, unexpired documents presented by the employee. Employees choose which documents to present from the Lists of Acceptable Documents published by USCIS. List A documents (such as a U.S. passport or Permanent Resident Card) establish both identity and employment authorization; an employee presenting a List A document should not be asked to present additional documents. Alternatively, employees may present one document from List B (establishing identity only, such as a state driver's license) combined with one document from List C (establishing employment authorization only, such as an unrestricted Social Security card).

Employers cannot require employees to present specific documents, reject documents that reasonably appear to be genuine and relate to the employee, or treat employees differently based on citizenship status or national origin. Such conduct may violate the anti-discrimination provisions at 8 U.S.C. § 1324b(a)(6). The employer must examine each document to determine whether it reasonably appears to be genuine and relates to the employee presenting it, then record the document information in Section 2.

Authorized representatives

Employers may designate any person to complete Section 2 on their behalf, including personnel officers, foremen, agents, or others acting in the employer's interest. This person is an "authorized representative" and must perform all employer duties, including examining the employee's documents and completing Section 2. Employers remain liable for any violations committed by an authorized representative. Employees cannot act as authorized representatives for their own Form I-9.

Retention and storage

Employers must retain each completed Form I-9 for as long as the individual remains employed. After employment ends, the employer must retain the Form I-9 for whichever is later: three years after the date of hire, or one year after the date employment ends. Forms I-9 must not be filed with USCIS or ICE; employers retain them and make them available for inspection upon request by authorized government officers. Failure to properly complete, retain, or make Forms I-9 available for inspection can result in civil money penalties for each violation.

Reverification and rehire

If an employee's employment authorization expires, the employer must reverify the employee's continued work authorization by completing Supplement B, Reverification and Rehire (formerly Section 3), on or before the expiration date. The employee may present any acceptable List A or List C document showing continued employment authorization. Employers also use Supplement B when rehiring a former employee within three years of the date the original Form I-9 was completed.

Remote examination alternative

Employers participating in E-Verify may use an alternative procedure authorized by the Secretary of Homeland Security to remotely examine an employee's documents, rather than physically examining them. Employers using remote examination must indicate this on Form I-9. Employers not enrolled in E-Verify must physically examine documents in person.

Recent enforcement change — classification of technical and substantive errors (effective March 2026):

Effective March 2026, ICE updated its enforcement posture regarding Form I-9 errors. Several types of errors previously classified as "technical"—such as missing date of birth, missing employee signature date, and missing USCIS/alien number—are now treated as "substantive" violations. Substantive violations can result in immediate penalties without a correction window, increasing employer liability risk. This change in classification does not alter the form completion or retention requirements, but it materially affects audit risks for employers who do not carefully review I-9s for completeness and accuracy. See the ICE I-9 Inspection Fact Sheet (March 16, 2026) and the most recent Federal Register notices for up-to-date details on violation classifications and penalty implications.

Source: 8 U.S.C. § 1324a Source: USCIS Form I-9 page Source: USCIS Handbook for Employers M-274, Section 2.0 Source: USCIS Form I-9 Instructions Source: USCIS Completing Section 2 Source: ICE I-9 Inspection Fact Sheet (March 16, 2026)

North Carolina law requires every employer to report each newly hired or rehired employee to the State Directory of New Hires. The report must be submitted no later than 20 days from the employee's "date of hire," which is defined as the first day work is performed for pay. Employers who submit reports electronically or magnetically must do so in two monthly transmissions, no more than 16 and no less than 12 days apart each month (commonly referred to as the "batch" method).

A "newly hired employee" includes anyone not previously employed by the employer or anyone rehired or recalled to work after being separated for at least 60 consecutive days. Employers must report the following information for each new hire:

• Employee’s name, address, Social Security number, and date services for pay began (hire date)
• Employer’s name, address, and Federal Employer Identification Number (FEIN)
• State employer identification number (if applicable)

Employers can use the federal W-4 form, an equivalent form with all required fields, or a designated state form. Reports may be submitted by:

• Online portal operated by the North Carolina Department of Health and Human Services
• Electronic or magnetic file upload
• Fax
• First-class mail to the North Carolina New Hire Directory

Failure to report timely or accurately may result in a civil penalty of up to $25 per report. Where there is a conspiracy between employer and employee not to file or to file a false report, the penalty increases up to $500 per occurrence, and may be imposed by the district court.

After receiving the employer data, the Department must enter it into the State Directory within 5 business days and has 2 additional business days to notify the employer about any required child support withholding for the worker.

Source: N.C. Gen. Stat. § 110-129.2 Source: NC New Hire Directory Guidance

North Carolina imposes civil penalties on employers who fail to comply with the state’s E-Verify requirement under N.C. Gen. Stat. § 64-26. The North Carolina Department of Labor (NCDOL) is responsible for investigating complaints and enforcing these penalties against private employers with 25 or more employees who violate E-Verify obligations.

Penalty structure:

• First violation: For a first violation, the NCDOL issues a written warning and orders the employer to comply. No monetary penalty is imposed if the employer provides satisfactory proof of compliance within the time prescribed by the NCDOL (the timeline is set by the agency under the statute).

• Second violation: For a second violation, the NCDOL assesses a civil penalty of $1,000 for each required employee verification that the employer failed to perform.

• Third and subsequent violations: For a third or subsequent violation, the civil penalty increases to $2,000 per required employee verification not performed.

• Remediation and record retention: For any violation, the NCDOL may require the employer to submit a sworn affidavit within a specified period, attesting that all required verifications have now been completed. Employers must retain the relevant records.

Each day that an employer fails to comply with the NCDOL’s corrective order constitutes a separate violation subject to an additional penalty. Employers may appeal penalty assessments under the North Carolina Administrative Procedure Act.

Source: N.C. Gen. Stat. § 64-26

North Carolina law requires private employers with 25 or more employees to use the federal E-Verify system to check the work authorization status of each newly hired employee. But to be presumed in compliance with the E-Verify law, the timing is key: a North Carolina employer must verify each new hire through E-Verify within three business days of the hire date (that is, the employee’s first day performing work or services for pay, as defined under federal I-9 rules).

This three-business-day deadline is not unique to North Carolina—rather, it aligns the state’s compliance standard with the federal E-Verify rule and I-9 deadlines under 8 C.F.R. § 274a.2(b)(1)(ii)(A). North Carolina law explicitly adopts this deadline in N.C. Gen. Stat. § 64-26(c), which provides that “[a]n employer who verifies the work authorization of an employee through E-Verify within three business days of the employee’s hire date shall be presumed to be in compliance.”

Failing to verify a new hire within this period leaves the employer open to investigation by the North Carolina Department of Labor and possible penalties per § 64-26. Employers should maintain records showing E-Verify completion dates in case of audit. Different rules or exceptions may apply to state agencies, local governments, or very short-term (< nine months) hires, but for private employers covered by the law, the three-day rule governs day-to-day onboarding.

Source: N.C. Gen. Stat. § 64-26(c) Source: NC Dept. of Labor—E-Verify FAQ

North Carolina employers must provide new hires with a written notice at the time of hiring that specifies two required items:

• The promised wage rate (such as hourly, salary, or other payment method).
• The day and place for payment (when and where the employee will be paid).

This requirement is imposed by North Carolina’s Wage and Hour Act, specifically N.C. Gen. Stat. § 95-25.13(1). The written wage notice must clearly state the agreed wage and payment logistics so employees understand their compensation at the outset. If the employer later changes the promised wage, they must notify the employee in writing at least one pay period before the change takes effect.

Employers are not required by § 95-25.13 to provide detailed written disclosure about all wage supplements (such as vacation, sick pay, bonuses, or commissions) or general pay policy documents at the time of hire, unless those supplements affect the promised wage rate. The definition of “wages” under North Carolina law is broad (covering amounts promised as part of an agreement, policy, or practice—see § 95-25.2(16)), but the statute’s required written notice is limited to the wage rate and the day/place of payment, not all policy details.

Violations of wage notice requirements can expose an employer to civil liability and penalties, but these are generally tied to actual unpaid wages or the employer’s failure to comply with the Wage and Hour Act as a whole.

Source: N.C. Gen. Stat. § 95-25.13

Federal law sets civil money penalties for Form I-9 violations, including failing to properly complete, retain, or present I-9s, as well as knowingly hiring or continuing to employ unauthorized workers. The Department of Homeland Security (Immigration and Customs Enforcement, or ICE) adjusts these penalties annually under the Federal Civil Penalties Inflation Adjustment Act, and the current rates are codified by regulation and described in periodic Federal Register notices (see 8 C.F.R. § 274a.10(b)).

Types of violations:

• Substantive violations: These include failure to prepare or retain I-9s, or failure to present them during inspection. For 2026, the penalty amounts per violation are:
• First offense: $272–$2,701
• Second offense: $2,701–$6,787
• Third or subsequent offense: $4,057–$8,124

These ranges are set by the most recent ICE penalty adjustment notice.

• Knowingly hiring or continuing to employ unauthorized workers:
• First offense: $676–$5,404 per unauthorized worker
• Second offense: $5,404–$13,508
• Third or subsequent offense: $8,106–$27,018

• Technical or procedural violations: These are minor errors in Form I-9 completion or retention, such as incomplete data fields. ICE will provide a 10-business-day period to correct these. If not corrected within that period, the technical error becomes a substantive violation subject to the penalty structure above (see 8 C.F.R. § 274a.10(b)(2)).

Factors affecting penalty setting: ICE is required to consider five regulatory factors when determining the exact penalty amount within the range: (1) size of the business, (2) good faith effort to comply, (3) seriousness of the violation, (4) history of previous violations, and (5) whether unauthorized workers were employed (see 8 C.F.R. § 274a.10(b)(2)).

The numbers above are current as of the 2026 annual adjustment announced by ICE. Practitioners should verify against the most recent Federal Register notice or the ICE website for annual updates.

Source: 8 C.F.R. § 274a.10(b) Source: ICE I-9 Civil Penalty Update (2026)

North Carolina does not use a universal ABC test to distinguish employees from independent contractors. Instead, the standard applied depends on the area of law at issue—unemployment insurance, workers’ compensation, or wage and hour.

Unemployment Insurance (UI): North Carolina’s Employment Security Law defines an “independent contractor” as someone who contracts to do work and is not subject to the employing unit’s control or direction regarding how work is performed (N.C. Gen. Stat. § 96-1(b)(19)). The statute centers the right-to-control, but does not spell out a multi-factor test. As of June 2026, agency guidance and case law have not fleshed out a more detailed list of factors. The practical upshot: control over the manner and method of work is the governing criterion for UI purposes. Source: N.C. Gen. Stat. § 96-1(b)(19)

Workers’ Compensation: For workers’ comp, North Carolina relies on the common law “right to control” test. This inquiry considers several specific factors, including:

• Who directs the actual details of how work is performed
• Whether the worker furnishes their own tools and equipment
• Who determines the hours and place of work
• The right to hire and fire assistants

A special statute for trucking owner-operators (N.C. Gen. Stat. § 97-19.1) confirms that the common-law test determines their status—restating that it depends not just on formal contract terms, but practical day-to-day control and supervision. No statutory ABC‑style rule is used. Source: N.C. Gen. Stat. § 97-19.1

Wage and Hour Law: The North Carolina Department of Labor applies the federal Fair Labor Standards Act’s “economic reality” test under wage and hour law. This multi-factor approach is outlined on the DOL’s official fact sheet. Factors include:

• The permanency of the relationship
• The worker’s investment in equipment or materials
• The degree of control by the employer
• The worker’s opportunity for profit or loss
• How integral the work is to the employer’s business

No single factor is determinative; the DOL emphasizes that the "total activity or situation controls" and all circumstances of the relationship must be considered. This mirrors the U.S. Supreme Court’s approach under the FLSA and is the operative test in North Carolina wage/hour enforcement. Source: NC DOL Independent Contractor vs. Employee Fact Sheet

Summary Table: | Compliance Area | Test Used | |-------------------------|---------------------------------------------------------| | Unemployment insurance | Statutory right-of-control test (§ 96-1(b)(19)) | | Workers’ compensation | Common-law right-to-control test (§ 97-19.1 for trucking)| | Wage and hour law | Economic reality test (multi-factor, DOL/FLSA standard) |

Classification outcomes can differ between statutes because each test is fact-specific and independently applied. North Carolina does not use the ABC test for UI, workers' compensation, or wage and hour purposes.

Source: N.C. Gen. Stat. § 96-1(b)(19) Source: N.C. Gen. Stat. § 97-19.1 Source: NC DOL Independent Contractor vs. Employee Fact Sheet