House committee substitute to the 1st edition makes the following changes.

Amends the act’s long title.

Amends the definition of employer in GS 64-25, as it applies to Article 2, Verification of Work Authorization, of GS Chapter 64, to revert back to the original definition as any person, business entity or organization that transacts business in this state and that employs 25 (was, five in the previous edition) or more employees in the state.

Amends GS 64-29 as follows. Removes the requirement that when the Commissioner of Labor (Commissioner), after an investigation, determines that the complaint is not false or frivolous, the Commissioner proceed in accordance with GS 64-30A for violations of GS 64-26 or GS 64-33.1 for violations of GS 143-133.3. No longer allows conducting risk-based compliance checks. Adds that random compliance checks must be based on a randomized sample of all employers registered with the Secretary of State, weighted by size and industry. Requires giving written notice to an employer when it is selected for a random compliance check that includes any requested employment records, which are limited to those listed in the statute in new (e). Requires employers to provide the requested employment records within 30 calendar days of receiving the notice. Prohibits conducting a random compliance check of the same employer more than once per calendar year. Adds new (e) limiting a compliance check to the review of records, documents, reports, certifications, or other paperwork required by law to be maintained or submitted by the regulated person or entity. Specifies that a request for documents or records under this section does not, by itself, create or imply a right of physical entry onto private property.

Removes proposed new GS 64-30A, concerning the procedure and consequences for violations of GS 64-26.

No longer repeals GS 64-30, actions to be taken; hearing, and instead amends that statute as follows. Make the listed actions applicable when, after an investigation or compliance check (was, investigation), the Commissioner determines that the complaint about an alleged violation is not false or frivolous. Amends those actions for violations of GS 64-26 (Verification of employee work authorization) as follows. Removes the requirement that the Commissioner hold a hearing to determine if a violation has occurred and, if appropriate, impose civil penalties in accordance with the provisions of the Article and replaces it with the following requirements. Provides that if the employer is entitled to the cure period in the statute, then prior to imposing civil penalties, the Commissioner must give written notice of noncompliance to the employer, who then has 30 calendar days to cure the alleged violation by enrolling in E-Verify, completing required verifications, and otherwise complying with GS 64-26. If the employer cures the alleged violation within that timeframe and submits proof, then the Commissioner cannot order the employer to pay a civil penalty. If the employer does not cure the violation in that timeframe, or if it is not entitled to the cure period, then the Commissioner must hold a hearing to determine if a violation has occurred and, if appropriate, impose civil penalties.

No longer repeals GS 64-31 (Consequences of first violation of GS 64-26) and instead amends that statute as follows. Removes the current provisions and instead provides as follows. Makes the statute applicable to violations of GS 64-26 if, at the time of the violation, (1) the Commissioner has not previously issued an order against the employer under this statute and the employer fails to cure the violation within the 30-day cure period provided or (2) the Commissioner has previously issued an order against the employer under this statute, but the previous order was issued more than five years before the current violation. Allows the Commissioner, for violations under either of those conditions, to order the employer to pay a civil penalty of up to $1,000 for each required employee verification the employer failed to make, capped to $3,000.

No longer repeals GS 64-32 (Consequences of second violation of GS 64-26) and instead amends that statute as follows. Requires when a violation of GS 64-26 occurs within five years after an order has been issued pursuant to GS 64-31, the Commissioner must order the employer to pay a penalty of $2,000 for each required employee verification the employer failed to make, capped at $10,000.

No longer repeals GS 64-33 (Consequences of third or subsequent violation of GS 64-26) and instead amends that statute as follows. Requires for violations of GS 64-26 that occur after an order has been issued under GS 64-32, the Commissioner must order the employer to pay a penalty of $5,000 for each required employee verification the employer failed to make, capped at $25,000. Also allows the Commissioner to refer the matter to the Attorney General for enforcement.

Removes proposed changes to GS 64-33.1.

Amends GS 64-34 by reinstating the statute’s original language that the Commissioner must maintain copies of orders issued under GS 64-31, GS 64-32, and GS 64-33.

Removes the requirement that the Commissioner amend its rules to make changes that are consistent with Section 1.

Changes the effective date of Section 1 of the act from October 1, 2026, to July 1, 2027.