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Legal Arizona Workers Act 101, or ...Everything you need to know about the new employer-sanctions law.
Nov. 28, 2007 01:34 PM

Reporter Ronald J. Hansen has compiled the basics on Arizona's new employer-sanctions law, which is scheduled to take effect Jan. 1. U.S. District Judge Neil Wake heard arguments for and against the law Nov. 14 and is expected to rule in the case before the end of the year.

If you have additional questions about the law or want to offer comments appropriate for publication, e-mail Hansen at ronald.hansen@arizonarepublic.com.

What is the law?
The sanctions law, known as the Legal Arizona Workers Act, is intended to ensure that no businesses in Arizona knowingly or intentionally hire or employ illegal immigrants.

Beginning Jan. 1, all business owners in Arizona risk losing their state and local licenses if they knowingly or intentionally - the law makes a distinction between "knowingly" and "intentionally" - hire undocumented workers after that date. Licenses can be suspended for 10 days or longer for a first offense and revoked altogether for a second offense.

Employers are required to check the legal status of their new hires using E-Verify, a free online federal program that checks names and identification documents to ensure that new employees are eligible to work.

The law also sharpens the punishment for identity theft, a crime frequently associated with illegal workers.

It is now aggravated identity theft, a felony, to possess the identity information of someone else to seek work or to have such information for three or more people without their consent.

Under the law, it doesn't matter whether the information is for an actual person or a bogus identity.

Who is affected?
The sanctions law applies to every employer in Arizona regardless of the size of the business.

Employers face mandatory suspension of their state- and local-issued business licenses for a first offense and permanent license revocation for a second one.

Under the law, each business location seems to be treated separately from its corporate cousins. This means that if a franchise with a violation at one location faces a shutdown, others with separate licenses are not affected unless they also are found to have knowingly hired illegal workers.

However, many business owners with multiple locations share business licenses for tax and legal reasons. This means that those businesses that operate under a single license as one corporate entity face a shutdown at all their sites.

The law doesn't punish undocumented workers but does require state authorities to contact federal immigration officials. Typically, this could lead to prosecution or deportation.

Who enforces it?
The state's 15 county attorneys are primarily responsible for enforcing the sanctions law.

The state attorney general can investigate cases but must refer them to the local county attorney for legal action.

County attorneys must investigate any alleged violation unless it is determined to be frivolous. After receiving a complaint, the county attorney must check on the legal status of the workers by inquiring with federal authorities. The county attorneys cannot try to independently determine a worker's legal status.

If the complaint appears to have merit, the county attorney must contact local police and U.S. Immigration and Customs Enforcement about the suspected violators.

Although federal authorities may pursue their own immigration-related actions against the worker or the employer, the county attorney must go to Superior Court to formally resolve the licensing matter for the business.

In all cases, an employee's actual legal working status is based on a determination by the federal government for that person.

This means Arizona's judges need only consider whether an employer knowingly intended to hire an employee the federal government already has determined is illegal.

The sanctions law is intended to be treated as a law-enforcement priority.

Prosecutors, for example, are ordered to review every complaint. The superior courts are ordered to put the sanction cases on a fast-track. And the attorney general must compile a public database of employers who violate the sanctions law.

However, law-enforcement officials have said that the law includes little budget support for these new obligations.


What about frivolous complaints?
Anyone can make a complaint about suspected violations, but authorities have stressed that it should have a reasonable basis. They want to avoid discriminatory complaints that are based on a general suspicion because, for example, workers don't speak English or aren't White.

Making a frivolous complaint to authorities is a misdemeanor crime. A conviction could carry up to 30 days in jail and a $500 fine.


What are the penalties?
The sanctions law effectively gives the licensing "death penalty" to businesses that are caught twice knowingly putting illegal immigrants on the payroll.

First offenses are more complicated.

Business licenses are suspended for up to 10 days or at least 10 days for a first offense, depending on the circumstances.

The difference between "knowingly" and "intentionally" hiring an illegal worker is a legal determination that an employer not only knew an employee wasn't permitted to work in this country but intended to have an illegal worker on the payroll.

Violators who "knowingly" hire can have their business licenses suspended up to 10 days for a first offense. Violators who "intentionally" hire must have their licenses suspended for at least 10 days. The law does not specify the maximum suspension for a first offense for intentional violations.

In both types of cases, Superior Court judges will determine the length of the suspension and base it on a variety of factors, including: how long the business had employed someone illegally; whether the business had any prior misconduct; and the degree of harm caused by the violation.

For both types of violations, employers must terminate all their illegal employees and file an affidavit within three business days swearing not to hire illegal workers again.

First-time offenders are placed on probation and must file quarterly reports to the county attorney on each new employee they hire at that location during their supervision.

For those with knowing violations, probation lasts three years. Intentional violators face five years of probation.


What does it cost?
It is unclear what the sanctions law actually will cost the state's 150,000 businesses or its government agencies.

The cost to business owners will largely depend on how sizable their operations are.

E-Verify, the federal online program that checks an employee's legal work status, is a free program available to employers and is required under the sanctions law.

Federal authorities say checking names on E-Verify is a process that usually takes no longer than a few minutes per name.

Some large-scale business owners have said that the process has forced them to create positions just to ensure compliance with the state law. Some small-business groups have said the law will force the smallest employers to get computers and go online, an expense that cuts into their already-thin margins.

There are also third-party businesses that can handle employment-verification services for employers, including E-Verify checks and processing I-9 forms.

Legislators budgeted $2.6 million this fiscal year to prosecutors for enforcement and to notify business owners of the law change.

The money breaks down this way:

In October, the state's Department of Revenue had $70,000 to mail notices of the new law to businesses.

The state's attorney general receives $100,000 to help enforce the law and maintain a database of violations throughout the year.

The Maricopa County attorney receives $1.43 million and Pima County's gets $500,000 for enforcement needs.

The other 13 county attorneys divide $500,000, or $38,462 each.

The law requires prosecutors to contact local police authorities and federal immigration officials about suspected illegal workers, which could strain their budgets if it leads to widespread arrests.

It is hoped that the law will lead illegal workers to leave before enforcement is necessary, keeping costs relatively low.

Even so, the state law figures to keep federal authorities busy. Demand for the E-Verify system is growing rapidly because all Arizona businesses will register for it if the law is upheld. Meanwhile, other states have passed laws that encourage using E-Verify. (OK & TN)


How do I register for E-Verify?
Registering for E-Verify, the federal online database that checks employment eligibility, can be done through the Web site for the U.S. Citizenship and Immigration Services, at www.uscis.gov.

Click on the E-Verify logo and follow the links to E-Verify registration.

The program is free, but companies may need to develop software that works with the database.

The government offers toll-free assistance in completing the registration process for E-Verify. Call 888-464-4218.

Before using the program, an employer, or someone authorized by the employer, must sign a memorandum of understanding that outlines the terms of service.

A key requirement is that E-Verify can be used only for new hires within three business days of their start date. It cannot be legally used to consider whether to hire someone or to screen existing employees.

(IMO, this needs to be improved or hire everyone as a temporary employee. After 30 - 90 days hire permanently.)

Also, the program checks only employment eligibility. It does not reflect a worker's immigration status.

What do I need to check a new hire on E-Verify?
Using E-Verify largely requires the same documents that businesses have relied on for checking employment eligibility in the past. The system does require posting formal notice to employees and providing certain documents for those whose eligibility is not immediately confirmed.

According to the U.S. Citizenship and Immigration Services Web site, employers need from their new worker:

• Their full name
• Date of birth
• Social Security number
• Citizenship status
• Type of documentation provided for I-9 form
• Proof of identity with expiration date

In addition, employers must post a notice that they use the E-Verify system.

Immigration Services officials say about 93 percent of names are immediately verified as eligible to work in the U.S. Most of those who are not verified are because data was entered incorrectly or differs from information on file with the Social Security Administration.
(such as a madien name being on file, after a woman is married)

Frequently, the differences involve legal name changes that were not recorded, or immigration or citizenship status changes that were not shared with the Social Security Administration.

If a worker's information is considered a mismatch by E-Verify, employers must notify the employee and provide a document that outlines their options for appeal and contact information for doing so. They cannot immediately fire the employee.
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Workers who are not verified have eight federal business days to formally challenge the mismatch. Federal officials say most challenges are resolved within a day.


What is the legal challenge?
An alliance of business owners, civil-rights lawyers and immigrant-rights groups has filed a federal lawsuit challenging the constitutionality of the state's sanctions law.

Those challenging the law argue that it requires businesses to participate in E-Verify, an online federal program that checks names and identification documents in an effort to ensure new employees are eligible to work in the United States. Since 1986, the federal government has required only that private employers maintain paper identification records, known as I-9 forms, for new hires.

Opponents of the state's new law say it improperly overrides federal immigration and employment rules and can lead to workplace discrimination by those trying to follow it. The state maintains the law affects only business licensing, an area it is entitled to regulate.

U.S. District Judge Neil Wake questioned lawyers on both sides during a hearing Nov. 14 in Phoenix, and he is expected to issue his ruling before the law is scheduled to take effect Jan. 1.

Among the legal questions hanging over the case is whether the lawsuit is premature. Wake could rule that he can't decide the constitutionality of a law that hasn't gone into effect.

Regardless of Wake's eventual decision, the losing side is expected to appeal. That would send the case to the 9th U.S. Circuit Court of Appeals in San Francisco.

Given the flood of immigration-related laws sweeping the country and the constitutional questions they raise, it is also possible the U.S. Supreme Court could choose to hear the Arizona case or a similar one elsewhere that could settle the matter.

In all, the legal process could take months to resolve. Although such moves are rare, it is possible that during that time a judge could temporarily block Arizona's law from going into effect.


What is unclear about the law?
Plenty.

For starters, the E-Verify system at the heart of the law is scheduled to end in November 2008. Congress needs to extend E-Verify to make Arizona's law even possible.

And lawyers have raised several issues that would seem to cloud even the simplest assumptions about the law.

For example, the law makes it a crime to file frivolous complaints about businesses, but lawyers say there is no standard to determine what "frivolous" means.

Also, the standard for opening an investigation could be different across the state.

The Maricopa County attorney has said his office will accept anonymous complaints. The other 14 county attorneys in the state have said they will require names with complaints.

The state requires Superior Court judges to rely on the federal government to determine whether an employee is actually illegal. But it is unclear whether that determination is based on a formal hearing with legal due process for the worker or simply relies on other sources, such as E-Verify, an electronic system known to occasionally make mistakes.

Even the punishment phase of the law raises procedural questions.

For example, employers with a violation are required to dismiss all of their illegal workers. But the law doesn't spell out how they should know who those workers are.

The E-Verify system can't be used for existing employees; only new hires. This presumably leaves businesses relying on their I-9 paperwork system, which the federal government stopped regularly auditing in 2000.


Where can I get more information?
• The Arizona Legislature's Web site provides information about the law's history as a bill.

• Here you can read the text of the law.

• The U.S. Citizenship and Immigration Services provides information about E-Verify. You can learn more about the program or sign up for it by going to USCIS

• Creative Business Resources, a human resources outsourcing company, operates a Web site intended to provide information about the law and how businesses must comply.

• The group Arizona Employers for Immigration Reform operates a site with information about the legal challenge to the law provided by those who are suing to overturn it.

• The American Civil Liberties Union is also among the groups suing to overturn the Arizona law and other illegal immigrant-related laws and ordinances nationwide.


Reach the reporter at e-mail: ronald.hansen@arizonarepublic.com or 602-444-4493.