Proposed Changes to Arizona Employer Sanctions Laws (03-05-2008)

Proposed Changes to Arizona Employer Sanctions Law

By Michael C. Saqui and Anthony P. Raimondo

On Tuesday, March 4, 2008, Arizona House Bill 2745, which clarifies a number of ambiguities in the Arizona Employer Sanctions Law, was approved by an Arizona legislative committee. Revisions which HB 2745 would make to the Employer Sanctions Law include:

• The Employer Sanctions Law would have no retroactive effect. It would only apply to workers hired on or after January 1, 2008 – not to workers who were already on the payroll at that time.
• The definition of “employee” would exclude independent contractors.
• The Arizona Attorney General must create a form for taking complaints. However, the form is not necessary for filing complaints, and anonymous complaints may also be investigated.
• Employers who pay employees "under the table" would be subject to penalties.
• Penalties would apply only to the business site where an undocumented worker was hired. This will affect businesses with more than one location: license suspensions and revocations would affect only the offending hiring site.
• Employers may obtain a degree of security by participating in a voluntary compliance program, which includes, among other steps, registering for the federal E-Verify program.

These changes will not take effect unless and until the Arizona legislature passes HB 2745, and Arizona Governor Janet Napolitano signs it into law.

Meanwhile, the state of the Employer Sanctions Law is somewhat up in the air: although it is in effect, it is currently being challenged in a suit before the 9th Circuit Court of Appeals. On February 28, 2008, the 9th Circuit refused to grant a temporary restraining order against enforcement of the Employer Sanctions Law. In an unsigned order, the court said that it had not found that enforcement of the law, during the pendency of legal challenges, would result in irreparable harm, or that it was likely that the law's challengers would ultimately find the law unconstitutional.

COUNSEL TO MANAGEMENT:

Despite the uncertain future of the law, and although HB 2745 may (if signed into law) help to ease some of the burdens imposed by the Employer Sanctions Law, employers should take the most cautious approach and implement strict policies and procedures to comply with the laws pertaining to employing undocumented workers, such as by signing up for E-Verify, auditing their I-9 forms, and implementing protocols to deal with raids and audits.

Saqui & Raimondo will continue to monitor this developing area of law and provide updates as appropriate. For additional information and background on the Employer Sanctions Law, visit http://www.srlaborlaw.com .

The goal of this article is to provide employers with current labor and employment law information. The contents should not be interpreted or construed as legal advice or opinion. For individual responses to questions or concerns regarding any given situation, the reader should consult with Saqui & Raimondo at (831) 443-7100 in Salinas, or (916) 782-8555 in Sacramento.