Arizona Amends the “Legal Arizona Workers Act”

by Bill Wright 

The Legal Arizona Workers Act, sometimes called the Arizona "Employer Sanctions" Law, was amended this month to impose new duties on employers, expand criminal liability for employers who accept false identifications and clarify the sanctions applied to employers who hire unauthorized workers.  The result is a revised set of obligations and sanctions of which every employer with operations in Arizona should be aware.

The Act was originally enacted last July.  At the time, the Governor of Arizona identified several flaws.  For example, the Act was not clear whether certain sanctions applied to a single worksite of a noncompliant employer or to all of the employer's operations in Arizona.  Also, for instance, the Act did not protect legal residents from discrimination.  The Arizona Legislature took up the subject this year to attempt to resolve such issues.  

The amended Act provides for criminal liability for identity theft for any one who accepts identification documents from a person and uses those documents to determine the person's legal authorization to work in the United States, knowing that the identification belongs to someone else.  Allowing a person to continue to work using someone else's identification is punishable as identity trafficking.

The revisions distinguish between knowingly employing an unauthorized alien and intentionally employing an unauthorized alien.  Upon a finding that an employer has violated the Act, the employer must discharge all unauthorized aliens from any of the employer's business locations.  The employer also is given a three year probationary period for knowing violations and a five year probationary period for intentional violations.  The probationary period applies to the specific business location where the unauthorized alien worked.  During the probationary period, the employer must report new hires, on a quarterly basis, to the county attorney.  For a first knowing violation, the court may suspend the employer's relevant business license for up to 10 business days.  For a first intentional violation, the court must order a suspension of the employer's relevant business license for at least 10 days.  If the employer has a license for the business location where the unauthorized alien performed work, the relevant license is the license for that location.  If the employer does not have a business license for the specific location, the relevant licenses are all licenses for the employer's principal place of business.  Also on a first violation, the employer must file an affidavit declaring that the employer has terminated the employment of all unauthorized aliens in Arizona.  Failure to file the affidavit within 3 days will result in suspension of the employer's business license.   

For a second violation, the relevant business license is revoked permanently.  A second violation is one that occurs during any probationary period for the specific place of business where the unauthorized alien is working.

An employer has an affirmative defense to a charge of employing an unauthorized alien if the employer can show it made a good faith attempt to comply with the federal requirements, "notwithstanding an isolated, sporadic or accidental technical or procedural failure to meet those requirements."  Use of the federal E-Verify program creates a rebuttable presumption that the employer has not knowingly or intentionally employed an unauthorized alien.  However, the Act also specifically requires employers to use the E-Verify program.

Entities that contract with a government entity or that receive a grant, loan or performance-based incentive from a government entity, are specifically required to use the E-Verify program.  Government contractors will be required to warrant their compliance in their government contracts. 

The amended Act creates an additional voluntary Employer Enhanced Compliance Program.  To participate in the program, employers must agree to use the E-Verify program.  In addition, for any employee whose documents were not submitted to the E-Verify program, the employer must agree to verify the employee's social security number using the Social Security Number Verification Service.  Where the Service identifies a problem with an employee's Social Security Number, the employer must notify the employee and direct the employee to resolve the discrepancy with the Social Security Administration.  The employer and employee have 90 days to resolve the discrepancy or to file documented proof of ongoing efforts to resolve the discrepancy. To participate in the program, employers also must agree to provide E-Verify or Social Security Number verification documentation on any employee on request from the Attorney General or county attorney.  Employers who participate in the program are not in violation of the Act if they in fact perform the agreed verification and they provide the documents as requested.

In response to the Governor's concern about discrimination, the amended Act prohibits the Attorney General or county attorney from investigating a complaint that an employer is employing unauthorized aliens if the complaint is based solely on race, color or national origin. 

The amended Act distinguishes between employees and independent contractors.  However any employer who knowingly contracts with an unauthorized alien, or with a person who employs or contracts with an unauthorized alien, is guilty of knowingly employing unauthorized aliens.

Sherman & Howard has prepared this advisory to provide general information on recent legal development that may be of interest. This advisory does not provide legal advice for any specific situation. This does not create an attorney-client relationship between any reader and the Firm. If you want legal advice on a specific situation, you must speak with one of our lawyers and reach an express agreement for legal representation.

© 2008 Sherman & Howard L.L.C.                                                            May 6, 2008