E-Verify is not mandatory in Texas for most private employers. State law requires it only for state agencies, public colleges and universities, and businesses that hold certain state or federal contracts. Every other employer in Texas can enroll voluntarily, but nothing in state or federal law forces them to.
Texas Employers Who Must Use E-Verify
Texas Government Code Section 673.002 requires every state agency to register for and participate in E-Verify for all new employees.1State of Texas. Texas Government Code Section 673-002 – Verification The Texas Workforce Commission’s implementing rule extends the same obligation to institutions of higher education, so public colleges and universities must also run every new hire through the system.2Legal Information Institute. 40 Texas Admin Code 843-3 – Public Employer Requirements Regarding E-Verify
Executive Order RP-80 pushes the requirement into the private sector through contracting. The order directs executive agencies under the governor’s authority to make E-Verify participation a condition of state service contracts.3Office of the Attorney General of Texas. Texas Executive Order RP-80 – Relating to State Agencies Using the US Department of Homeland Security E-Verify System If your company wins a covered state service contract, you and your subcontractors have to use E-Verify for anyone doing work under it. The Texas Department of Transportation is one of the more visible agencies enforcing the requirement, but it reaches broadly across executive agencies.
Federal Contractors
A separate track applies to Texas employers with federal contracts. The Federal Acquisition Regulation includes a clause requiring E-Verify participation for covered federal service and construction contracts. Prime contractors have to flow the requirement down to subcontractors when the subcontract exceeds $3,500 and involves services or construction performed in the United States.4Acquisition.gov. 52.222-54 Employment Eligibility Verification
The federal scope is wider than the state one. Federal contractors generally must verify all new hires company-wide, not just employees assigned to the government project, and must also verify existing employees assigned to the covered contract.5E-Verify. Supplemental Guide for Federal Contractors A Texas business that holds both a state contract and a federal contract can end up covered by both mandates at once, with overlapping but not identical obligations.
Private Employers Without Government Contracts
If your Texas business does not contract with a state agency or the federal government, no state or federal law requires you to use E-Verify. Texas lawmakers have introduced dozens of bills since 2013 attempting to extend the mandate to private employers, and none have passed. The most recent effort in the 2025 legislative session cleared one chamber before dying without a final vote. Unless the legislature changes course, voluntary enrollment is the only route for private employers outside the contractor rules.
Voluntary enrollment can still be useful. It adds a layer of verification beyond Form I-9, and some employers rely on it to show good-faith compliance during audits. Once you enroll, though, the program’s rules apply to you the same way they apply to a mandatory user, including consistent case creation for every new hire, anti-discrimination requirements, and the obligation to display the E-Verify Participation and Right to Work posters.
Form I-9 Is Still Required for Everyone
Employers sometimes hear that E-Verify is optional in Texas and conclude that employment verification generally is optional. It is not. Every employer in the United States must complete Form I-9 for every person they hire.6U.S. Citizenship and Immigration Services. I-9, Employment Eligibility Verification Form I-9 has been a federal requirement for all employers since 1986. E-Verify is an electronic check layered on top of the I-9 process, not a substitute for it, and the federal penalties for I-9 paperwork violations apply whether or not you are enrolled in E-Verify.
What Happens If a Covered Employer Doesn’t Comply
Losing a State Contract
Executive Order RP-80 makes E-Verify participation a condition of the state contract itself, so failing to comply can be treated as a breach. The practical consequences typically involve termination of the existing contract and potential exclusion from future state contracting opportunities. The Texas Workforce Commission oversees implementation of the state E-Verify rules through its administrative code.
Federal Penalties for I-9 and E-Verify Violations
Federal penalties apply independently to any employer that violates Form I-9 or E-Verify requirements, and they scale with the seriousness and frequency of the violation:
- Paperwork violations: $288 to $2,861 per form for substantive errors or uncorrected technical mistakes on Form I-9.
- Knowingly hiring unauthorized workers, first offense: $716 to $5,724 per worker.
- Second offense: $5,724 to $14,308 per worker.
- Third or subsequent offense: $8,586 to $28,619 per worker.
ICE sets the exact amount within each range by weighing five factors: the size of the business, the employer’s good faith, the seriousness of the violation, whether unauthorized workers were involved, and the employer’s history of prior violations. For minor technical errors, such as a missing middle initial, employers get a 10-business-day correction window before any fine attaches. Criminal penalties, including fines up to $3,000 per unauthorized worker and up to six months in prison, can apply when ICE identifies a pattern of violations.
Selective use of E-Verify carries its own risk. If you enroll, you have to create a case for every new hire at the enrolled site, not just employees you suspect might lack authorization. Running cases based on an employee’s appearance, accent, or national origin violates federal anti-discrimination law, and the Immigrant and Employee Rights Section of the Department of Justice can impose penalties for discriminatory use.7U.S. Department of Justice. How Employers Can Avoid Discrimination in the Form I-9 and E-Verify Processes