Published: 10.07.2007

Employer sanctions law: Navigating the maze
New rules crack down on hiring of illegal workers
By Shelley Shelton
ARIZONA DAILY STAR

A new law promising to punish businesses that hire illegal workers has enough contradictions and complications that many business owners are conflicted about what they need to do before Jan. 1, when the law is scheduled to go into effect.

The Legal Arizona Workers Act carries severe penalties for employers who knowingly or intentionally employ illegal workers, and it requires all employers to use the federal government's E-Verify online system to help determine a new hire's legal status. It also has several ambiguities that leave employers crossing their fingers and hoping that nothing goes wrong.
"Our advice to employers has been, don't enroll in the E-Verify program until December," said David Selden, one of the plaintiffs' attorneys handling a court challenge to the law.
There were two court cases challenging the law, Selden said, but they have been consolidated. A final brief is set to be filed Oct. 19, and after that the court
will hear oral arguments and render a decision.
"The court indicated in the scheduling order that the court will rule before Jan. 1," Selden said.
For that reason, business owners might wish to hold off on registering for E-Verify because in so doing, they are entering into an agreement with the government that could cause problems later if they don't follow through with using the program, he said.
Some local business owners are taking a wait-and-see approach by getting educated but holding off on taking any action.
"In my estimation, it was a poorly written law," said Jim Faustlin, who with his wife, Suzanne, bought a local franchise of The Maids nine years ago.
He noted the law's lack of exceptions based on type of business enterprise, meaning theoretically a hospital or an entire county could be shut down under the new law.
Because of the sensitive personal nature of its business, The Maids has been using an investigator to conduct extensive background checks for years, Faustlin said.
He counts himself lucky that he and his wife own a business that has only one location, he said.
"It's kind of strange to make the owner of a business responsible for a slight mistake that a manager of a business makes when they hire someone," he said.
Richard Underwood, owner of AAA Landscape — a Star 200 employer with 600 employees and four full-time human-resources people — said it's frustrating that federal law conflicts with state law in some places.
For instance, federal law says that if he gets a "no-match" letter from the Social Security Administration indicating he has an employee whose name doesn't match the Social Security number provided, that person has 60 days to provide a good identification. The new state law would give Underwood three days to terminate that employee.
The legal challenges to the new law cite constitutional violations, said Ann Seiden, spokeswoman for the Arizona Chamber of Commerce and Industry.
"The law violates the Constitution in three ways. First, it takes action which is reserved for the federal government. It interferes with interstate commerce. And third, it deprives employers and their employees of their due-process rights," she said.
The Arizona Chamber is hosting a breakfast Wednesday in Phoenix with Tom Donohue, president and CEO of the U.S. Chamber of Commerce, to discuss the immigration issue and its national implications.
"We do support penalties for employers who knowingly hire illegal workers. We do feel that bad actors should be punished," Seiden said. "But this law has the potential to hurt legitimate businesses that want to hire legal workers."
E-Verify doesn't detect identity theft, Seiden said, and it's also written so that every complaint must be investigated, leaving a lot of room for anonymous tipsters to make unfounded complaints based on someone's skin color or the fact a person speaks Spanish.
However, in Pima County — which has set an example for all other Arizona counties except Maricopa — the County Attorney's Office will require complainants to meet with a detective and fill out a form that includes their contact information, said Amelia Craig Cramer, chief deputy county attorney.
In anticipation of the law's Jan. 1 effective date, the Pima County Attorney's Office has been designing procedures and forms and looking for new staffers to handle the tips that come in. Most other counties are adopting the same procedures and forms, Cramer said.
"One of the biggest issues that has come up is, our office wants to make sure there is no racial profiling here," she said. Tipsters must know something more than a particular employee has brown skin and speaks Spanish.
"There has to be some evidence that these employees are not authorized to work in the United States, and that the employer knew."
Despite whatever inconsistencies exist, Faustlin of The Maids said, he plans to attend a seminar to learn about nuances of the law so his business will be sure to follow it if it comes to fruition.
"Until it gets through the courts, we just go along with it and assume it's a good law," he said.
WHAT THE LAW REQUIRES
Main provisions
• Employers can't "knowingly" or "intentionally" employ unauthorized workers.
• Every Arizona employer must verify new-hire eligibility through the federal government's online Employment Eligibility Verification/E-Verify system.
• If found guilty of a violation, an employer must file an affidavit within three days attesting that it has terminated all unauthorized workers and that it will not intentionally or knowingly hire any. If the affidavit is not filed in time, the court must order the appropriate agencies to suspend all licenses subject to the law (See related box, "definitions," page D6.)
• If an employer is found to have violated the law, the employer is put on "probation" (see box on penalties below). During the probation period, the employer must file quarterly reports with the county attorney listing each new employee who is hired by the employer at the specific locations where the undocumented worker performed work.
Penalties
• First violation: mandatory probation (3 years for knowingly hiring an unauthorized worker, 5 years for intentionally hiring) and possible temporary suspension of all business licenses issued by the state of Arizona (up to 10 days for knowingly hiring, and at least 10 days for intentionally hiring).
Pertinent licenses are those that are held by the employer and necessary to operate the employer's business location where the undocumented worker performed work. If there is no license necessary to operate that specific location, then the licenses subject to suspension or revocation are ALL the licenses held by the employer at the employer's primary place of business.
• Second violation during probation period, whether knowingly or intentional: permanent revocation of state-issued licenses, effectively preventing employer from doing business in Arizona.
Definitions
Knowingly: The employer has some reason — other than appearance or accent — to believe an employee does not have legal status to work in the United States. For example, the employer receives a "no-match" letter from the Social Security Administration indicating an employee's name does not match the Social Security number that person gave when hired.
Intentionally: The employer specifically meant to hire an unauthorized worker and knew the individual was not authorized to work in the United States but chose to hire that worker anyway.
License: A license is any agency permit, certificate, approval, registration, charter or similar form of authorization that is required by law and is issued by any agency for the purpose of operating a business in the state of Arizona. Includes articles of incorporation, certificates of partnership, transaction-privilege tax licenses and authorities for foreign corporations to transact business in Arizona pursuant to Title 10, Chapter 15. Doesn't include professional licenses, such as those for attorneys, doctors and real estate professionals.
ADVICE FOR EMPLOYERS
• Incorporate a policy into your employee handbook that states what the law requires you to do and that you follow the law. Make sure any policy you have in place applies to everybody so there is no discrimination.
• Keep I-9 forms on file for one year after an employee no longer works for you or three years after date of hire, whichever is longer.
• Wait to enroll in the E-Verify system until legal challenges to the law have played out in the courts.
• Perform E-Verify searches even if you have locations in different states, just to keep your company covered.
• If you're rehiring someone, you need to go through the process again.
• In advance of the law's taking effect Jan. 1, conduct an audit of your I-9 records. The I-9 form is the one you complete indicating a new hire has shown you certain forms of identification to indicate legal work status. By conducting an audit, you are making sure all forms are complete and consistent. A missing signature on a form can create big problems later. If you find a problem with a form, have the employee complete a new one, put the current date on it and attach it to the old one.
Source: Staff research
Some troubles critics foresee
• There are no exceptions to the penalties based on the kind of business. This means government entities such as Pima County and essential organizations like hospitals are subject to the same rules as private businesses, but it may be impossible to shut them down as required by law.
• E-Verify currently has about 16,000 voluntary users nationwide. About 150,000 Arizona businesses will begin using it on Jan. 1. That's about a tenfold increase in use, and there have been questions about whether the system will be able to handle such a load.
• The act doesn't define "primary place of business," so it's hard to determine which site's licenses will be affected when no operating licenses are required at the location where the subject employee performed work.
• There's no exclusion for volunteers or for temporary employees. Employers share responsibility with temp agencies for making sure workers are authorized.
• The E-Verify system is promoted as giving business owners a "rebuttable presumption" should they be challenged in court, but that basically says an employer who uses E-Verify is presumed innocent unless the state can prove guilt — a right we already have in this country.
To get more information
Upcoming seminars
• Presenters: Employment law attorneys from Snell & Wilmer LLP. Pima County Attorney Barbara LaWall also will discuss the county's role in enforcing the new law.
• When: 8 to 9 a.m. Wednesday, Oct. 17. Breakfast and registration is 7:30 to 8 a.m.
• Where: Marriott University Park, Pima Madera Room, 880 E. Second St.
• Cost: Free; R.S.V.P.: 882-1355.
Presenters: Attorneys from labor and employment-law firm Ogletree Deakins and Pima County Attorney Barbara LaWall.
• When: 2 to 5 p.m., Thursday, Oct. 18.
• Where: The Diamond Center at Desert Diamond Casino, Interstate 19 and Pima Mine Road.
• Cost: $75; R.S.V.P.: 792-2250, Ext. 132.
Web resources
• Can't make it to a seminar? Visit www.azimmigrationcompliance. com to find similar information.
• The Arizona Chamber of Commerce and Industry also holds free, live "webinars" every Thursday to let people know how to use the E-Verify program. Each session is limited to 125 participants who can access the webinar from their own computers and phones. To register and receive log-in instructions, email info@azchamber.com.
http://www.azstarnet.com/sn/border/204856.php